In France “‘Liberté, Égalité, Fraternité’ Means that What’s Yours Should Be Mine”

SantacruzGuillaumeFrenchEntrepreneurInLondon2014-04-27.jpgGuillaume Santacruz is among many French entrepreneurs now using London as their base. He said of his native France, “The economy is not going well, and if you want to get ahead or run your own business, the environment is not good.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 1) Guillaume Santacruz, an aspiring French entrepreneur, brushed the rain from his black sweater and skinny jeans and headed down to a cavernous basement inside Campus London, a seven-story hive run by Google in the city’s East End.
. . .
A year earlier, Mr. Santacruz, who has two degrees in finance, was living in Paris near the Place de la Madeleine, working in a boutique finance firm. He had taken that job after his attempt to start a business in Marseille foundered under a pile of government regulations and a seemingly endless parade of taxes. The episode left him wary of starting any new projects in France. Yet he still hungered to be his own boss.
He decided that he would try again. Just not in his own country.
“A lot of people are like, ‘Why would you ever leave France?’ ” Mr. Santacruz said. “I’ll tell you. France has a lot of problems. There’s a feeling of gloom that seems to be growing deeper. The economy is not going well, and if you want to get ahead or run your own business, the environment is not good.”
. . .
(p. 5) “Making it” is almost never easy, but Mr. Santacruz found the French bureaucracy to be an unbridgeable moat around his ambitions. Having received his master’s in finance at the University of Nottingham in England, he returned to France to work with a friend’s father to open dental clinics in Marseille. “But the French administration turned it into a herculean effort,” he said.
A one-month wait for a license turned into three months, then six. They tried simplifying the corporate structure but were stymied by regulatory hurdles. Hiring was delayed, partly because of social taxes that companies pay on salaries. In France, the share of nonwage costs for employers to fund unemployment benefits, education, health care and pensions is more than 33 percent. In Britain, it is around 20 percent.
“Every week, more tax letters would come,” Mr. Santacruz recalled.
. . .
Diane Segalen, an executive recruiter for many of France’s biggest companies who recently moved most of her practice, Segalen & Associés, to London from Paris, says the competitiveness gap is easy to see just by reading the newspapers. “In Britain, you read about all the deals going on here,” Ms. Segalen said. “In the French papers, you read about taxes, more taxes, economic problems and the state’s involvement in everything.”
. . .
“It is a French cultural characteristic that goes back to almost the revolution and Robespierre, where there’s a deep-rooted feeling that you don’t show that you make money,” Ms. Segalen, the recruiter, said. “There is this sense that ‘liberté, égalité, fraternité’ means that what’s yours should be mine. It’s more like, if someone has something I can’t have, I’d rather deprive this person from having it than trying to work hard to get it myself. That’s a very French state of mind. But it’s a race to the bottom.”

For the full story, see:
LIZ ALDERMAN. “Au Revoir, Entrepreneurs.” The New York Times, SundayBusiness Section (Sun., MARCH 23, 2014): 1 & 5.
(Note: ellipses added.)
(Note: the online version of the story has the date MARCH 22, 2014.)

SegalenDianeFrenchEntrepreneurInLondon2014-04-27.jpg ‘Diane Segalen moved most of her executive recruiting practice to London from Paris. In France, she says, “there is this sense that ‘liberté, égalité, fraternité’ means that what’s yours should be mine.”” Source of caption and photo: online version of the NYT article quoted and cited above.

G.D.P. Is a Useful, But Biased Downward, Measure of Growth

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Source of book image: online version of the NYT review quoted and cited below.

(p. 6) Dr. Coyle concludes that while imperfect, the G.D.P. is good enough as a measure of how fast the economy is growing and better than any alternative. It is closely correlated with things that do contribute to happiness. (Nobody is happy in a recession.)

