The main idea here is to explain and demonstrate that Fed existence is not helpful, but rather detrimental to efficient functioning of economy because it cannot effectively fulfill its function to control money supply.
PART ONE: CREDIT
ONE The Rate Setters at the Fed Should Attend More Taylor Swift Concerts
The first chapter uses example of Uber dynamically changing rate for taxi after popular concert, consequently providing ability to meet demand that was properly decreased by higher price. The point here is to demonstrate that it is not possible establish best price from outside and that this general rule of economics applies to the price of credit that Fed supposedly controls.
TWO Jim Harbaugh, Urban Meyer, and Pete Carroll Would Never Need an Easy Fed
This chapter uses sport to provide example of inefficient use of capital. The lesson here is that entrepreneurs are human and as such make mistakes leading to failure and economy has a tool to clear up consequences of such failure – recessions. The point here is that recessions are not market failure, but rather an act of maintenance of the system, necessary to keep it in good shape.
THREE In Hollywood, the Traffic Lights Are Almost Always Red
This chapter uses Hollywood to demonstrate actual independence of credit and credit rates from Fed, mainly by pointing out that popular actors believed to have potential to produce blockbuster in their next movie have no problem to get vast amount of credit at low rate regardless of economic cycle, while actors who failed could not get credit at any price.
FOUR In Silicon Valley Your Failures Are Your Credit
This is extension of credit cost irrelevance discussion based on example of Silicon Valley where credit is relatively plentiful because huge potential return. The failure here is celebrated as necessary step in acquiring experience that will lead to future win, even if it has a significant feel of lottery in it.
FIVE Did You Hear the One about Donald Trump Walking into a Rank?
This chapter uses examples of Donald Trump and Michael Milken to present idea that the real private credit has overwhelming dependency of character and history of creditor.
SIX Ben Bernanke’s Crony Credit
In this chapter author is moving away from private credit to state interference in credit and uses example of Bernanke and Paulson to demonstrate how government’s violent interference creates huge redistribution opportunity for individuals in possession of intimate connections with and knowledge of bureaucratic hierarchy.
SEVEN What the Supply-Siders and Hillary Clinton Sadly Have in Common
This chapter presents somewhat unusual proposition that supply side economics actually empowers government distortion of economy and misallocation of resources as it is embodied mightily in Hillary’s personality and ideas. The logic here is simple: supply side decrease taxes resulting in increase in government tax revenues as consequence allowing government spent more to bribe more constituencies and increase its power.
EIGHT Why “Senator Warren Buffet” Would Be a Credit-Destroying Investor
This chapter makes another important point to demonstrate necessity of failure. It uses Warrant Buffet and his relatively low rate of capital misallocations to demonstrate that private market feedback allowed for quick reaction in reallocation resources away from unproductive use. If Buffet were a senator there would be no reason for him to react quickly, moreover political resource allocation always includes supporters who receive these resources, therefore reallocating resources to more productive use would cost senator Buffet support of people and would have negative impact for him, while similar reallocation for private investor Buffet would be positive for him by preventive loss or providing bigger gain.
NINE The Credit Implications of the Fracking Boom
This chapter initially discusses complexity and necessity of division of labor (“I, pencil” and similar) and then applies it to credit in fracking industry. The point here is that for global economy credit for fracking is net loss because there are plentiful other reserves of oils that are profitable with traditional and much cheaper technology. Author points out stability of oil price in gold and relate its variation in dollars to political manipulation of dollar. His point is that USA president always get dollar he wants, but gold it constant.
TEN Conclusion: Sorry Keynesians and Supply-Siders, Government Is Always a Credit-Shrinking Tax
The final chapter about the Credit summarizes author’s ideas that credit is nothing more than tool of resource allocation and any government interference in this allocation is really just a tax that moves resources away from productive use. In these terms supply siders who decrease tax rate consequently increasing economy and with it tax returns are guilty in transferring more resources to government bureaucracies to waste.
PART TWO: BANKING
ELEVEN NetJets Doesn’t Multiply Airplanes, and Banks Don’t Multiply Money and Credit
Here author uses example of air rental company NetJets to demonstrate that credit represents real resources and exists outside of banks and feds activities that change money supply. The point is that if one just creates money by fiat and gives it out as credit, this credit would not bring in resources if they do not exists. Since money nothing more than facilitator of credit such fiat would only lead to impediment of real economy.
TWELVE Good Businesses Never Run Out of Money, and Neither DO Well-Run Banks
The point of this chapter is that good business can always get necessary credit as long as creditors believe that it is good. The same applies for banks therefore government demand to keep a share of deposits as cash are meaningless for good banks and would not prevent bad banks from failure.
THIRTEEN Do We Even Need Banks?
This is reference to advance technology that allowed for credit cards and then for crowd financing such as Kickstarter. These developments make banks somewhat outdated. The inference here is that we do not need banks in their current form and they could survive and maintain relevance only if government gets out and allow them compete with all other forms of credit.
FOURTEEN The Housing Boom Was Not a Consequence of “Easy Credit”
This is discussion directed against idea that Housing boom was caused by easy credit. Author repeats his point that monetary credit just represents resources and as such could not increase or decrease their amount, so the crisis occurred mainly to weak dollar policy.
