The most effective way to measure customer satisfaction and simultaneously prime a business for growth is to ask clients whether they would positively refer the company: on a scale of 0-10. The percent of scores of 5 and below is subtracted from the percentage of 9s and 10s. This determines the ‘net promoter score’, which indicates the likelihood of well-satisfied customers recruiting new customers. Revenues from customers who rate the business poorly are ‘bad profits’ because they come at the expense of the relationship (i.e., future revenues). Discusses ways of accurately measuring NPS (as at Enterprise Car Rental) and why satisfaction surveys are overloaded and opaque. More interesting is a six-sector grid (high-low profits, detractor-neutral-promoter) on p117. The business priorities are: 1) maintain the core (high promoters), 2) redress high detractors, 3) raise profits from low promoters, 4) move neutrals to promoters. The thesis jibes with one of Hagel’s trio of business types (i.e., network, product development, or customer service), but didn’t need to be a book.
Book abstracts
16. Judt, Postwar (25 Nov 2006)
A work of great erudition and bien pensant orthodoxy that treats the sociopolitical history of Europe from 1945 to 2005, from the Cold War to the near-term aftermath. The author’s best work is in describing the damage wrought by World War II, the brutality of the Communist takeover of Eastern Europe, and the cultural consequences of Western Europe’s economic growth. Micro studies of nation states like Spain also are valuable. But Judt does not grasp the central conflict between democracy and totalitarianism and so presents the Soviet collapse as compelled by economics and driven by Gorbachev, rather than fueled by the thirst for liberty. So too is the dynamic of Thatcherism dismissed as ‘little more than state selloffs’. (Still more remarkable is the omission of Reagan’s ‘Tear down this wall’ speech.) Judt concludes not with the European leadership’s failure to prevent Balkan war and genocide but yet another review of Nazism’s Final Solution and its historical uniqueness; the Soviets get a pass. Ultimately an unoriginal book.
17. Buccholz, New Ideas from Dead Economists (23 Dec 2006)
A handy review of modern economic thought from Adam Smith, particularly useful in placing post-Keynesian thought in context. The most interesting chapters regard David Ricardo (comparative advantage and rent), Alfred Marshall (marginalism), and monetarism (including the recently passed Milton Friedman, which asserts that government’s best lever is the supply of capital in circulation). The public choice and rational expectations schools are presented as devoid of greater moral purpose. A bit too droll, but otherwise an excellent primer.
14. Bonald, True and Only Wealth of Nations (12 July 2023)
A collection of speeches and essays by Louis de Bonald, a contemporary opponent of the French Revolution, emphasizing sociopolitical gaps created by jettisoning monarchical order including the Catholic Church. Bonald identified three sea changes in the 18th century: in morals, doctrines, and laws whereby aristocrats sacrificed Christian values for rationalism (e.g., physical sciences replacing religious virtue).
A proto-capitalist society in which all depends on individuated agreement and nothing on established order is inherently unstable, and unstructured. Society depends on dedication to higher elements (beyond self-interest); families perform the alchemy of such realization. Bonald echoes Burke in affirming a statesman is capable of improvement and inclined to preservation.
Economic growth, beyond a certain point, entails diminishing returns to public spirit and resources. The wealth of nations is not measured in taxes, which are needs not a product; excess of needs is a sign of distress. Morals and laws are the true wealth of society, family, and nations.
Urban industry enslaves mankind. Man should find subsistence in the family. Government cannot fill the bap because it operates on appropriation.
Marriage is devalued by severing the religious from the civil. Its goal is children; its responsibility is care of the child’s education. To recover the state, Bonald quotes Montesquieu in observing one must regain the family from women and children. Modernity, seeking to evenly distribute power so as to affirm equality, cannot hide from tyranny of authority, that is the role of private interests in the public sphere. It succumbs to weakening of the natural and thus rise of tyranny.
• Men do not invent truths but derive new consequence from those long known.