“We should not be in a rush to ditch G.D.P.,” Dr. Coyle writes. “Yet it is a measure of the economy best suited to an earlier era.”
For one thing, it fails to count the value of the staggering growth in consumer choice. Where once we had three television networks, we now have 1,000 channels; greater choice equals greater freedom, she declares. It does poorly in measuring the Internet economy, in which so many benefits — like Google searches — are offered free. It badly lags behind the headlong pace of innovation and creativity. It struggles with the true value of a host of products or services that didn’t exist before. To the degree that it misses those new benefits to consumers, it understates the pace of economic growth.

For the full review, see:
FRED ANDREWS. “Off the Shelf; An Economic Gauge, Imperfect but Vital.” The New York Times, SundayBusiness Section (Sun., APRIL 6, 2014): 6.
(Note: ellipsis added.)
(Note: the online version of the review has the date APRIL 5, 2014.)

The book under review is:
Coyle, Diane. GDP: A Brief but Affectionate History. Princeton, New Jersey: Princeton University Press, 2014.

Open Source Heartbleed Bug Sends Internet “into a Panic”

Opponents of patents often point to the open source movement as an alternative. The Heartbleed bug illustrates a big downside to open source:

(p. B1) The encryption flaw that punctured the heart of the Internet this week underscores a weakness in Internet security: A good chunk of it is managed by four European coders and a former military consultant in Maryland.

Most of the 11-member team are volunteers; only one works full time. Their budget is less than $1 million a year. The Heartbleed bug, revealed Monday, was the product of a fluke introduced by a young German researcher.
. . .
The OpenSSL Project was founded in 1998 to create a free set of encryption tools that has since been adopted by two-thirds of Web servers. Websites, network-equipment companies and governments use OpenSSL tools to protect personal and other sensitive information online.
So when researchers at Google Inc. and Codenomicon on Monday stated that Heartbleed could allow hackers to steal such data, the Internet went into a panic.
. . .
(p. B3) Earlier in the day, a German volunteer coder admitted that he had unintentionally introduced the bug on New Year’s Eve 2011 while working on bug fixes for OpenSSL. . . .
Errors in complex code are inevitable–Microsoft Corp., Apple Inc. and Google announce flaws monthly. But people close to OpenSSL, which relies in part on donations, say a lack of funding and manpower exacerbated the problem and allowed it to go unnoticed for two years.
. . .
The OpenSSL Project counts a sole full-time developer: Stephen Henson, a 46-year-old British cryptographer with a Ph.D. in mathematics. Two other U.K. residents and a developer in Germany fill out the project’s management team.
Associates describe Mr. Henson as brilliant but standoffish and overloaded with work.
. . .
Geoffrey Thorpe, an OpenSSL volunteer on the development team, said he has little time to spend on the project because of his day job at a hardware technology company.

For the full story, see:
DANNY YADRON. “Internet Security Relies on Very Few.” The Wall Street Journal (Sat., April 12, 2014): B1 & B3.
(Note: ellipses added.)
(Note: the online version of the story was updated April 11, 2014, and has the title “TECHNOLOGY; Heartbleed Bug’s ‘Voluntary’ Origins; Internet Security Relies on a Small Team of Coders, Most of Them Volunteers; Flaw Was a Fluke.”)

Russia and China Redistributed Wealth “to Disastrous Effect”

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Shane Smith, entrepreneur behind VICE media company. Source of photo: online version of the NYT article quoted and cited below.

(p. 10) You believe that young people worldwide are disenfranchised. Do you think popular uprisings will fix things? No. I’m actually worried, because I believe that it’s going to get worse. Look, economic disparity is bad. But we’ve already tried having governments redistribute wealth. We tried it in Russia and China to disastrous effect.

News Corp. bought a 5 percent stake in Vice, and now James Murdoch is on the board. Why did you sell to them? I’ve said that I want to be the next MTV, the next CNN, the next ESPN. Cue everyone rolling their eyes. MTV went to Viacom, ESPN went to Disney and Hearst, CNN went to Time Warner. Why? Because to build a global media brand, it’s almost impossible to do it alone. James has been involved in one of the largest media companies in the world since he was in short pants.
Do you ever fear that Vice will become legacy media itself? It’s our time now. Then, I don’t know, it’ll be holograms next, and some kid will come up and eat our lunch.