FIFTEEN Conclusion: Why Washington and Wall Street Are Better Off Living Apart
The final conclusion of this part is that close link between banks and government distorted working of economic system in such way that banks got to care about only one customer – government, neglecting all others and it led to gross misallocation of resources.
PART THREE: THE FED
SIXTEEN Baltimore and the Money Supply Myth
This chapter is directed against monetarists. The main point here as elsewhere in this book is that money is just a measure of resources and does not really have any serious impact on resources exchange. As example author uses Baltimore where non-productive welfare recipients would not get better if additional money supply increase their demand because they do not produce anything so this demand would not stimulate Baltimore. In addition to Keynesian solution author rejects gold standard as being far from ideal and suggest that the best way would be to leave money creation to private market where multiple currencies could compete and the most stable and liquid would win.
SEVENTEEN Quantitative Easing Didn’t Stimulate the Economy, Nor Did It Create a Stock-Market Boom
This chapter is discussion directed against Quantitate Easing arguing that government should not use political methods to stimulate spending. The main point here is that QE based on the strange idea that could be buyers without sellers and borrowers without savers.
EIGHTEEN The Fed Has a Theory, and It Is 100 Percent Bogus
This is discussion about Philips curve and another strange believe that economic growth causes inflation and it is somehow connected with decrease in unemployment, so by inflating money Fed can decrease it. Author believes that this idea is 100% wrong because it does not account for global character of the market and, most important, for continuing increase in productivity.
NINETEEN DO We Really Need the Fed?
The obvious answer is clearly “No” for reasons exemplified by Taylor Swift and Barney Madoff – credit is something that borrower already has either as marketable collateral for loan or human capital that represents high probability of future cash flows. By definition Fed function is monetary intervention into market to control inflation and unemployment, which according to author and the last hundred years of history, could not possibly work.
TWENTY End the Fed? For Sure, But Don’t Expect Nirvana
Here author again briefly going through history and discussing Fed’s failures, but he warns it is not really Fed, but government spending that causes the problem and Fed just facilitate this spending.
TWENTY-ONE, Conclusion: The Robot Will Be the Biggest Job Creator in World History
Interestingly enough the concluding chapter is about robots and their impact. Author rejects the idea that robots would push humans out of productive activities and crash economy. He looks at them as dramatic enhancement of productivity making resources and correspondingly credit abundant and therefore giving humans tremendous entrepreneurial opportunities.
MY TAKE ON IT:
I find the author’s idea that credit is not money, but rather representation of resources pretty compelling and his critic of Fed as mainly harmful blunt instrument generally used to hurt economy mainly correct. I think that idea of private money theoretically interesting, but misses a very important issue of transaction costs: any individual on the market would have to spend unordinary amount of time and effort researching validity and efficacy of currency for transaction. I would suggest another solution: to keep Fed as currency insurance tool that could be financed by currency issuer and would provide currency stability insurance on transactional basis. The government involvement here is necessary because its coercion and violence is necessary tools to get access to full information and limit cheating. As for robots as credit enhancers that would just add to human productivity rather than put humans out of work, I think author makes mistake by overestimating human propensity for productive activity. A significant number of individuals, if not the majority would prefer do nothing or pursue completely non-productive objectives if left alone and deprived of external force that makes them to sell labor for living. I really do not think it is a huge problem, but if not taken care of by establishing mechanism of resource allocation for such people, it could become very dangerous source of tension in society.
The main idea here is that the radical shift in economics and property rights as its foundation currently is under way. It is shift from ownership economy to sharing economy when people use staff that they do not own, but rather share with other people or exchange it on peer-to-peer basis rather then produce, sell, and distribute this staff via hierarchically structured corporations.
In introduction author explicitly states the main idea of this book and provides main examples of the new economy: Airbnb, Uber, and Facebook. Important point here is author’s understanding that peer-to-peer exchange is not new, but it was key feature of pre-industrial economy. The main and very radical difference is that it used to be local exchange between neighbors and now it is becoming global exchange between strangers. The relatively detailed review of specific business model provides examples of how exactly it is done.
- The Sharing Economy Market Economies, and Gift Economies
This is about definition of sharing economy and its nature as notion covering all Market-To-Gift Spectrum of exchange. The key features:
- Largely market based
- High impact capital both material and human
- Crowd-based networks
- Blurring lines between personal and professional
- Blurring lines between fully employed and casual labor
- Extensive use of crowd funding
- Importance of platforms
- Laying the Tracks: Digital and Socioeconomic Foundations
This chapter discusses history of Internet development and digitalization of exchanges from e-bay buying and selling to digital currencies, 3d printing, and even digitization of trust.
- Platforms: Under the Hood
This is about necessity and nature of platforms for sharing economy. It provides an interesting graph for relationship between markets vs. hierarchy and complexity vs. specificity of products or services:
- Blockchain Economies: The Crowd as the Market Maker
The final chapter in this part is about blockchain logic with its distributed transaction posting and its implementation for digital currency (bitcoin) and decentralized services platforms.