• One should never obsess with abuses that a part and parcel of good things, nor the advantages of poor things.
• Abstractions are generalizations applying to nothing; morals are generalities pertaining to everything.
As with many, Bonald’s views will sometimes seem anachronistic, but read carefully, they contain true-to-from (i.e., era) answers to age-old problems.
1. Anderson, Long Tail (15 Jan 2007)
A book-length treatment of the now-famous thesis: digital technology reduces the imperatives of scarcity while introducing the capabilities of search and recommendations (micro tails). Although much thought may gave gone into the popularization of marginal economics, the book does not advance the concept.
2. Drucker, Effective Executive (30 Jan 2007)
Effectiveness cannot be taught but must be learned. It is a self-discipline. It is a modest goal but rare. The keys are 1) time: record where it goes, and consolidate useable blocs, 2) contribution: focus on results meaningful to the organization, not effort, 3) build on strengths: integrate the individual’s purpose and the organization’s required outcome. Do not try to build on weakness, 4) priorities: make the best use of time. Concentrate on results, and on leveraging opportunity (rather than problem solving), 5) decisions: identify the generic context and the most relevant principles. Get opinions first, to understand the relevance of facts. Self-development of executives is the only answer to both objective social needs for organizational performance and the individual’s need for achievement and fulfillment. A second reading.
3. Beevor, Stanlingrad (25 Feb 2007)
A powerful, synthetic recounting of Germany’s ill-managed siege during World War II, which marked the Eastern campaign’s turning point. The sometimes barbarous spring-summer blitzkrieg had driven deep into the treeless Russian steppe, but the campaign foundered in the street fighting of a Volga-side city, reduced to rubble by German bombing. Nazi advantages were thereby neutralized and the Soviets grimly hung on until winter set in. Ruthless use of humanity characterized the defense, which catalyzed on the belief that it could not retreat into Asia. Encirclement (kessel) preceded the destruction of the 6th Army as well as the start of Germany’s long retreat. The book divides time between geopolitical decision making and the chilling lot of the common soldier, unhealthful and cheap.
18. Geyl, Debates with Historians (9 September 2023)
Essays on the historiographic practices of famous 19th- and early 20th-century historians, particularly Arnold Toynbee, whom Geyl disparages for introducing systems which effaces facts and events.
• Toynbee, asserting ‘civilizations’ not nation-states are the atomic unit of history and that climates produce innovation through challenge of necessity, habitually treats ‘mental convenience as objective fact’. His facts are but interpretations which can be seen in other ways. He is not a historian but a Christian prophet hoping to stem the modern West’s decline. The problem is not only looking for ‘laws’ but also treating eras by standards foreign to them (historicism); whereas the value of history is entering into each period on its own terms, to enlarge one’s own frames of understanding.
• Ranke’s firm insistence on removing the historian’s personal views is itself the imposition of a personal view. In disdaining such retrospective criticism as the left favors, the stance in inherently conservative, yielding each generation’s ‘immediacy to God’. Though not quietist, it presumes the practitioner’s taking events as fixed. Sometimes this is too accepting, too open-minded.
• Macaulay, the Whiggish progressive and critic, demonstrates more personal intellect than the moral imagination necessary to connect with the past.
• In Carlyle, not ideas but people are the indicators of events in trend; the ‘eternal truth’ appears in great personalities. He represents the puzzle of disavowing technocratic expertise without descending into cultural mayhem. Yet however beholden to power, he roused concern for 19th-century industrial blight more than anyone else.
• Michelet overlooked the totality of events in service of the French Revolution’s mythology, most notably Rousseau’s general will in action. Nothing is less historical than associating the struggle between good and evil with the course of events. French historians disavow Talleyrand for distinguishing between statist (i.e., Napoleonic) France and the conscience of a statesman: in fact he represents a flawed but individual pursuit of right and justice. Not only foreigners should be reminded to resist the dictator.
