What I've Been Reading in 2019

2019 was a year of some great reads, some expected gems, and some fun surprises.

Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life by Ogilvy ad executive Rory Sutherland was an unexpected gem. It mostly describes the peculiarities of real-world consumer behavior. It proves more convincing and entertaining than the contrived experiments of behavioral economist writers like Kahneman or Thaler. Sutherland’s book is also a welcome antidote to utilitarian focus-on-growth economic planning. He calls for us to reimagine our consumer environment to get more from less.

I wish Alchemy were required reading in Economics 101 course, where demand curves are given on Day 1. This is despite the fact that in the act of the sale, the demand curve is often self-referential. Picassos might sell for more simply because they are expensive, inverting the standard downward sloping demand curve. And behavioral economics is redundant anyhow, because economics is behavioral prima facie. It is the act of the sale—the marketing we might call it now—that drives the demand, and yes this includes all of the peculiar marketing coups that Sutherland documents. The book serves as one great fugue against the commodification of economic activity.  

Two fun surprising reads were Boy and Going Solo, remarkable memoirs by the British children’s author Roald Dahl.  Dahl can spin a yarn; remember Wonka, friendly giants and giant peaches. Raised in England, Dahl spent childhood summers in the beautiful fjords of Norway, where his family was from.  He lived in Dar-es-Salaam, Tanzania working for Shell petroleum. And as a Royal Air Force pilot in World War II, Roald Dahl survived battles in the sky with fleets of Luftwaffe Nazi fighter planes. It was a miracle he made it out of the war alive: most British fighter pilots died of bullets, fire, or impact. Dahl indeed suffered a harmful crash, but survived. His life and works balanced the real and the fantastic in such an unassuming and well-described way.

An expected gem was Deirdre McCloskey's Why Liberalism Works: How True Liberal Values Produce a Freer, More Equal, Prosperous World for All.  The book is a collection of McCloskey’s recent snappy interviews, probing articles and pointed blog pieces. Several chapters critique Thomas Piketty’s unlikely socialist economic tome-cum-best-seller, Capital. McCloskey rebuffs Piketty on three counts. First, Piketty’s own data shows that only in the USA, the U.K., and Canada has inequality been shown to rise (and just a little in recent years). This hardly makes a global trend. Second, McCloskey suggests that the additive arithmetic of one-time short-term economic redistribution does not remotely compare with the multiplicative long-term gains brought about by slow and steady market-tested betterment. And finally, even if we accept that both that inequality is present and that redistribution should occur, can we expect authoritarian or inept political regimes—where most of the desperately poor today live—to competently execute this redistribution? This is a gem by McCloskey, my favorite economist, essayist, and social theorist.

Nature’s Metropolis: Chicago and the Great West by William Cronon was a fine book, not a gem, which chronicles the City of Chicago’s great boom years from 1870-1900. The boom was brought on by the Midwestern bounty: timber from Wisconsin felled in winter and floated down spring-rushed rivers to the Chicago sawmills; grain from the surrounding flatlands milled in the city; and hogs and cattle from all around shipped on the freshly wrought railroads and slaughtered west of downtown. Of special interest to me is the banking and financing apparatus that grew around Nature’s Metropolis: futures and options leading to the increasing abstraction of physical goods. Cronon is a history professor at U. Wisconsin-Madison, and he’s clearly done his research. A recommended tome on economics history and the history of Chicago.

A fun surprise, and a recent read, was David Foster Wallace’s audio collection of book readings and radio interviews, David Foster Wallace: In His Own Words. Foster has a talent for saying the same things a dozen times, half of which are remarkably novel and interesting. Wallace killed himself in 2008, so all the more post-modern and eerie to hear his soft Midwestern musings on, notably, the ethics of boiling lobsters alive (they die, on average, after 40 seconds of … what, pain? Surely pain, no?).

A Truck Full of Money: Coding, Mania, Love, Genius, the Life of an American Entrepreneur was fun and lively, written by longtime tech describer, Tracey Kidder. I enjoy Kidder’s simple words and lack of editorializing.  The subject, Kayak.com founder Paul English, is presented as-is. “As-is” isn’t always pretty–at times the English is manic or grandiose and the man is open about his difficulties with bipolarity.  His condition adds to the contrast between the seriousness of English’s entrepreneurial efforts and the flamboyance of his success. The book reminds you that dual aspects of personality make great entrepreneurs. Disagreeableness is not a desirable trait, but as a startup founder you had better disagree with most people about your likelihood of business success, because, objectively speaking, it’s not high.

The Dream Machine was about the irrepressible JCR Licklider, the internet dreamer-of. Well, I didn’t so irrepressibly read the book; I made it about half way.  Hayek on Liberty by John Gray was a serious academic effort and took me a while to get through. I was especially interested in Gray’s critiques of Haykek, which I would like to revisit. Bitcoin Billionaires: A True Story of Genius, Betrayal, and Redemption by Mezrich made me change my mind about the Winklevii twins. Their spectacularly successful bitcoin investments saw them make out like bandits, after missing the Facebook rocket ship. The seriousness of their efforts in bitcoin and and sometimes the brilliance of the execution (as in when the twins go on a transcontinental voyage to secure their cryptographic private keys in Midwestern bank safety deposit boxes) is in its own way inspiring. Mezrich’s tale about the personalities around the absurd world of bitcoin are sure to entertain those interested in the space.

