book reviews

He criticises the US government’s than examining the personality types unheard-of access to a time-sharing stimulus spending as far too small of these exceptional individuals, he computer terminal in 1968 and (about a quarter of what he thinks looks at the environment in which spent every spare moment honing is needed). As in Sweden in the they grew up. Gladwell’s thesis his programming skills. early 1990s, the US government is that demographic, social, and One of the flaws in Gladwell’s must also recapitalise the banks. even ancestral factors have greater approach is that he cherry picks Banks will need to be relieved of explaining power than individual anecdotes that suit his thesis and their toxic assets on the condition personality traits when trying to then generalises them into pseudo- that they resume lending. Finally, account for success. universal laws. Thus the shriveled but still vital shadow Gladwell’s book is from the Beatles/Gates banking system must be subject to written in his typical examples he posits the the same regulatory oversight as free-wheeling style, heavy ‘10,000 hour rule.’ There traditional banks. on anecdote and packed is no discussion of bands The Return of Depression Economics with fascinating personal that practised 10,000 is a spirited book, enjoyable and stories. It touches on some hours and failed to make instructive. In fewer than 200 pages, important themes such as it big or the mega-bands Krugman races through the sorry determinism versus free that changed the musical history of the major economic crises will and the debt we owe landscape without ever of the last 20 years. He offers very to those who came before putting in the requisite general advice on the next steps to us. In the current climate 10,000 hours. recovery but, I suppose, there is of economic uncertainty, many The anecdotes continue with always his column in the New York readers will relate to the idea that the story of Robert Oppenheimer Times. we are often at the mercy of forces who was a child prodigy, studied beyond our control. The book also at Harvard and Cambridge, and Reviewed by Malcolm provides a healthy antidote to the headed the Manhattan Project. His self-help mantra of the supremacy of life story is contrasted with that of Roberts individual desire and effort. Gladwell Chris Langan who had an IQ of 195, also appears dedicated to exploding worked a series of low paid labouring the myth that contemporary jobs, and ended up retiring to the : The Story of American society is a meritocracy in Missouri countryside to tend horses. Success which any talented individual can Gladwell explains the differing by Malcolm Gladwell rise to the top. He argues against fortunes of these two geniuses in the cult of the individual genius terms of family background and Little, Brown and Company, who makes it on his own through emotional intelligence. New York, 2008 his or her own exceptional powers This exposes another shortcoming US$27.99, 320 pp of intelligence and insight. in Outliers. Once we look behind ISBN 9780316017923 In his characteristically breezy style, the rollicking narrative, Gladwell’s Gladwell rattles through a number of conclusions often don’t go far igh intelligence and examples in which external factors beyond commonsense. It’s not extraordinary achievement largely determine whether or not groundbreaking to assert that Hare endlessly fascinating an individual succeeds. He cites the being good with people and having subjects. We’d all like to know example of Canadian junior hockey supportive and educated parents is the secret behind stratospherically players born early in the year and who going to help you make the most of successful individuals so we can are consequently taller and stronger your intellectual gifts. emulate their accomplishments. than most other children in their age Gladwell also looks at the role Outliers sets out to explain the cohort. They are more likely to be of ancestry in the way we act. The secret of success—but it is far from chosen for rep teams, receive extra outlier here is the large number of successful in doing so. coaching and practice, and become violent family that persisted To solve the puzzle of high pro hockey players. He tells the story in southeast Kentucky. Some achievement, Gladwell takes a of the Beatles who succeeded because lasted more than 100 years and number of examples of exceptional they cut their teeth playing eight- ended only in the 1930s. Gladwell people and seeks to explain why hour sets for days on end at dingy concludes that residents in that area these people reached great heights in strip clubs in Hamburg, and of Bill are more inclined to because their chosen professions. But rather Gates who succeeded because he had their Scottish-Irish descendents