For the full interview, see:
Staley, Willy, interviewer. ” ‘Have We Unleashed a Monster?’: The Vice C.E.O. Shane Smith on His New Kind of News.” The New York Times Magazine (Sun., MARCH 23, 2014): 12.
(Note: ellipsis added; bold in original.)
(Note: the online version of the interview has the date MARCH 21, 2014, and has the title “Vice’s Shane Smith: ‘Have We Unleashed a Monster?’.”)

“The Experts Keep Getting It Wrong and the Oddballs Keep Getting It Right”

HydraulicFracturingOperationInColorado2014-04-25.jpg “A worker at a hydraulic fracturing and extraction operation in western Colorado on March 29[, 2014].” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. C3) The experts keep getting it wrong. And the oddballs keep getting it right.

Over the past five years of business history, two events have shocked and transformed the nation. In 2007 and 2008, the housing market crumbled and the financial system collapsed, causing trillions of dollars of losses. Around the same time, a few little-known wildcatters began pumping meaningful amounts of oil and gas from U.S. shale formations. A country that once was running out of energy now is on track to become the world’s leading producer.
What’s most surprising about both events is how few experts saw them coming–and that a group of unlikely outsiders somehow did.
. . .
Less well known, but no less dramatic, is the story of America’s energy transformation, which took the industry’s giants almost completely by surprise. In the early 1990s, an ambitious Chevron executive named Ray Galvin started a group to drill compressed, challenging formations of shale in the U.S. His team was mocked and undermined by dubious colleagues. Eventually, Chevron pulled the plug on the effort and shifted its resources abroad.
Exxon Mobil also failed to focus on this rock–even though its corporate headquarters in Irving, Texas, were directly above a huge shale formation that eventually would flow with gas. Later, it would pay $31 billion to buy a smaller shale pioneer.
“I would be less than honest if I were to say to you [that] we saw it all coming, because we did not, quite frankly,” Rex Tillerson, Exxon Mobil’s chairman and CEO said last year in an interview at the Council on Foreign Relations.
. . .
The resurgence in U.S. energy came from a group of brash wildcatters who discovered techniques to hydraulically fracture–or frack–and horizontally drill shale and other rock. Many of these men operated on the fringes of the oil industry, some without college degrees or much background in drilling, geology or engineering.

For the full commentary, see:
GREGORY ZUCKERMAN. “ESSAY; The Little Guys Who Saw Our Economic Future; Corporate Caution and Complacency Come at a Cost.” The Wall Street Journal (Sat., Nov. 2, 2013): C3.
(Note: ellipsis, and bracketed year in caption, added.)
(Note: the online version of the commentary was updated Nov. 3, 2013, and has the title “ESSAY; The Outsiders Who Saw Our Economic Future; In both America’s energy transformation and the financial crisis, it took a group of amateurs to see what was coming.” )

Zuckerman’s commentary, quoted above, is partly based on his book:
Zuckerman, Gregory. The Frackers: The Outrageous inside Story of the New Billionaire Wildcatters. New York: Portfolio/Penguin, 2013.

Television Improved Test Scores

GentzkowMatthewChicagoBatesClark2014-04-26.jpg “Economist Matthew Gentzkow found media slant to be a function of audience preference.” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. A2) An economist known for pioneering work on slanted coverage in the news media won the John Bates Clark Medal, one of the profession’s most prestigious honors.

Matthew Gentzkow, a professor at the University of Chicago’s Booth School of Business, on Thursday was awarded the Clark medal by the American Economic Association, which every year honors the nation’s most promising economist under age 40.
. . .
A big theme in Mr. Gentzkow’s work is finding innovative ways to tackle questions that expand economists’ tool kits.
. . . , in 2008, he and Mr. Shapiro examined the fact that different parts of the U.S. got access to television at different times to gauge TV’s effects on high-school students in the 1960s.
The economists found that children who lived in cities that gave them more exposure to TV in early childhood performed better on tests than those with less exposure. The work also suggested TV helped American children in non-English-speaking households do better in school.