- The Economic Impacts of Crowd-Based Capitalism
For economic impact author initially discusses deficiencies of usual methods of measuring economy such as GDP and overall difficulties of measuring digital economy. After that he points out four key economic effects:
- Altering capital impact, for example increase ration of use of existing car with Uber
- Economies of scale would be overcome by economies of networks
- Increased Variety = Increased Consumption
- Democratization of Opportunity due to use of platforms and crowd financing, which dramatically decreases cost of entry into practically any economic activity.
- The Shifting Landscape of Regulation and Consumer Protection
This chapter is about dramatic changes that will necessarily come in the area of regulation that would become less government centric and more peers controlled. Here is a nice graph for this:
- The Future of Work: Challenges and Controversies
Here author looks at the change in nature of work with local hands on work providing advantage to semi-skilled workers, while pushing higher skills level workers into more generalist activities with special tasks assigned to machines.
- The Future of Work: What Needs to Be Done
This is discussion of need to do something to counter trends that are pushing humans out of labor market. Author seems to believe that the best way to do it is promote self-employment and contract work with some guarantied safety net. It also seems to be consistent with what people really want:
Here author briefly restated main points he made in each chapter and reaffirms his believe that we are in process of moving away from managerial capitalism of XX century to crowd-based capitalism of XXI century that will provide for much more informed decisions by consumers, new regulatory framework to rebalance private-public relationships, and establish new, yet unknown form of society.
MY TAKE ON IT:
I fully agree that we are in process of revolutionary change in the method of economic organization of society comparable with industrial revolution. However I do not share most of ideas about shared economy, mainly because I believe that value of material assets is going down dramatically, therefore idea of savings coming for example from sharing car looks a lot less attractive if cost of car represents not 6 month of earnings, but rather 6 days of earnings. In this case instead of Uber self-driving car picking one up on demand a person would have one’s own car finely tuned to personal needs and idiosyncrasies. Similar approach could be applied to just about everything. To put in simple, I believe in dramatic increase in ownership of everything made possible by dramatic decrease of costs of everything, rather than savings due to increase in asset utilization via sharing. Similarly instead of massive service economy where everybody makes living by serving everybody, I believe we are moving to automated economy when machines are serving everybody, while humans are busy conducting self-serving activities some of which would include non-quantifiable services to each other.
The main idea of this book is deeply counter Marxist and even counter materialistic. It posits that tremendous growth in productivity and wellbeing of humanity over last 300 years was caused by dramatic change in ideological attitudes to the business and bourgeois middle class that represents it. The attitude changed from complete contempt traditionally expressed by aristocracy, clerisy, and peasantry to respect and even somewhat adulation. Author calls the new ideology “Trade Tested Betterment”, meaning that economic players have incentives to improve productivity, types of goods and services they produce, and then put it out for test by free market competition where some of these would survive and some would not. As the result it opened the way for population to produce and exchange goods and services relatively freely with diminishing of usual intervention of state in their business, and, moreover, allowed retaining profits in the hands of producers. The secondary idea however is that starting in 1848 the clerisy conducted successful complain against dignity of business resulting in catastrophic revolutions of XX century and dramatic slowdown of economic development in early XXI century. The fight is still on and it is not clear yet whether clerisy will succeed in stopping capitalist development of humanity.
First Question: What Is to Be Explained?
Part I A Great Enrichment Happened, and Will Happen
1 The World Is Pretty Rich, but Once Was Poor; 2 For Malthusian and Other Reasons, Very Poor; 3 Then Many of Us Shot Up the Blade of a Hockey Stick; 4 As Your Own Life Shows; 5 The Poor Were Made Much Better Off; 6 Inequality Is Not the Problem; 7 Despite Doubts from the Left; 8 Or from the Right and Middle; 9 The Great International Divergence Can Be Overcome
This part reviews dramatic results of economic development of capitalist countries over the last 300 years comparatively with not only previous development, but also with contemporary development of countries that did not move to Trade Tested Betterment. The results are amazingly obvious: not only western countries that embarked on this methods of society organization prospered, but also big eastern countries such as China and India moved to prosperity as soon as they started to use the same approach. Side story here is that it impacted not only rich, it improved lives of poor even more so these poor now have more access to goods and services than rich of the past.
Second Question: Why Not the Conventional Explanations?
Part II Explanations from Left and Right Have Proven False
10 The Divergence Was Not Caused by Imperialism; 11 Poverty Cannot Be Overcome from the Left by Overthrowing “Capitalism”; 12 “Accumulate, Accumulate’ Is Not What Happened in History; 13 But Neither Can Poverty Be Overcome from the Right by Implanting “Institutions”; 14 Because Ethics Matters, and Changes, More; 15 And the Oomph of Institutional Change Is Far Too Small; 16 Most Governmental Institutions Make Us Poorer
This part looks at traditional explanations for explosive growth in productivity such as Imperialistic robbery of resources from other countries, accumulation of capital, development of new institutions, and wise governmental policies. Author rejects all these explanations because: divergence in Europe that caused continuing improvement in militaristic performance provides good reasons for European dominance over the world, but could not explain internal improvements in productivity. Accumulation of capital could not explain it either, because countries that had longer history of development like China did not get there first despite such huge capital investment as irrigation systems or great wall. The idea of institutional explanation also does not hold water because laws, effective property rights, and such existed for a long time, but did not lead to any significant improvement in economic growth. Actually author accepts role of institutions as necessary condition of improvement, but denies their sufficiency and even provides small chapter on deleterious effect of some government institutions on economic growth.
