Category Archives: Book review

Platform Capitalism: The New Economy of the Future?

My latest article, just published on Impakter Magazine:

BOOK REVIEW: PLATFORM CAPITALISM BY NICK SRNICEK, PUBLISHED BY POLITY (DECEMBER 2016) 120 PAGES

Platform Capitalism

Platform capitalism is the latest buzzword, replacing what used to be called “eco-systems”. It is also sometimes confused with the “gig economy” or the “sharing economy”, enthusiastically embraced by politicians as the answer to the Great Recession.

Uber, AirBnB, TaskRabbit and the like are viewed as saviors, providing jobs to those who wouldn’t have any or rounding off the pay of those who make too little. Their apps create a digital space where service providers and users meet; the needs of the latter are satisfied by the former while the app owners take a fair percentage off every transaction.

THE BLESSED AGE OF POST-CAPITALISM?

Technology enthusiasts see platform capitalism, created by the digital revolution, as a benign form of capitalism ushering in a new blessed age where people come into their own, workers find instant demand for their services and consumers get what they want at the tap of a button on their smartphone.

Before we go on, let’s get one piece of semantics out of the way: Platform capitalism should not be confused with the “sharing economy” (insofar as it exists at all). Platform capitalism has nothing to do with “sharing” in the sense of an exchange of goods or services at no cost to those engaged in the exchange. Platform capitalism is capitalism pure and simple: You pay for the goods and services you get, nothing is free – even if transaction costs tend to be lower online. Lower but still substantial: Uber, for example, creams off 25 percent of every taxi ride. The difference is that it’s not done through an exchange of cash in the real world, it is done digitally.

And, according to the proponents of platform capitalism, there is an added advantage: The middleman is cut out, costs to users are thus automatically reduced. This is the capitalism of the future, they enthuse. Thanks to the digital revolution, we are into the age of “post-capitalism”.

Not true, argue the critics: The basic exploitative nature of capitalism has not changed. Middlemen are replaced by new gatekeepers. “Many of the old middlemen and retailers disappear but only to be replaced by much more powerful gatekeepers,” complained one disgruntled German blogger.

Is platform capitalism heralding a bright new future or is it just the latest form of exploitative capitalism?

Read the rest on Impakter, click here.

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Filed under Book review, Digital Revolution, Economics, non-fiction, politics, Startups, Tech

American Leadership at Risk – How to Win it Back

Another one of my articles just published on Impakter magazine:

AMERICAN LEADERSHIP AT RISK – AND HOW TO WIN IT BACK

BOOK REVIEW “BUILDING THE NEW AMERICAN ECONOMY: SMART, FAIR, AND SUSTAINABLE” BY JEFFREY D. SACHS (AUTHOR), BERNIE SANDERS (FOREWORD) COLUMBIA UNIVERSITY PRESS, FEBRUARY 7, 2017

When Professor Sachs, one of the world’s most influential economists, wrote the book I’m reviewing here, we lived in a simpler, more innocent world, full of hope for a better future, particularly after the success of the 2015 Paris Climate Agreement, in large part a result of President Obama’s efforts.

America was firmly seated in the global leadership role it had occupied since World War II and as recently as last summer, it looked like nothing could upend it. The most recent “soft power” wins included the opening with Cuba and the deal with Iran to neuter its nuclear power – soft power wins that came on top of a long series of similar victories since 1945, starting with the generous Marshall Plan that resuscitated Europe from the ashes of war.

It may come as a surprise to many Americans, but it is this soft power, much more than its military power, that has ensured American leadership, turning it into a global moral compass, effectively the “land of dreams”.

Incidentally, the American military is well aware of this soft power, as evidenced in a recent letter signed by over 120 retired generals and admirals calling on Congress not to slash funds for diplomacy and foreign aid (as called for in Trump’s proposed budget), noting that “The State Department, USAID, Millennium Challenge Corporation, Peace Corps and other development agencies are critical to preventing conflict and reducing the need to put our men and women in uniform in harm’s way.”