For the full story, see:
NEIL SHAH. “Economist Honored for Work on Media Slant.” The Wall Street Journal (Fri., April 18, 2014): 12.
(Note: ellipses added.)
(Note: the online version of the story has the date April 17, 2014.)

The Gentzkow and Shapiro paper on the effects of television, is:
Gentzkow, Matthew, and Jesse M. Shapiro. “Preschool Television Viewing and Adolescent Test Scores: Historical Evidence from the Coleman Study.” Quarterly Journal of Economics 123, no. 1 (Feb. 2008): 279-323.

Government Pushed Kiewit to Ignore Worker Safety

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Source of book image: http://d202m5krfqbpi5.cloudfront.net/books/1369819962l/17934699.jpg

(p. C9) Boston Harbor’s filth is legendary. It was mock-celebrated in the 1966 song “Dirty Water.” The city’s water-treatment plants were hopelessly inadequate, and barely treated sewage had been pouring into the harbor for decades.
. . .
The Deer Island Sewage Treatment Plant was supposed to solve these problems. Begun in 1990, the $3.8 billion facility would process human and industrial waste on a small island in Boston Harbor and then send it through a 9.5-mile tunnel into the deep waters of the Atlantic. Fifty-five vertical pipes called risers spurred off the tunnel’s final section to further diffuse waste before releasing it into the sea. Temporary safety plugs, likened to giant salad bowls, had been placed near the bottom of each riser to keep water from seeping in before construction was complete.
These plugs were a source of conflict between the tunnel’s owner, the Massachusetts Water Resources Authority (MWRA), and the company they hired to build it, Kiewit, “the Omaha-based construction giant” that, Mr. Swidey notes, “had built more miles of the U.S. highway system than any other contractor.” The director of MWRA, Doug MacDonald, had left a job as a partner in a Boston law firm to take over the authority, a behemoth of 1,700 employees and, at the peak of harbor cleanup, an additional 3,000 construction workers. Mr. MacDonald’s job included mollifying various parties who disagreed about how the Deer Island project would reach completion: Kiewit; the tunnel’s designers, mostly out of the picture by 1998; ICF Kaiser Engineers, hired by MWRA to protect its interests and act as Mr. MacDonald’s eyes and ears; the union “sandhogs” who bored out 2.4 million tons of rock to create the tunnel; the Occupational Safety and Health Administration, ostensibly looking out for worker safety but seeming more interested in handing out fines; and, though federal funds for harbor cleanup had long since dried up, “a bow-tied federal judge who served as the cleanup project’s robed referee, threatening stiff fines or worse if the deadlines he imposed were not met.”
. . .
The problem weighed most heavily on Kiewit. The firm was contractually obligated to deliver on time, subject to late-fee penalties of $30,000 a day, and to cover cost overruns. More, Kiewit had fronted the construction costs and would only be paid by selling the tunnel, piece by piece, to MWRA. The contract further obligated Kiewit to provide “lighting and ventilation (or breathing apparatus) for the personnel” that pulled the plugs but, in what seemed a senseless conflict, mandated that the plugs “could be removed only after the tunnel was completed,” writes Mr. Swidey, “meaning after the sandhogs had cleared out, taking their extensive ventilation, transportation, and electrical systems with them.”
Kiewit protested that clearing the tunnel of its life-sustaining infrastructure would make “the risk of catastrophe [to the workers pulling the plugs] . . . exponentially higher !” They offered several sound alternatives. In response, ICF Kaiser accused them of just wanting their payday. After a “year-long memo war,” Kiewit capitulated, cleared the tunnel and hired a commercial dive team to go into a pitch-black airless tube.