Third Question: What, Then, Explains the Enrichment?
The next 6 parts trying to explain how exactly the great enrichment occurred by looking at different sides of ideological processes in western societies.
Part III Bourgeois Life Had Been Rhetorically Revalued in Britain at the Onset of the Industrial Revolution
17 It Is a Truth Universally Acknowledged That Even Dr. Johnson and Jane Austen Exhibit the Revaluation; 18 No Woman but a Blockhead Wrote for Anything but Money; 19 Adam Smith Exhibits Bourgeois Theory at Its Ethical Best; 20 Smith Was Not a Mr. Max U, but Rather the Last of the Former Virtue Ethicists; 21 That Is, He Was No Reductionist, Economistic or Otherwise; 22 And He Formulated the Bourgeois Deal; 23 Ben Franklin Was Bourgeois, and He Embodied Betterment; 24 By 1848 a Bourgeois Ideology Had Wholly Triumphed
This part looks at representation of bourgeoisie in literature using examples of novels by Jane Austin and plays by Samuel Johnson. However the most attention author allocates to Adam Smith, but not to his usually discussed economic masterpiece “Wealth of Nations”, but to his less known “The Theory of Moral Sentiments” in which Smith discusses complexity of bourgeois ideology, stressing that it goes way beyond purely material (prudential) considerations. There is a very interesting moral and ideological interplay between bourgeois need in honesty and trustworthiness that dramatically decreases cost of transactions and enticement of monopoly and use of informational disparity between seller and buyer. One important point is that bourgeois control over political power could remain bourgeois only in condition of democracy when individuals currently in power could not use it to stop competition and consequently betterment. When they are able to do it bourgeois order naturally degrades into aristocracy as it did happened in Venice and many other places. There is also interesting discussion here about virtues nicely presented by diagram below:
Author also discusses “the Bourgeois Deal” as it was formulated by Adam Smith, which actually contains not one but two “invisible hands”. In addition to “invisible hand” of market forces it has “invisible hand” of “natural liberty” that removes very visible hand of the state from controlling and directing individual actions leaving choice of winners and losers to market place only. As example author analyses Ben Franklin’s live as quintessential bourgeois type. Finally in this part author looks at classes and their values: Aristocrat vs. Peasant vs. Bourgeois and trying to prove that by 1848 the Bourgeois triumphed over Aristocrat and Peasant. Here is a nice table for this comparison:
Part IV Pro-Bourgeois Rhetoric Was Forming in England around 1700
25 The Word “Honest” Shows the Changing Attitude toward the Aristocracy and the Bourgeoisie; 26 And So Does the Word “Eerlijk”; 27 Defoe, Addison, and Steele Show It, Too; 28 The Bourgeois Revaluation Becomes a Commonplace, as in The London Merchant; 29 Bourgeois Europe, for Example, Loved Measurement; 30 The Change Was in Social Habits of the Lip, Not in Psychology; 31 And the Change Was Specifically British
This is about formation of the new ideological attitude to bourgeois activities and people. It starts with tracing development of the world “honest” in literature and general use from aristocratic meaning of belonging to upper class of society to purely bourgeois meaning of acting honestly – truthfully, without cheating and deceit. Similar change occurred in attitudes to trade, the typical bourgeois activity – it went from being despised activity of low-born to, if not necessary noble, then quite decent, productive, and highly approvable. It went in parallel with advancement of typical bourgeois attitude to the world: learning objective facts and acting in accordance to them to achieve success. Author provides evidence from literature and historical evidence to support these ideas. Author however stresses that change was mainly rhetorical, rather than psychological and importantly occurred in the British world.
Part V Yet England Had Recently Lagged in Bourgeois Ideology Compared with the Netherlands
32 Bourgeois Shakespeare Disdained Trade and the Bourgeoisie; 33 As Did Elizabethan England Generally; 34 Aristocratic England, for Example, Scorned Measurement; 35 The Dutch Preached Bourgeois Virtue; 36. And the Dutch Bourgeoisie Was Virtuous; 37 For Instance, Bourgeois Holland Was Tolerant, and Not for Prudence Only
However even in Britain the rhetorical change was somewhat superficial. In this part author provides multiple examples of persistent contempt to bourgeoisie from Aristocracy and Intelligentsia from Shakespeare to any typical politician or lord by using multiple examples from literature of the period to confirm this point. However author also looks at the country where bourgeois virtues actually become the core of national culture – Netherlands. Especially important was such typically bourgeois virtue as tolerance extended far beyond tolerance to diverse trading partners to religious and political attitudes on individual level.