Sachs’ book, Building the New American Economy: Smart, Fair, and Sustainable, was intended as a roadmap for America to continue to lead the world. He had worked on Bernie Sanders’ campaign in 2016 and clearly meant this book to guide a new Sanders administration – for Professor Sachs, as he insisted in a recent interview discussing his book, sees himself as a “progressive”. And barring Sanders, no doubt he expected to see Clinton in the White House.

But that was not to be. Some sixty million Americans, many without a college degree and who felt by-passed by “globalization” and betrayed by a “blinkered elite”, voted in a man that is likely to upend America’s global leadership by systematically cutting everything that sustained America’s soft power: foreign aid and diplomacy; the environment and clean energy; support to science, health and the arts;  immigrants and trade.

As soon as Trump signed his “Energy Independence” executive order on March 28 rolling back Obama’s Clean Energy Plan, China stepped forward, claiming the climate leadership role. And this came on top of the Davos meeting earlier this year, where, as Sachs put it, “Chinese President Xi Jinping offered a stirring defense of globalization and international responsibility.” Indeed, Chinese leadership is the biggest story that came out of Davos this year.

Is there anything that can be done to win back the moral high ground and global leadership for America? Professor Sachs’ book shows us how.

WHY WE SHOULD LISTEN TO PROFESSOR SACHS

Jeffrey D. Sachs, born in 1954 and raised in a suburb of Detroit, Michigan, is today Professor of Sustainable Development and Professor of Health Policy and Management at Columbia University as well as Director of Columbia’s Center for Sustainable Development and of the UN Sustainable Development Solutions Network (SDSN). Sachs started early accumulating firsts. He was one of the youngest ever to achieve tenure at Harvard University, becoming a full professor of economics in 1983 when he was just 28.

Over the next two decades, he was one of the few economists willing to leave the safety of Academia’s white tower and step out in the real world, with the risk of getting burned.

IN THIS PHOTO: JEFFREY SACHS AT THE UN (2009) –  PHOTO CREDIT: JAVAMAN200

To read the rest, click here. This is a book I really enjoyed and it was also extremely interesting to dig into Professor Sachs’ life for this review. A highly recommended read

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Unchain America

Here’s my latest book review, just published on Impakter. This book is brilliant, a must read!

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BOOK REVIEW: “CAPTURED: THE CORPORATE INFILTRATION OF AMERICAN DEMOCRACY” BY SHELDON WHITEHOUSE (AUTHOR) AND MELANIE WACHTELL STINNETT (CONTRIBUTOR) PUBLISHED 21 FEBRUARY 2017, NEW PRESS, 272 PAGES

Captured Sheldon Whitehouse

American democracy is in deep trouble, chained down by corporate power. This, in a nutshell, is the argument made by Senator Sheldon Whitehouse in his just published book, Captured: The Corporate Infiltration of American Democracy. He wrote the book, he says, in the hope of waking up his fellow American citizens to the risk they are running. To free themselves from the shackles of Big Business, they need to know exactly who they are fighting.

As I watched Trump give his “America First” inaugural speech, I knew something was deeply wrong with America. His speech signaled America’s abandonment of world leadership and rejection of globalization, a stunning paradigm shift. Since World War II, no American President had ever said anything like this. It chilled me and in fact, it sent a chill around the world among those who counted on America, particularly NATO countries, while it opened an unexpected door of opportunity for the competing powers of China and Russia. Would the 21st century belong to them? Suddenly, it looks like it.

How did we get here? This is the book that provides the key to understanding how we got there and why.

To read the rest, click here.