For the full review, see:
NANCY ROMMELMANN. “BOOKS; One Mile Down, Ten Miles Out; Their oxygen was starting to get thin. On the verge of passing out, Hoss radioed back to the Humvees. The reply was an expletive, and the line went dead.” The Wall Street Journal (Sat.,March 15, 2014): C9.
(Note: ellipses between paragraphs, added; ellipsis inside last paragraph, in original.)
(Note: the online version of the review has the date March 14, 2014, and has the title “BOOKSHELF; Book Review: ‘Trapped Under the Sea’ by Neil Swidey; In 1999, five deep-sea welders had to traverse a tunnel beneath Boston Harbor with no breathable air, no light and no chance for rescue should things go horribly wrong.” )

The book under review is:
Swidey, Neil. Trapped under the Sea: One Engineering Marvel, Five Men, and a Disaster Ten Miles into the Darkness. New York: Crown Publishers, 2014.

A&P Case Shows that Size Can Bring Economies of Scope and Scale

(p. A9) The claim that large, profit-driven firms are harmful to society has a venerable history in the United States. Perhaps no company was ever more vilified for its bigness than the Great Atlantic and Pacific Tea Co., which from 1920 to the 1960s was the largest retailer in the world. From the 1910s to the 1950s, as it cut out wholesalers and demanded volume discounts from food manufacturers, A&P was criticized for destroying the local merchants that formed the backbone of small-town America and the satisfying jobs they provided. Federal and state governments tried to cripple its business by prohibiting discounting; the Justice Department even won an antitrust case claiming that the company was selling food too cheaply. The fact that A&P’s economies of scope and scale saved shoppers 15% or 20% on groceries didn’t get much respect, just as Ms. Heffernan doesn’t much value the role that big businesses play in lowering costs today.
Yes, competition drives many companies to act in socially harmful ways, and competition within firms can get in the way of collaboration. But the fact that competition can be dysfunctional does not mean that scope and scale are economists’ fictions. Size does matter, and competition, while no panacea, does force people to find better ways of doing business.

For the full commentary, see:
MARC LEVINSON. “BOOKSHELF; When Size Does Matter; We glorify the local, but smallness didn’t stop the country’s savings and loans from needing a federal bailout in the 1980s.” The Wall Street Journal (Fri., April 18, 2014): A9.
(Note: the online version of the commentary has the date April 17, 2014, and has the title “BOOKSHELF; Book Review: ‘A Bigger Prize’ by Margaret Heffernan; We glorify the local, but smallness didn’t stop the country’s savings and loans from needing a federal bailout in the 1980s.”)

Levinson’s own book (not the one he is reviewing in the passages quoted above), is:
Levinson, Marc. The Great A&P and the Struggle for Small Business in America. New York: Hill and Wang, 2011.

Aloysius Siow’s Obituary for Gary Becker

My friend Aloysius Siow and I were graduate students at the University of Chicago in the mid to late 1970s, where we took courses from Gary Becker, and attended his workshop. In the past, I have posted several entries on Becker on this blog that appear under the Category “Becker, Gary.” I expect to write some thoughts on his passing, but am not ready to do so yet. Aloysius drafted an obituary without delay, and kindly said it was OK for me to post it as an entry on this blog.