Policy • Vol. 25 No. 2 • Winter 2009 59 book reviews

came from marginally fertile lands taught us to improve our decision in Joseph Schumpeter’s Capitalism, where there was a strong culture making by knowing when to trust Socialism and Democracy: ‘A system— of honour. He cites studies that our instincts. Outliers invites us to any system economic or other—that indicate when insulted, modern better understand the origins of at every given point of time fully day Southerners are more likely success, and to be more successful utilizes its possibilities to the best to react aggressively than their ourselves. However, the message of advantage may yet in the long run Northern contemporaries. Exactly the book is that you need to have the be inferior to a system that does so how this chapter relates to the right ancestry, the right parents, and at no given point of time, because ‘Story of Success’ is unclear. Again be born in the right demographic to the latter’s failure to do so may be we get the feeling that Gladwell is succeed—factors that are beyond our a condition for the level or speed cherry picking studies and experts control. If you’re looking for an in- of long run performance.’ Patents whose views support his thesis. He depth understanding of the origins of or copyright are examples. They also has a liking for the ‘one factor’ genius or a self-help manual to make are legal instruments that create explanation. yourself more successful, Outliers is inefficiencies by preventing use of Gladwell’s inclination for not the book for you. Nevertheless intellectual property by those not oversimplifying a complex problem it’s a ripping yarn full of fascinating owning the patent or copyright. is also evident in the section on anecdotes and interesting insights. airline crashes. His retelling of However, they provide innovators the crash of a Korean airliner at Reviewed by Ross Farrelly and entrepreneurs with incentives Guam and a Colombian airliner to create intellectual property with at New York make for some very greater long run benefits for society. compelling reading. Gladwell is at In Defense of Monopoly: The authors argue that monopolies his best as he retells the tragic story How Market Power Fosters can have similar benefits. of these disasters, revealing the black Creative Production The monopolies that the authors box transcript line by line. However, By Richard B McKenzie and are trying to defend (from overzealous his one factor explanation—that enforcers of anti-trust policy) are firms Dwight R Lee these planes crashed because the that are more or less victims of their aircrews grew up in cultures with Press own success. They are not talking a highly developed deference to 2008 about government engineered and authority—is very thin. Almost as US$40, 320pp maintained monopolies. Rather they thin as his explanation that South ISBN 0472116150 are referring to ‘privately engineered Asians are good at maths because monopolies’ that do what they do their ancestors had to work long and his book is very ambitious. so well that they achieve market hard to extract a living from their At first glance, one might shares of monopoly proportions. meagre rice paddies. expect, given its provocative Microsoft is the classic example, If Gladwell wants to propose a T title, that this book would be another Google another. thesis that will be taken seriously, assault on free markets, and that the In making this argument, the he needs to be more thorough. If he authors deserve a place next to the simply wishes to relate good stories authors take on the economic nationalisers and protectionists who and point out possible themes, we establishment and the traditional are suddenly back in fashion. It are left with the impression that he model of monopoly that is often isn’t really saying much more than would be a mistake to do so. Richard compared to the idealised state what common sense would suggest: McKenzie and Dwight Lee are much of perfect competition taught that hard work contributes to more concerned with the best way to virtually all undergraduate success; that our ancestry influences to maximise a society’s welfare— economics students. They argue our behaviour; and that being born they argue that in some cases, the that this comparison exaggerates the at the right time in history can help long-term benefits of monopoly damage that real world monopolies us succeed. and monopsony can exceed the do. Moreover, perfectly competitive Gladwell’s books, including short-term deadweight losses that markets do not provide, for example, Outliers, could be categorised in they create. In other words they sufficient incentive for innovators; the self-help genre. We were invited argue that we should, with certain why bother innovating if markets to read to better caveats, let monopolies be free to be are perfectly efficient? McKenzie understand change and to start our monopolies. and Lee argue that the perfect own ‘positive epidemics.’ Blink The book is inspired by a passage competition model is unachievable

60 Policy • Vol. 25 No. 2 • Winter 2009