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SILICON VALLEY: WHAT IT TAKES TO DO STARTUPS – Book Review

Here’s another one of my articles published today on Impakter:



SILICON VALLEY: WHAT IT TAKES TO DO STARTUPS

Book Review: Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley by Antonio Garcìa Martinez (HarperCollins, 2016, 528 pages)

Chaos Monkeys Book Cover

Silicon Valley continues to be hot news in the age of Trump and anti-globalization and it should come as no surprise that a clever book about it by someone in the know, loaded with revelatory insights on how it really works, was going to be a sure-fire hit. And that is exactly what happened when Antonio García Martinez’s half memoir-half prescriptive tech guidebook came out last year on 28 June 2016, becoming an instant “New York Times bestseller”. Considered an “irreverent exposé of life inside the tech bubble”, all the major book reviewers rushed in with praise, from the New York Times’ Jonathan E. Knee (“an irresistible and indispensable 360-degree guide to the new technology establishment”) to Bloomberg’s Ellen Huet (“dives into the unburnished, day-to-day realities: the frantic pivots, the enthusiastic ass-kissing, the excruciating internal politics”).

In short, in just six months, “Chaos Monkeys” has become the most popular and widely read book about Silicon Valley. I was curious to find out whether it merited its sudden glory. I uploaded it to my Kindle (disclosure: living far from bookstores, I am a fan of e-books) and I spent a couple of pleasant days enjoying the read. And I soon discovered that the best passages, literally pearls in the text, had been highlighted hundreds of time by enthusiastic fans. In fact, Amazon in its “about the book” section informs you that (at the time of my reading) 3,769 passages had been highlighted 122,000 times (ah, the joys of Big Data).

It is a clever book with a clever title, and a great read. In case you’re wondering about the title, it comes from the name given to the software procedure used to test the stability and resilience of online services/websites – and this neatly expresses the main message of the book: That tech entrepreneurs are society’s chaos monkeys, out to disrupt the way we live, from photo-sharing (Instagram), dating (Tinder) and movie viewing (Netflix) to transport (Uber), lodging (AirBnB) and space travel (SpaceX).

Unquestionably, the author’s persona was as much part of the excitement as his bracing writing style. Described as an “industry provocateur” on his Amazon book description page, he has lived up to his reputation and become something of an industry guru: today, whenever big news or scandals roil Silicon Valley, journalists rush to ask him his opinion.

 

Garcìa Martinez started his working life as a strategist for Goldman Sachs, survived three years and surprised everyone by abandoning New York for the West Coast. After learning the ropes at an IT advertising outfit called Adchemy, he launched his own start-up AdGrok with a couple of engineering pals (called “the boys” in his book). Ten months later, after raising some venture capital and before even making AdGrok operational, he sold it to Twitter for $5 million. However, it was not an unmitigated success; his team broke up, “the boys” went to work for Twitter to develop AdGrok while he accepted a more lucrative position at Facebook as product manager. Tasked with leveraging Facebook’s user data to make its advertising more effective and fix its monetization problem, he was outcompeted by a colleague and fired – the circumstances of his firing make for fascinating reading.

The description of what Facebook is like, what happened there and why he eventually left and landed an advisory position at Twitter is certainly one of the more interesting parts of the book – anyone thinking of joining Facebook should read it very carefully, drawing lessons from it.

The rest on Impakter, to read it, click here.

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Filed under Book review, Digital Revolution, Publishing, Startups, Tech, Uncategorized

Death of the Euro: Thinking the Unthinkable

Impakter Magazine just published my latest article, here it is:

BOOK REVIEW “THE EURO: HOW A COMMON CURRENCY THREATENS THE FUTURE OF EUROPE” BY JOSEPH. E. STIGLITZ (PUBLISHED BY W.W. NORTON & CO, AUGUST 16, 2016)

Nobel laureate Joseph Stiglitz’s latest literary effort, a new book about the travails of the Euro and Europe, published in August with the apt title “The Euro: How a Common Currency Threatens the Future of Europe” couldn’t land in the muddy European political waters at a more appropriate time.