Part VI Reformation, Revolt, Revolution, and Reading Increased the Liberty and Dignity of Ordinary Europeans
38 The Causes Were Local, Temporary, and Unpredictable; 39 “Democratic” Church Governance Emboldened People; 40 The Theology of Happiness Changed circa 1700; 41 Printing and Reading and Fragmentation Sustained the Dignity of Commoners; 42. Political Ideas Mattered for Equal Liberty and Dignity; 43 Ideas Made for a Bourgeois Revaluation; 44 The Rhetorical Change Was Necessary and Maybe Sufficient
This part is an attempt to identify reasons for this change. Author rejects the idea that such change was preordained part of inevitable progress and believes that it was just serendipitous combination of factors often local and temporary that led to change in attitude. One of the most important was religious change in theology of happiness from passive attitude of “’god willing” to active attitude “work hard to get there”. The significant part of the process was availability of printing and explosion of reading and discussing political matters. At the end of this part author promotes idea that rhetorical change in attitude to bourgeoisie was not only necessary, but also maybe even sufficient to start up process of great enrichment via trade-tested betterment.
Part VII Nowhere Before on a Large Scale Had Bourgeois or Other Commoners Been Honored
45 Talk Had Been Hostile to Betterment; 46 The Hostility Was Ancient; 47 Yet Some Christians Anticipated a Respected Bourgeoisie; 48 And Betterment, Thou Long Disdained, Developed Its Own Vested Interests; 49 And Then Turned; 50 On the Whole, However, the Bourgeoisies and Their Bettering Projects Have Been Precarious
Here author discusses traditional disdain to trade typical for practically all cultures and people. One of the reasons for this is that bourgeois methods require the development of relatively high levels of human contacts. Here is nice table for this:
Part VIII Words and Ideas Caused the Modern World
51 Sweet Talk Rules the Economy; 52 And Its Rhetoric Can Change Quickly; 53 It Was Not a Deep Cultural Change; 54 Yes, It Was Ideas, Not Interests or Institutions, That Changed, Suddenly, in Northwestern Europe; 55 Elsewhere Ideas about the Bourgeoisie Did Not Change
This part is about words being the core of economic activities and how they changed dramatically and quickly. Author analyses share of economic activities, that is mainly dependent of verbal activities, and finds that it by far exceeds any other activities involved in generating goods and services. Author also provides example of quick change in rhetoric leading to dramatic consequences such as brief and murderous rule of Khmer Rouge. Author also reviews and rejects other potential causes of the change such as institutions and interests, claiming that these did not change that much. Finally author compares other parts of the world where attitude to bourgeoisie did not change and finds that they also did not have anything like economic revolution of the western countries.
Fourth Question: What Are the Dangers?
Part IX The History and Economics Have Been Misunderstood
56 The Change in Ideas Contradicts Many Ideas from the Political Middle, 1890-1980; 57 And Many Polanyish Ideas from the Left; 58 Yet Polanyi Was Right about Embeddedness; 59Trade-Tested Betterment Is Democratic in Consumption; 60 And Liberating in Production; 61 And Therefore Bourgeois Rhetoric Was Better for the Poor;
To answer the question about future author first summarizes history of economic ideas about reasons and causes of drastic economic growth of the last few centuries. Author looks again at North and Thomas ideas of institutional development, XIX century Marxist ideas of capital accumulation, contemporary redistributionist ideas based on zero sum economy. Author allocates lots of space to polemics against Polanyish ideas of capitalism as recent development despite plentiful evidence of existence of market economy and property right for thousands years throughout human history. Here is a nice table demonstrating various ideological constructions:
The last two chapters of this part are restating author’s logic that change in rhetoric and attitudes led to trade-tested betterment as key method of economic activities in western societies leading to dramatically improved productivity and innovation and consequently improvement in lives of everybody including poor.
Part X That Is, Rhetoric Made Us, but Can Readily Unmake Us
62 After 1848 the Clerisy Converted to Antibetterment; 63The Clerisy Betrayed the Bourgeois Deal, and Approved the Bolshevik and Bismarckian Deals; 64 Anticonsumerism and Pro-Bohemianism Were Fruits of the Antibetterment Reaction; 65 Despite the Clerisy’s Doubts; 66 What Matters Ethically Is Not Equality of Outcome, but the Condition of the Working Class; 67A Change in Rhetoric Made Modernity, and Can Spread It
The last part reviews ideological development after 1848 when bourgeois value again came under sustained attack, this time not from Aristocracy, but from the increasingly numerous and consequently empowered part of population – Clerisy. Either in its Bismarckian relatively benign welfare state or in its radical bloodthirsty Bolshevik / Nazi incarnation XX century societies were mainly driven by Clerisy with its rejection and contempt for all things bourgeois. As result the economic development and prosperity growth in parts of the world where Clerisy’s ideas become dominant where slowing down or even reversed. Author demonstrates how it happens and keeps pressing the idea that we need to reject clerisy’s anti-betterment efforts and unmask their reasons: income inequality and similar fuses used by Clerisy are false narratives because in reality bourgeois rhetoric and practice led to tremendous improvement in lives of regular people and this is what really matters.
