Book Bits |19 November 2016

The Great Convergence: Information Technology and the New Globalization
By Richard Baldwin
Review via The Economist
Bill Clinton once called globalisation “the economic equivalent of a force of nature, like wind or water”. It pushes countries to specialise and swap, making them richer, and the world smaller. In “The Great Convergence”, Richard Baldwin, a Geneva-based economist, adds an important detail: like wind and water, globalisation is powerful, but can be inconstant or even destructive. Unless beloved notions catch up with reality, politicians will be pushed to make grave mistakes.

The Road to Ruin: The Global Elites’ Secret Plan for the Next Financial Crisis
By James Rickards
Review via Kirkus Reviews
Can owning a Chagall keep the wolf from the door? In a time of a predatory capitalism that is beginning to feed on itself, that and a knowledge of complexity theory might get you more than a cup of coffee.
Granted, financial consultant Rickards (The New Case for Gold, 2016, etc.) has been crying Ragnarök for a long time. Even so, the subtitle of this latest may be a touch more breathless than the contents really call for. Never mind that the author does indeed urge on his readers the thesis that the elite, whoever they may be—George Soros, to be sure, but Christopher Dodd?—have three things on their agenda: “world money, world taxation, and world order.” The conspiracy theory stuff never goes away, but when Rickards’ text settles down into its nerdier tropes, it gets interesting, if a little daunting. The author argues that the complex global financial system is now largely immune to analysis by the static tools of classical economics; “complex systems,” he rightly remarks, “behave in a completely different manner from equilibrium systems.”

Virtual Competition: The Promise and Perils of the Algorithm-Driven Economy
By Ariel Ezrachi and Maurice E. Stucke
Summary via publisher (Harvard University Press)
In this thought-provoking exposé, Ariel Ezrachi and Maurice Stucke invite us to take a harder look at today’s app-assisted paradise of digital shopping. While consumers reap many benefits from online purchasing, the sophisticated algorithms and data-crunching that make browsing so convenient are also changing the nature of market competition, and not always for the better. Computers colluding is one danger. Although long-standing laws prevent companies from fixing prices, data-driven algorithms can now quickly monitor competitors’ prices and adjust their own prices accordingly. So what is seemingly beneficial—increased price transparency—ironically can end up harming consumers. A second danger is behavioral discrimination. Here, companies track and profile consumers to get them to buy goods at the highest price they are willing to pay. The rise of super-platforms and their “frenemy” relationship with independent app developers raises a third danger. By controlling key platforms (such as the operating system of smartphones), data-driven monopolies dictate the flow of personal data and determine who gets to exploit potential buyers.

Financial Analytics with R: Building a Laptop Laboratory for Data Science
By Mark J. Bennett and Dirk L. Hugen
Summary via publisher (Cambridge University Press)
Are you innately curious about dynamically inter-operating financial markets? Since the crisis of 2008, there is a need for professionals with more understanding about statistics and data analysis, who can discuss the various risk metrics, particularly those involving extreme events. By providing a resource for training students and professionals in basic and sophisticated analytics, this book meets that need. It offers both the intuition and basic vocabulary as a step towards the financial, statistical, and algorithmic knowledge required to resolve the industry problems, and it depicts a systematic way of developing analytical programs for finance in the statistical language R.

Payoff: The Hidden Logic That Shapes Our Motivations
By Dan Ariely
Summary via publisher (Simon & Schuster)
Bestselling author Dan Ariely reveals fascinating new insights into motivation—showing that the subject is far more complex than we ever imagined.
Every day we work hard to motivate ourselves, the people we live with, the people who work for and do business with us. In this way, much of what we do can be defined as being “motivators.” From the boardroom to the living room, our role as motivators is complex, and the more we try to motivate partners and children, friends and coworkers, the clearer it becomes that the story of motivation is far more intricate and fascinating than we’ve assumed.

Re-Imagining Capitalism: Building a Responsible Long-Term Model
Edited by Dominic Barton, et al.
Summary via publisher (Oxford University Press)
Capitalism has been an unprecedented engine of wealth creation for many centuries, leading to sustained productivity gains and long-term growth and lifting an increasing part of humanity out of poverty and subsistence. But its effects, and hence its future, have come increasingly under question: Is capitalism still improving the wealth and well-being for the many? Or, has it become destructive for the economy, where long-term value creation is being sacrificed to the pressures of short-termism; for society, where the gap between rich and poor has increased and opportunities to lift oneself out of poverty have dwindled; and for the natural environment, which seems increasingly under threat with unforeseen consequences for prosperity and global order?

The Destructive Power of Family Wealth: A Guide to Succession Planning, Asset Protection, Taxation and Wealth Management
By Philip Marcovici
Summary via publisher (Wiley)
The Destructive Power of Family Wealth offers thoughtful, holistic planning to ensure that your wealth remains a positive force for your family. While today’s families have become global and the world has become smaller and more mobile, we have not yet become immune to the problems wealth poses to the family unit. This book provides authoritative guidance on family wealth management, with an emphasis on both family and wealth. Global taxation regimes, changing bank secrecy laws, asset protection and other critical issues are examined in depth to assist wealth owners in planning, and the discussion includes details on the essential tools that aid in the execution of any wealth management strategy. More than a simple financial planning guide, this book also delves into the psychology of wealth, and the effect it has on different family members; wealth destroys families every day, and smart management means maintaining the health of the family as much as it means maintaining and expanding wealth.