THE DEATH OF THE BANKER

THE DECLINE AND FALL OF THE GREAT FINANCIAL DYNASTIES AND THE TRIUMPH OF THE SMALL INVESTOR

Three ad rem essays from National Book Award winner Chernow on the convulsive shift in the balance of monetary power (from commercial, investment, and merchant bankers to financial conglomerates) that has marked 20th-century capitalism. Drawing on research he did for The Warburgs (1993) and The House of Morgan (1990), Chernow offers an anecdotal primer on the factors that put paid to the pivotal, frequently dictatorial role once played by bankers in allocating capital throughout Europe and North America. In addressing, even mourning, the eclipse of the banking trade, he recalls the accomplishments of larger-than-life financiers (in particular, John Pierpont Morgan and Siegmund Warburg) who granted the credit required to open the American West, underwrote transcontinental railroads, masterminded acquisition campaigns decades before merger mania became a byword on Wall Street, guided fearful nations through market panics, and otherwise left their mark on the New World and Old. The author recounts how passage of the Glass-Steagall Act by Congress during the Great Depression brought the disruptive rigors of competition to the clubby, relationship-oriented world of banking. Chernow also documents the advances in communications technology and regulatory policy that put investment intelligence within reach of all comers; these latter developments led directly to the profusion of mutual funds, which manage the billions of dollars anted up by individual investors. While today's institutional avatars may be a more cautious, risk-averse breed than their colorful predecessors, that may be in part, the author suggests, because they are subject to the pitiless collective judgments of a global marketplace that puts precious little premium on living by one's wits. If Chernow provides no breakthrough perspectives to arrest the attention of professionals, he delivers a sound, accessible account of the forces shaping capital, credit, currency, and securities markets on the eve of a new millennium.

Pub Date: July 16, 1997

ISBN: 0-375-70037-4

Page Count: 144

Publisher: Vintage

Review Posted Online: May 20, 2010

Kirkus Reviews Issue: May 15, 1997

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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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