MY TAKE ON IT:
It is somewhat difficult for me, with my Marxist education and background, to accept author’s main position that it was the ideas that matter the most, not material and technological development. Nevertheless I find it very stimulating to look at reasons for industrial revolution in human minds rather than in steam engine and I think it is the right place to look at. However I do not think that explanation of the ideological change, as mainly serendipitous event, is good enough. I personally believe that it is much more realistic to look at it as the consequence of interplay of Darwinian struggle for survival at two levels: individual and group. The individual struggle occurs within society and has mainly peaceful character because alternative is chaos that inevitably leads to dysfunction of society. The struggle between groups however more often than not leads to intermediate change from war to peace and back, but could never be completely settled in peace until groups merge or one group annihilates another. Two developments are possible and actually occurred in history. One is unification of society as one group big enough so wars or trade with external societies have only marginal effect as it happened in China or Russia. In this case Clerisy, which controls organized power in all societies, becomes dominant and just does not allow development of bourgeois ideas and dignity to occur. In this case individual struggle comes down to meritocratic advancement via some kind of examination and/or bureaucratic maneuvering. Another model of development: small states always in war and/or extensive trade with each other eventually bound to generate 2 different power centers in society: Aristocracy that handle the war and Bourgeoisie that handle the trade. On early stages of development before effective firearms developed Aristocracy has huge advantage in use of power because it is mainly manual and requires constant training so one well trained man with a sword can easily overcome a dozen untrained individuals with exactly the same type of swords. In this case Aristocracy could not only require significant share of production as payments for protection from external groups and maintaining internal order, but also just take whatever it wants from actual producers internally within a group (society). As soon as firearms become effective, bourgeoisie can protect itself with minimal training, refuse Aristocracy’s unlimited ability to take and start imposing its own virtues on society. Eventually with development of mass mobilization and conscript armies it becomes capable to send Aristocracy to dustbin of history. However the following peaceful consolidation of society and consequently its wealth and complexity causes expansion of growth and with it expansion of Clerisy required to maintain order and internal interactions in complex society in its role as bureaucracy, but in process producing multitude of individuals with expensive qualifications, but no ability to find good place in bureaucracy or aptitude to achieve level of success in business that they feel entitled to. Logically either bureaucratic or redundant parts of Clerisy necessarily reject bourgeois values as incompatible with their values. The key differences in values are caused by methods of achieving success: Trade Tested productive work for bourgeoisie and Formal Testing and Bureaucratic maneuvering for Clerisy.
We are living at the moment of continuing struggle between these two groups with periodic change from Clerisy winning, and then leading to economic downfall, decrease in prosperity for everybody except for corrupted top-level members of Clerisy. Eventually it gets rejected by majority, causing Bourgeoisie winning, and then leading to economic improvement overall, but dramatic increase in inequality between winners and losers, with significant number of losers being educated members of Clerisy capable organizing losers into movement to reject Bourgeois order in reestablish Clerisy dominance. I believe this periodic process is coming to the end, but it would take another 50-100 years to find new structure of society where Clerisy would become unnecessary and Bourgeois ideas of Trade-tested Betterment will completely win.
The main idea of this book is to review success or failure of presidents from two different angles. One is the evaluation of contemporaries based on voting history: winning 2 terms and leaving next president of own party constitute success. One term or change of party in power after the second term constitutes failure. The second angle is history evaluation, which actually means evaluation by historians based on a number of polls. This angle is highly subjective and susceptible to influence of historians’ own political views, which are typically leftist, big government supporting views. From this point of view whoever president increased size and power of government is a good president. The other set of ideas reviewed is about what makes or breaks individual’s reputation as good or great president. This is highly dependent on circumstances: war vs. peace, massive change in direction of the country make presidents great like Lincoln or FDR, while continuation of prosperity and prevention of big political earthquakes like Coolidge or Eisenhower does not.
PART I: THE HISTORIANS
Chapter 1. The Judgment of History
This is about history of surveys of historians about presidents that started in 1948 by Arthur Schlesinger and continues ever since with some presidents going up and others down in ratings, but with relatively small variations.
Chapter 2. The Vagaries of History
This chapter nicely demonstrates how historians’ evaluations are dependent on the latest greatest book published by the same historians about one president or another.
PART II: THE PEOPLE
Charter 3. The Making of the Presidents
This is about history of presidency as institution and how it changed over time moving from the office of equal or even somewhat inferior power to legislature early in XIX century to the office consistently getting more power during civil war, even if it was somewhat diminished after the war. Eventually starting with Teddy Roosevelt early in XX century it was gaining more and more power, eventually achieving levels of contemporary imperial presidency.
Chapter 4. The Presidential Referendum
This chapter is about presidential election as referendum on results of the president in power. It includes description of 13 Keys (6 false keys means party change) for reelection, which predictable power was ones again confirmed by elections of 2016:
Chapter 5. The Judgment of the Electorate
This is about judgment of electorate based on examples of presidents Cleveland who had 2 non-consecutive terms failing to be reelected both times, Madison and Grant who were both reelected and left their party in power after the second term.