Obituary: Gary Becker
The Father of Economics Imperialism

By Aloysius Siow, Professor of Economics
University of Toronto
May 4, 2014

Gary Becker, an American economist, died on May 3 at the age of 83.
His major contribution was the systematic application of economics to the analysis of social issues. Before his work, economists primarily studied how markets and market economies worked. He used economics to study discrimination, criminal behavior, human capital, marriage, fertility and other social issues.
He won the Nobel Prize in economics in 1992. He also won the John Bates Clark medal, awarded to the best American economist under 40, in 1967; and the Presidential Medal of Freedom, the highest honor award by the US president to a civilian, in 2007.
Becker’s father, Louis William Becker, migrated from Montreal to the United States at age sixteen and moved several times before settling down in Pottsville, Pennsylvania. Becker’s mother was Anna Siskind. He was born in Pottsville in 1930. At age five, Gary and his family moved to Brooklyn. He studied in Princeton University as an undergraduate. He did his PhD at the University of Chicago where he met Milton Friedman who would have an enormous influence on his intellectual development. After he obtained his PhD, Becker spent a few years as an assistant professor at the University of Chicago and then moved to Columbia University.
His path breaking 1955 dissertation was on the economics of discrimination. It was the first systematic study of a non-traditional economic topic using economics. In it, he argued that the difference in wages between a majority and a minority group can be used to measure the extent of discrimination in the labor market. When one points out today that it is unfair that women earn 80 percent of what men make, they are channeling Becker. His thesis analyzed how the South African system of apartheid benefited Whites at the expense of Blacks in South Africa. This analysis predated the Anti-apartheid Boycott Movement of the West which started in 1959.
The methodology and concern of his thesis previewed his research career. At the time of the publication of his thesis in 1957, economics was a conservative discipline, restricting itself to the study of the behavior of markets and market economies. Becker set for himself the task of systematically applying the tools of economics to the study of social issues. At the beginning, his work was generally ignored if not actually denigrated within the profession. Economists were supposed to study more important concerns.
After studying discrimination, he provided a modern economic theory of criminal behavior. Together with his study on discrimination, this work inspired the development of the law and economics movement.
At Columbia University, he began a systematic study of human capital, the study of the allocation of time and other topics in labor economics. Together with his colleague Jacob Mincer, they wrote many of the important papers in labor economics and also produced many successful graduate students. For example, their graduate student, Michael Grossman, wrote his thesis on health economics where he applied economics to the study of individual maintenance of health. Today, health economics is a major field of study and a central pillar of health policy. Due to the topics they worked on, they also attracted and successfully supervised many female PhD students. Claudia Goldin of Harvard University is perhaps his most illustrious female PhD student.
In 1970, Becker returned to the University of Chicago where he remained as a professor until his death. He continue to apply his economics to the study of the family, including the behavior of marriage markets, allocation of resources within the family and fertility behavior. The discussion of how economics can affect fertility anticipated government policies which seek to increase their native fertility rates. For example, Singapore has over 30 programs which seeks to increase her fertility rate.
Today, Becker’s approach is known as the rational choice approach in the social sciences. As the economics profession grew to appreciate his contributions, other social sciences have mixed feelings about his influence. On the one hand, they appreciate how he led economists to study different social issues. On the other hand, other social scientists often feel threatened by the invasion of economists.
Economists systematically use mathematical methods, statistical analysis and often large data sets. They prioritize cost benefit calculus over other factors which may also affect individual behavior. They had little patience with qualitative studies. Thus some social scientists felt that their contributions were unfairly ignored and so resisted the application of economics to their fields. For example, the Critical Legal Studies movement was developed in the 1970s in part in reaction to the success of the law and economics movement in law schools. In political science, rational choice theory is now a core field of study. Yet there are many political scientists who reject this approach.
Interestingly, motivated by the work of psychologists, economists have also begun to reject the purely rational calculus model of Becker as too narrow. Rather, these behavioral economics researchers argue that individuals have bounded rationality and are subject to systematic biases in their behavior. For example, Robert Shiller, a Nobel economist, has argued that bubbles occur in asset markets due to psychological biases. Thus the success of Becker has led to qualifications which is a hallmark of progress in science.
Contrary to many successful economists, Becker did not spend much time consulting for either the government or business. He was a conservative but unlike his mentor Milton Friedman, his direct influence on policy was minimal. Rather, the various economic fields which he instigated have had and continue to have significant influence on public policy. For example, every politician who wants to spend more resources on public education says that they are investing in the human capital of their society. Today, economists systematically contribute to policy discussions on maternity leaves, subsidies for child care and other social issues.
On a personal note, I was a graduate student at the University of Chicago in the late seventies where I met Gary Becker. I was interested in social issues. But because he was so intimidating as a scholar, I did not write my thesis under him nor was it on those concerns. Ten years after I obtained my PhD, and after I had moved to the University of Toronto, I wrote my first paper on the economics of the family motivated by a discussion in evolutionary psychology. Our interest on the economics of the family overlapped and we subsequently have had many professional interactions. I also began to realize that he did not know everything and that it is fine to work on topics which he had worked on.
Later in his life, he would sometimes introduce me as a former PhD student. At first I would correct him. But later I did not because perhaps he was right.