The summer of 2016 was a turning point for the so-called “European Project” – Europe’s long-run attempt to build a United States of Europe that began with the 1957 Treaty of Rome setting up the European Economic Community (EEC) with six founding members (Germany, France, Italy, Belgium, the Netherlands and Luxemburg), and continued in 1993, with the Maastricht Treaty, the European Union (EU) with (up to now) 28 member countries.

 

Problems have piled up this summer, relentlessly.

The opening salvo came in June with the UK referendum that unexpectedly led to “Brexit”, the decision to leave the European Union with 17.4 million Brits voting in favor. For the first time since its foundation, the EU is expected not to expand but to contract, down to 27 members – probably by 2019, when UK exit negotiations will be completed.

 

The most recent problem came in October with another referendum, this time in Hungary, calling on the population to disregard EU policies on refugees and reject quota obligation to accommodate asylum seekers. The referendum did not break the 50% threshold and the result was therefore declared illegal, but it did demonstrate that once again, a hefty minority, 3.6 million Hungarians (43% of voters), supported their government’s continuing opposition to Brussels.

 
Against this background, Joseph Stiglitz’s book has special resonance.
 
As he convincingly argues, the Euro was supposed to bring the European project forward but it has done nothing of the kind – if anything, the European Project has suffered setbacks just as much outside as within the countries of the Eurozone, the 19 EU members who use the Euro as a common currency. Incidentally, this is not a minor currency: The 19 European countries together account for roughly 14 percent of world GNP, making it the third largest economy in the world, after the United States (20 percent) and China (18 percent).
 
Do not delude yourself into thinking this is not important for the rest of the world: should the Euro collapse, the shock would shake the whole world.
 
It could even start another Great Depression.

A SLOW DEATH

Stiglitz minces no words in roundly chastising European leaders for “muddling through” a succession of Euro crises, ever since the first Greek debt scandal broke out in 2010. The book is a convincing diagnosis of what went wrong and why successive “bailouts” of Greece (three so far) have failed miserably, leaving the country six years later with an inexorably rising debt and a Gross Domestic Product diminished by a quarter, while the exceptionally high unemployment (a mind-boggling 50% for the young) won’t budge – really as bad as a war. Stiglitz’ detailed description of the Greek case is harrowing. A must read for anyone who hasn’t followed the drama closely.

And he is equally convincing in arguing that Ireland, often promoted (mostly by Germans) as the “poster child” of the success of Europe’s monetary and austerity policies is no such thing. EU-imposed austerity measures “helped ensure that Ireland’s unemployment rate remained in double digits for five years, until the beginning of 2015, causing untold suffering for the Irish people and a world of lost opportunities that can never be regained.”

Tough words that apply equally well to the other “crisis countries” of the Eurozone. For example, Portugal, also promoted by the IMF as a “success”, is far from that: The facts are that “the government might be borrowing with more ease, but the Portuguese people never experienced a real recovery.” Indeed, across Europe, excessive reliance on austerity and monetary policy “has resulted in even greater inequality: the big winners are the wealthy, who own stocks and other assets […]; the big losers are the elderly who put their money in government bonds, only to see the interest rates generated virtually disappear.”

 

The reason for such a deplorable state of affairs?  

First, a misplaced belief in what another famous economist, Paul Krugman, calls the “confidence fairy”: the idea that with austerity and a balanced budget, business confidence will be restored, which overlooks the simple fact that when consumer demand is depressed, business has no incentive to invest. In a recession, the confidence fairy, as Krugman says, becomes a zombie.

 

To read the rest, click here

NOTE TO MY READERS: Stiglitz’s advice on how to fix the Euro is truly excellent, and I sincerely hope our political leaders will read this book and act on it. I’ve tried to focus on the policy measures that are really doable among the many ideas Stiglitz presents. Eminently practical, they would take VERY LITTLE EFFORT… if only Germany would stop focusing on stupid austerity policies that are destroying Europe!

Go over to Impakter to read about those policy measures and tell me what you think!

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Filed under Book review, Economics, European Union, politics, Uncategorized