A tough-minded study that shows there’s gold in them there halls, but getting to it is a problem—or, an entrepreneur might...

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CLASS CLOWNS

HOW THE SMARTEST INVESTORS LOST BILLIONS IN EDUCATION

Why can’t Johnny make a buck in the school game? Perhaps because, though the potential earnings are huge, the barriers to entry are formidable, as a former investment banker and current business professor charts.

“Some of the most respected minds of our generation have invested many billions of dollars in for-profit education enterprises,” writes Knee (Professional Practice/Columbia Business School; The Accidental Investment Banker: Inside the Decade That Transformed Wall Street, 2006, etc.). “And, with surprising regularity, they have lost their shirts.” One of the four case studies is that of Chris Whittle, the media maven–turned–educational entrepreneur: “What is surprising, even shocking, is that for over twenty years, in the educational arena, Chris Whittle has been able to continue to separate sophisticated investors from their money despite a plethora of red flags that in any other context might be viewed as disqualifying.” Even so, Whittle’s venture into the educational market had a solid basis, if you consider that the sector amounts to something like $1.3 trillion, mostly funded from government sources. That explains why sullied investor Michael Milken turned to the education market with an enterprise that, it seems, failed to recognize what to Knee seems obvious: that some markets, especially higher education, are tough to crack, such that only one school, Stanford, has managed to join the world’s elite institutions in the last half-century. The author’s dissections of various sectors of the market, from textbook publishing to child care centers, point to a common lesson, namely that most of it does not respond to the traditional economics of scale. School governance tends to be intensely local, for instance, and thus “a major textbook publisher must produce literally hundreds of thousands of SKUs of its core products to respond to local requirements.” It’s a hard arena even for a giant to make a living in, much less smaller players, no matter how good and noble the intentions.

A tough-minded study that shows there’s gold in them there halls, but getting to it is a problem—or, an entrepreneur might say, a challenge.

Pub Date: Nov. 8, 2016

ISBN: 978-0-231-17928-7

Page Count: 288

Publisher: Columbia Univ.

Review Posted Online: Nov. 15, 2016

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Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our...

THINKING, FAST AND SLOW

A psychologist and Nobel Prize winner summarizes and synthesizes the recent decades of research on intuition and systematic thinking.

The author of several scholarly texts, Kahneman (Emeritus Psychology and Public Affairs/Princeton Univ.) now offers general readers not just the findings of psychological research but also a better understanding of how research questions arise and how scholars systematically frame and answer them. He begins with the distinction between System 1 and System 2 mental operations, the former referring to quick, automatic thought, the latter to more effortful, overt thinking. We rely heavily, writes, on System 1, resorting to the higher-energy System 2 only when we need or want to. Kahneman continually refers to System 2 as “lazy”: We don’t want to think rigorously about something. The author then explores the nuances of our two-system minds, showing how they perform in various situations. Psychological experiments have repeatedly revealed that our intuitions are generally wrong, that our assessments are based on biases and that our System 1 hates doubt and despises ambiguity. Kahneman largely avoids jargon; when he does use some (“heuristics,” for example), he argues that such terms really ought to join our everyday vocabulary. He reviews many fundamental concepts in psychology and statistics (regression to the mean, the narrative fallacy, the optimistic bias), showing how they relate to his overall concerns about how we think and why we make the decisions that we do. Some of the later chapters (dealing with risk-taking and statistics and probabilities) are denser than others (some readers may resent such demands on System 2!), but the passages that deal with the economic and political implications of the research are gripping.

Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our minds.

Pub Date: Nov. 1, 2011

ISBN: 978-0-374-27563-1

Page Count: 512

Publisher: Farrar, Straus and Giroux

Review Posted Online: Sept. 4, 2011

Kirkus Reviews Issue: Sept. 15, 2011

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A deftly argued case for a new kind of socialism that, while sure to inspire controversy, bears widespread discussion.

CAPITAL AND IDEOLOGY

A massive investigation of economic history in the service of proposing a political order to overcome inequality.

Readers who like their political manifestoes in manageable sizes, à la Common Sense or The Communist Manifesto, may be overwhelmed by the latest from famed French economist Piketty (Top Incomes in France in the Twentieth Century: Inequality and Redistribution, 1901-1998, 2014, etc.), but it’s a significant work. The author interrogates the principal forms of economic organization over time, from slavery to “non-European trifunctional societies,” Chinese-style communism, and “hypercapitalist” orders, in order to examine relative levels of inequality and its evolution. Each system is founded on an ideology, and “every ideology, no matter how extreme it may seem in its defense of inequality, expresses a certain idea of social justice.” In the present era, at least in the U.S., that idea of social justice would seem to be only that the big ones eat the little ones, the principal justification being that the wealthiest people became rich because they are “the most enterprising, deserving, and useful.” In fact, as Piketty demonstrates, there’s more to inequality than the mere “size of the income gap.” Contrary to hypercapitalist ideology and its defenders, the playing field is not level, the market is not self-regulating, and access is not evenly distributed. Against this, Piketty arrives at a proposed system that, among other things, would redistribute wealth across societies by heavy taxation, especially of inheritances, to create a “participatory socialism” in which power is widely shared and trade across nations is truly free. The word “socialism,” he allows, is a kind of Pandora’s box that can scare people off—and, he further acknowledges, “the Russian and Czech oligarchs who buy athletic teams and newspapers may not be the most savory characters, but the Soviet system was a nightmare and had to go.” Yet so, too, writes the author, is a capitalism that rewards so few at the expense of so many.

A deftly argued case for a new kind of socialism that, while sure to inspire controversy, bears widespread discussion.

Pub Date: March 10, 2020

ISBN: 978-0-674-98082-2

Page Count: 976

Publisher: Belknap/Harvard Univ.

Review Posted Online: Dec. 22, 2019

Kirkus Reviews Issue: Jan. 15, 2020

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