Out of the Gobi: My Story of China and America was a fascinating book about China in the 1960s and 1970s. Weijian Shan tells a wild story about China before, during, and after the Cultural Revolution. The author laments the waste of life, effort, and creativity. The words are simple and stoic — perhaps too stoic — about the famine that killed tens of millions and turned out to be one of the great humanitarian tragedies of the 20th Century. The author goes to the Gobi on a collective farm, where the crop yields are tragic, but the story is thrilling. I can hardly critique a memoir for being too focused on the personal details. After all, hardly anyone in China knew the destruction that Mao’s plans were bringing about. And the details in this book — plain, pensive, always moving the story forward — are remarkable.

China’s Economy by Arthur Kroeber was great book about China that I should read again. Kroeber is at the Brookings Institution and lays to rest some misinformation about China. Particularly interesting was Kroeber’s thoughts on China’s debt problems: not much of a problem, all considered, Kroeber claims. I was interested in this because of another book China’s Great Wall of Debt: Shadow Banks, Ghost Cities, Massive Loans, and the End of the Chinese Miracle by former WSJ China reporter Dinny McMahon, which argued that China’s boom had been fueled by foolhardy investments brought on by monumentally dumb policy interventions in infrastructure, housing, and banking. Kroeber seems to suggest that China’s sheer size and potential for growth render this claim unreasonably severe. Not sure which side I would bet, but I still lean towards concern that China can service its growing debt with the unwieldy, and well, unyieldy, assets that debt was meant to finance.

A Mind at Play: How Claude Shannon Invented the Information Age by Goodman and Soni was really interesting, most especially for me for its long ruminations about the nature of information. What indeed is information? Is it the absence of nothing (noise) or the absence of randomness — and is the absence of randomness, essentially, signal? Neither can be wholly true. Shannon was a playful genius, no doubt, but this book veers towards deification.

The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance was about the august and international firm of JP Morgan for over a century and up to around 1990. The firm introduced a number of innovations and spawned or financed a number of iconic brands (Edison’s General Electric and Carnegie’s US Steel among them). The firm was worldly from the start and has its roots in London, not New York. The bank was not without its blemishes. Legendary chairman Tom Lamont, for example, was a fascinating character. But he made a terrible mistake kowtowing to Mussolini in the 1930s.

In other economic history, or more like it, moral philosophy, How Adam Smith Can Change Your Life  by EconTalk Russ Roberts was a fine short book about the first economist. Indeed, 2019 also saw me dive deeper into the  Theory of Moral Sentiments by the venerable Adam Smith. A Splendid Exchange: How Trade Shaped the World by Berstein focused too much on Ancient commerce, and too little on the more dynamic past several centuries. The best-known interest rate observer, Jim Grant, wrote a new book about lender-of-last-resort-er Walter Bagehot, *Bagehot: The Life and Times of the Greatest Victorian.* It’s doubtful to me that he indeed was the greatest Victorian, nor is this the best book about Victorian times, but Bagehot was well-connected, and Grant of course has an eye for weaving in timely present-day anologues with his descriptions of bank notes, debt, confidence, and the verbiage of old-timey banking. I read this book with gusto.

Revolt of the Public by Martin Gurri is about how technology has given the public an irreversible look into the conduct of persons of authority: politicians, big business, and so on. How then can authority hold up when the Wizards of Oz have had their curtains pulled back? A bit of a stretch, Gurri’s claim, but what keeps it going is that you think it is an honest assessment and also, frankly, makes a lot of sense.

Quartered Safe Out Here was splendid. Told by George Macdonald Fraser, it’s about a unit of troops serving in the horrific conditions of the tropical Pacific during World War II, with starved Japanese men trying to kill them at every turn. The men go to hell and some never come back. I perused Abraham Lincoln by Carl Sandburg, but I couldn’t invest in the thousands of pages. Nor could I invest so much time in Robert Caro’s account of LBJ, The Path to Power, but I followed him at least out of the impoverished Texas hill country and into Washington during the Depression. 

Other finance books were read. Bitcoin Standard was great for those who are amenable to alternate theories of finance. I read the thing quickly, but the evidence could have been more comprehensive and tighter. I would have appreciated the author Saifedean Ammous spent more effort on economic indicators and technical reasons about why bitcoin could succeed—and was hoping he would opine less on, say, the immorality of modern art. The Man Who Solved the Market was about Jim Simons and Rennaissance Capital, whose Medallion Fund is one of the most successful hedge funds ever.  The Spider Network was about LIBOR manipulation by traders and the autistic trader who was in large part responsible and in who large part was scapegoated. Billion Dollar Whale: The Man Who Fooled Wall Street, Hollywood, and the World was a fun read about the sad theft of billions from the Malaysian government. The culprit remains on the run in China.

I read Dreaming in Code: Two Dozen Programmers, Three Years, 4,732 Bugs, and One Quest for Transcendent Software. And as a software developer, I suffered the long, slow engineering trainwreck along with those two dozen programmers. Finally, NPR correspondent’s Krista Tippet’s Becoming Wise: An Inquiry into the Mystery and Art of Living was fascinating for the characters she interviewed.

I may have read some other stuff; I can’t remember. Thanks to the authors for the initiative and the good reads. And here’s to the good books of 2020!