Chapter 6. The Stain of Failure
The meaning and making of presidential failure discussed here using examples of presidents Harding, Taylor, Fillmore, and Pierce. However the most detailed discussion of failure provided is about pre-civil war Buchanan who basically created conditions for the war and after civil war Andrew Jonson who made recovery extremely difficult. This chapter based on historians’ evaluation and being leftist creatures they are, they include in failure both Coolidge who avoided depression after market crash in early 1920-21 by using laissez faire policy and Hoover who was instrumental in creating great depression after market crash in 1929-33 by strong governmental intervention.
PART III: THE TEST OF GREATNESS
Chapter 7. War and Peace
This is review of war presidents and analysis of which of them achieved greatness and which did not. It reviews Madison – War of 1812(Success), Polk – Mexican War (Success), Lincoln – Civil War (Success), and McKinley – Spanish War (Success), Wilson – WWI (Failure), Roosevelt – WWII (Success), Truman – Korean War (Failure), Johnson – Vietnam War (Failure), Bush I – Iraq War (Success). Author stops here and does not include the latest wars.
Chapter 8. Split-Decision Presidents
These are presidents who succeed in getting the second term, but failed to leave their party in power. Usually it is result of second term being a lot less successful than the first. Examples provided are Eisenhower and Nixon, the former relatively successful, but not enough to keep power by smallest margin possible, but the latter completely failed with Watergate making it impossible to maintain power for the party.
Charter 9. Leaders of Destiny
These are presidents who drastically changed nature of the system leaving America after their rule practically different country. There are only three such revolutionary presidents so far: Washington, Lincoln, and Franklin Roosevelt.
PART IV: REPUTATIONS IN FLUX
Chapter 10. Republican Resurgence
Author included into this category two republican presidents Reagan and Bush I. It seems to be because these two are republicans and therefore generate strong rejection by historians who have difficulty to accept success of ideologically hostile presidents. Nevertheless both of them seem to get more appreciation over time so their rating will probably improve.
Chapter 11. The Post-Cold War Presidents
This is about Clinton and Bush II both of which managed to get the second term, but failed their party. Obviously it is too early to look at history judgment because not enough time expired since their presidencies.
Conclusion: Clear and Present Danger
Here author discusses success of the office of president historically and difficulties of present time for America. He concludes that it looks like we are due for the next Leader of Destiny to put America in the position to succeed in the XXI century.
MY TAKE ON IT:
It is a nice review of American presidency, but it seems to be leaving out of discussion historical development of the office and change in its relative power comparatively to Congress and Judiciary. It is missing the whole appearance in XX century of the new practically independent power that is, while under formal control of president, in reality become more than semi-independent and probably even the most powerful in in lives of regular people – Administrative state. However I find methodology of defining success or failure somewhat unequally divided into objective – decided by voters in election and subjective – decided by historians. The weakness of second part is in ideological makeup of historians who are bound to be big government supportive type just because it the subject of their profession, which is mainly studying actions of individuals in the office of president. I would like to see additional point of view of constitutional scholars discussing which president strengthened and which weakened constitutional foundation of republic.
The main idea of this book is to extend scientific information provided in previous book “Influence”, by adding the new dimension to the process of persuasion: timing. This new dimension changes process of influence from static to dynamic, looking at it from point of view of time dependent conditions both surrounding individuals and established internally in his/her mind. These include creation of “privileged moments” when individuals is highly susceptible to persuasion, taking control over individual’s narrow beam of attention, invoking associations supportive for ideas of persuasion, using human tendency to seek confirmation from others, and acting in sync with representative group to smooth down path to persuasion.
Part 1: PRE-SUASION: THE FRONTLOADING OF ATTENTION
- PRE-SUASION: An Introduction
The chapter starts with author’s reminiscence of attending multiple sales seminars to learn technics used by successful salespeople to convince people to buy their staff. The main take out from this experience was author’s understanding that these skills are quite effective and learnable. As example author provided the narrative about successful use of persuasion upon himself when he was convinced to teach MBA class even if it impeded with his previous plans. As it is typical for a good teacher, author provided a nice synopsis of this book.
- Privileged Moments
This chapter explicates the concept of privileged moments, identifiable points in time when an individual is particularly receptive to a communicator’s message. The chapter also presents and supports a fundamental thesis: the factor most likely to determine a person’s choice in a situation is often not the one that offers the most accurate or useful counsel; instead, it is the one that has been elevated in attention (and thereby in privilege) at the moment of decision.
- The Importance of Attention… Is Importance
This chapter explores and documents one central reason that channeled attention leads to pre-suasion: the human tendency to assign undue levels of importance to an idea as soon as one’s attention is turned to it. The chapter looks at the effects of channeled attention in three different arenas: effective online marketing efforts, positive consumer product reviews, and successful wartime propaganda campaigns.
- What’s Focal Is Causal
This chapter adds a second reason for why channeled attention leads to pre-suasion. In the same way that attentional focus leads to perceptions of importance, it also leads to perceptions of causality. If people see themselves giving special attention to some factor, they become more likely to think of it as a cause. The influence-related upshots of the “what’s focal is presumed causal” effect are examined in domains such as lottery number choices and false confessions in police interrogations.