Gilder’s Information Theory of Capitalism Will Boost Morale of Innovative Entrepreneurs

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Source of book image: online version of the WSJ review quoted and cited below.

(p. A13) Individuals like Ford and Jobs are key figures in the economic paradigm that George Gilder lays out in “Knowledge and Power.” He calls for an “information theory of capitalism” in which the economy is driven by a dynamic marketplace, with information widely (and freely) distributed. The most important feature of such an economy, Mr. Gilder writes, is the overthrow of “equilibrium,” and the most important actors are inventors and entrepreneurs whose breakthrough ideas are responsible for “everything useful or interesting” in commercial life.
. . .
Aspiring owners shouldn’t look to “Knowledge and Power” for practical advice on starting a company, but Mr. Gilder’s case for the central role of entrepreneurship might boost their morale. Certainly his argument could not be more timely. Census Bureau data show that startups were responsible for nearly all new job creation from 1996 to 2009. Yet entrepreneurship itself (as measured by new business formation) has been stagnant for about two decades. Thus the important question for America’s future may well be, as Mr. Gilder says, “how we treat our entrepreneurs.” He persuasively shows that creating a more supportive climate for entrepreneurs–by clearing away burdensome regulations and freeing information from its current imprisonment–will result in a more prosperous and vigorous society, creating not only more jobs but more Jobs.

For the full review, see:
MATTHEW REES. “BOOKSHELF; The Real Market-Maters; Economists as far back as Adam Smith have undervalued entrepreneurs–the restless, inventive, job-creating engines of the economy.” The Wall Street Journal (Tues., March 18, 2014): A13.
(Note: ellipsis added.)
(Note: the online version of the review has the date March 17, 2014, and has the title “BOOKSHELF; Book Review: ‘Knowledge and Power’ by George Gilder
Economists as far back as Adam Smith have undervalued entrepreneurs–the restless, inventive, job-creating engines of the economy.”)

The book under review is:
Gilder, George. Knowledge and Power: The Information Theory of Capitalism and How It Is Revolutionizing Our World. Washington, D.C.: Regnery Publishing, Inc., 2013.

Strategic Conversations: Vital to Creative Adaptation or Reinforcers of Lazy Consensus?

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Source of book image: online version of the WSJ review quoted and cited below.

(p. A15) “Moments of Impact” is at its best on the importance of promoting different perspectives. Businesses need to look at the world through as many disciplinary lenses as possible if they are to cope with the fast-changing threats that confront them. But day-to-day corporate life is all about fences and silos. Strategic conversations give companies a chance to examine their business models from the outside–and, as the authors put it, to “imagine operating within several different yet plausible environments.”
. . .
Mr. Ertel and Ms. Solomon argue that companies increasingly face a choice between what Joseph Schumpeter called creative destruction and what they call creative adaptation–and that strategic conversations are vital to creative adaptation. Perhaps so. But strategic conversations can also reinforce lazy consensus, as people try to justify their jobs and protect their turf. Many bold decisions are driven by the opposite of “conversations”–by senior managers deciding to lop-off functions or take the company in a radically new direction.

For the full review, see:
ADRIAN WOOLDRIDGE. “BOOKSHELF; Go Ahead, Strategize; The best ‘strategy meetings’ unleash fresh thinking and offer maverick views; the worst and dull, unstructured time-sucks.” The Wall Street Journal (Thurs., March 27, 2014): A15.
(Note: ellipsis added.)
(Note: the online version of the review has the date March 26, 2014, and has the title “BOOKSHELF; Book Review: ‘Moments of Impact,’ by Chris Ertel and Lisa Kay Solomon; The best ‘strategy meetings’ unleash fresh thinking and offer maverick views; the worst and dull, unstructured time-sucks.”)

The book under review is:
Ertel, Chris, and Lisa Kay Solomon. Moments of Impact: How to Design Strategic Conversations That Accelerate Change. New York: Simon & Schuster, 2014.