• America proved its claim itself to Western heritage by fighting a civil war to eradicate slavery. There was no majority for war yet it came because the sides would not be reconciled. Lincoln’s holding the abolitionists at arm’s length is comparable to William the Silent’s seeking to establish the Netherlands nation-state not Protestant religion. The essay dwells more on (lack of) inevitability in history (see below).
• Not Dutch religious attitudes but riverine geography held off Habsburg Spain.
• Subordinating facts and one’s imagination to system (ideology) is unforgiveable. Quoth Maitland: national spirit is the historian’s unacceptable deus ex machina.
• The historian’s entire mind, including the present, inevitably surfaces in his work. He does not accept inevitability; often the minority prompts the course of events. Whereas Hegel, the Romantics, and advocates of philosophy of history follow a metaphysical logic. Such determinism, when promoted by the professional historian, stems from the practitioner’s mind, said Berlin.
17. Bernanke, 21st Century Monetary Policy (25 August 2023)
Charts the course of the US Federal Reserve since the 1970s, highlight refinements prompted by the difficulties of operating at the lower bound of interest rates. Bernanke underlines the benefits of signaling and also macroprudential policy to address systemic instability. The celebrated economist seems not to have considered that his own successes may not be repeated by successors. Further, there is no principled assessment of where technocracy stops and democratic accountability takes over.
The Fed exists largely as founded in 1913 and reformed in 1935; it had failed to address the monetary side of financial stability, worsening the Depression. (Bernanke does not address Roosevelt’s fiscal policies). The 1951 Treasury-Fed Accord freed the latter of any financing responsibilities). The heart of the book focuses on inflation as it relates to unemployment (i.e., the Phillips curve), long-term decline in normal rate of interest (there is no natural rate of inflation since it reflects fiscal policy), and increased systemic instability.
In the 1970s, the Phillips curve was refined to segregate supply and demand shocks. Inflations having been tamed in the 1980s, financial disruption has since caused the major downturns, with credit-market failures generally worse than stock-market collapses.
Greenspan succeeded in risk management but was too involved in fiscal policy. The Global Financial Crisis was a classic bubble: a buildup in risky lending; loss of investor confidence in loans; runs on lenders by short-term funders; fire sales of trouble assets; and procyclical insolvencies. The difficulties of working at the lower bound of interest rates – a 1% reduction in the 10-year yield is equivalent to a 3% reduction in the Federal funds rate, thereby magnifying its stimulus – prompted the Fed to become lender of last resort: asset purchasing (quantitative easing) and related maneuvers.
Bernanke adjudges his own term as successful for introducing transparency and steerage (i.e., communications), paying closer attention to systemic stability, and introducing new policy tools (e.g., apart from purchasing assets, the need for ample lending reserves). The US entered the 2020 pandemic better prepared than 2008. Somewhat blithely, he rates Yellen highly.
The final quarter is given to emerging policy tools as well as the threats of populism (i.e., Trump), inequality, and so on. Apropos of the Fed’s cherished independence, Congressional oversight is hazing even though elsewhere the Fed is said to work for Congress and the president –mainly Trump – is the institution’s foe. Modern Monetary Theory is problematic not because ‘deficits aren’t important’ but as government spending crowds out private use of productive resources, productivity being limited: fiscal policy is responsive to politics whereas monetary policy, though blunt, is better insulated. Does risk taking always migrates to the least regulated part of the system?
5. Sarkozy, Testimony (7 Apr 2007)
Outlines the political platform of French president (to be) Nicolas Sarkozy. The author is a retail politician who rose to the finance and interior ministries, unusual for someone who is not an ‘Enarque’. His the more remarkable for being overtly post-Gaullist in a conservative party; Sarkozy writes he is focused not on international grandeur but instead on domestic capabilities and progress, particularly relative to Europe. (He is of course a pan-European, but also an Americanist.) Driven by political examples, such as the pernicious effects of the 35-hour week, and drawing on examples from his time in government, the work does not stamp out a doctrine per se, but constitutes an interesting snapshot.