- Commanders of Attention 1: The Attractors
If elevated attention provides pre-suasive leverage, are there any features of information that automatically invite such attention and therefore don’t even require a communicator’s special efforts? This chapter examines several of these naturally occurring commanders of attention: the sexual, the threatening, and the different.
- Commanders of Attention 2: The Magnetizers
Besides the advantages of drawing attention to a particular stimulus, there is considerable benefit to holding it there. The communicator who can fasten an audience’s focus onto the favorable elements of an argument raises the chance that the argument will go unchallenged by opposing points of view, which get locked out of the attentional environment as a consequence. This chapter covers certain kinds of information that combine initial pulling power with staying power: the self-relevant, the unfinished, and the mysterious.
Part 2: PROCESSES: THE ROLE OF ASSOCIATION
- The Primacy of Associations: I Link, Therefore I Think
Once attention has been channeled to a selected concept, what is it about the concept that leads to a shift in responding? All mental activity is composed of patterns of associations; and influence attempts, including pre-suasive ones, will be successful only to the extent that the associations they trigger are favorable to change. This chapter shows how both language and imagery can be used to produce desirable outcomes such as greater job performance, more positive personnel evaluations, and, in one especially noteworthy instance, the release of prisoners kidnapped by the Afghan Taliban.
- Persuasive Geographies: All the Right Places, All the Right Traces
There is geography of influence. Just as words and images can prompt certain associations favorable to change, so can places. Thus, it becomes possible to send us in desired directions by locating to physical and psychological environments prefit with cues associated with our relevant goals. It’s also possible for influencers to achieve their goals by shifting others to environments with supportive cues. For instance, young women do better on science, math, and leadership tasks if assigned to rooms with cues (photos, for example) of women known to have mastered the tasks.
- The Mechanics of Pre-Suasion: Causes, Constraints, and Corrective
A communicator pre-suades by focusing recipients initially on concepts that are aligned associatively with the information yet to be delivered, but by what mechanism? The answer involves an underappreciated characteristic of mental activity: its elements don’t just fire when ready they fire when readied. This chapter examines this mechanism’s operation in such varied phenomena as how advertising imagery works, how infants can be pre-suaded toward helpfulness, and how opiate drug addicts can be pre-suaded into performing an important therapeutic activity that none would consent to otherwise.
BEST PRACTICES: THE OPTIMIZATION OF PRE-SUASION
- Six Main Roads to Change: Broad Boulevards as Smart Shortcuts
On which specific concepts should an audience’s attention be focused for the greatest pre-suasive effect? Attention should be channeled to one or another of the universal principles of influence treated in my earlier book, Influence: reciprocity, liking, authority, social proof, scarcity, and consistency. There is good reason for their prevalence and success, for these are the principles that typically steer people in the fight direction when they are deciding what to do.
- Unity 1: Being Together
This chapter reveals an additional (seventh) universal principle of influence: unity. There is a certain type of unity-of identity-that best characterizes a “We” relationship and that, if pre-suasively raised to consciousness, leads to more acceptance, cooperation, liking, help, trust, and, consequently, assent. The chapter describes the first of two main ways to build “We” relationships: by presenting cues of genetic commonality associated with family and place.
- Unity 2: Acting Together
Besides the unitizing effect of being together in the same genealogy or geography, “We” relationships can result from acting together synchronously or collaboratively. When people act in unitary ways, they become unitized; and when such activity is arranged pre-suasively, it produces mutual liking and support. This chapter provides illustrations in the forms of greater helping among strangers, cooperation among teammates, self-sacrifice among four-year-olds, friendship among schoolchildren, love among college students, and loyalty between consumers and brands.
- Ethical Use: A Pre-Pre-Suasive Consideration
Those using a pre-suasive approach must decide what to present immediately before their message. But they also have to make an even earlier decision: whether, on ethical grounds, to employ such an approach. Often, communicators from commercial organizations place profit above ethics in their appeals. Thus, there is reason to worry that the pre-suasive practices described in this book will be used unethically. However, this chapter argues against unethical use, offering data from studies indicating that such tactics undermine organizational profits in three potent ways.
- Post-Suasion: Aftereffects
Pre-suaders want to do more than create temporary changes via momentary shifts in attention; they want to make those changes durable. Accordingly, this chapter provides the behavioral science evidence for two kinds of procedures that increase the likelihood that changes generated initially will take root and last well beyond pre-suasive moments.
MY TAKE ON IT:
It’s a very good, very professional, and well supported by data analysis of the art of persuasion. The one general problem with it is that human beings are learning creatures and the very fact of discovering and formalizing tools of persuasion makes them less and less effective when more and more people learn about them and develop countermeasures. So for the practitioner of art of persuasion it is a good methodological toolset until its specific tools become common knowledge. On the defensive side of persuasion game it is not less valuable providing access to this knowledge while its methods are still very potent. It is somewhat similar to eternal straggle between viruses and antibodies with scientific psychological research being kind of vaccination against being manipulated by other people. On these terms this book is a great set of multifarious vaccine protecting against a number of widely circulating viruses.