Suggested Readings (#268)

In this podcast episode, we discuss a variety of readings that are definitely outside of the accounting area. Key points made are noted below.

Please keep in mind that there is absolutely nothing about accounting in this episode. Instead, my focus is on just giving you a broad knowledge of what’s going on in the world today. In the earlier episode, one of my recommendations was to read Business Week. That is no longer the case. Though I liked the magazine, they had a horrible time delivering it, where I was getting it maybe one week in three.

The Economist

So, in looking for a replacement, I decided to try the Economist, which has turned into my main reading source. I read probably three-quarters of it every week. It’s absolutely loaded with news about business and politics from all over the world, and it references research papers all the time, so you’re also getting the latest thinking on scientific research. They also run a special in the middle of the magazine that hits a broad range of topics in more detail.

Which is, that I score the Economist a 9 on a scale of 1 to 10. This is being picky, but I have two small issues with it. One is that, while they do produce some really amazing charts that must have taken a lot of time to compile, every now and then there’s a real head scratcher. I’m probably just stupid, but sometimes I have no idea what they’re talking about. Maybe the chart description needs to improve, or maybe they should just run their charts past the janitor before putting them in the magazine – just to see if a normal person understands them.

My second point is that their book review section at the back seems like a lot of wasted space. Either you’re a news magazine or you’re not, and sticking a half-dozen pages of book reviews at the end doesn’t seem like it’s worth the paper. More on that topic in a moment.

Foreign Affairs Magazine

My second recommendation is Foreign Affairs magazine, which is put out by the Council on Foreign Relations. This magazine comes out every other month, and I get it downloaded automatically to my Kindle. Foreign Affairs does exactly what the name implies. They ask experts to talk about various foreign affairs issues. Sometimes the topics are all over the place, and sometimes they focus on one theme, like the rise of China. The articles are very well-informed, and they come from major academics or senior people in the government.

If there’s a problem with Foreign Affairs, it’s that you can get so depressed from reading it. The commentary is generally from the perspective of what the United States could do better with its foreign policy decisions, and there’s a lot that can be done better. Nonetheless, if you want some really good, well-considered opinions about what’s going on in the world and how to make it better, Foreign Affairs magazine is a good place to start.

However – Foreign Affairs is not just about the essays. It also contains a massive listing of book reviews at the back of each edition. Unlike the Economist, the Foreign Affairs editors are taking the position that the magazine itself can’t possibly cover all the topics that are out there, so here are all these extra books you might want to read.

Specific Book Recommendations

Sometimes, it seems like I’m just trying to survive the essays in order to get to the book reviews –because this is my number one source for books to read. I buy at least a dozen books every year just based on their book recommendations. And – they’re all over the place. As a few examples of recent purchases, I bought Pandemic 1918, about the Spanish flu, Where the Party Rules, about the Chinese communist party, Tunisia – An Arab Anomaly, which is pretty much explained by the title, Brave New Arctic, about global warming, Putinomics, about the economics of staying in power in Russia, and Saudi, Inc., about how Saudi Arabia is run as a business. In short, Foreign Affairs does an incredibly good job of sorting through book releases and recommending some really fine nonfiction.

How to Search for Lessons in What You Read

I have one further recommendation, which builds on those Foreign Affairs book listings, which is to search around within a book for additional points that the author was not necessarily trying to make as his or her main point. By doing so, I find that I’m really paying attention. That’s a pretty vague recommendation, so here are a couple of examples.

One Foreign Affairs recommendation was The Saboteur, by Paul Kix, which was about the exploits of a French Resistance fighter during World War II. The author’s main point was to just follow along behind the resistance fighter while he did all the usual things, like blowing up railroad tracks. But then he also mentioned, at different places in the book, that 2% of the French population were in the resistance, while 20% of the population collaborated with the Nazi occupiers. And this is in France, arguably the proudest country on earth. Makes you wonder about how easy it is to subvert a population.

Or here’s another one. In The Fate of Rome, by Kyle Harper, the author’s main point is that some really massive plagues swept through the Roman empire and wiped out millions. But interspersed between the points being made is that several times over the life of the Empire, a massive volcanic eruption did exactly the same thing. They ejected enough dust into the atmosphere to lower crop yields, which starved an incredible number of people. And today, we might be about to stop a pandemic – after all, we have the World Health Organization and the Centers for Disease Control – but how do you protect subsistence farmers from the after-effects of a major eruption? I’m not sure we can.

And my final point – which is a long one - comes from a book called Where the Party Rules, by Daniel Koss. It’s a very difficult read, but it’s basically about anomalies in membership levels in the communist party across China. Which sounds dull – and it really is dull. But, the author made this incredibly interesting point that I’ve started to see elsewhere quite a bit. His point was that the Chinese communist party is much more highly represented as a percentage of the population in areas that were under the control of the Japanese army during World War II. Initially, this was because the communist party was active behind enemy lines during that time, and fought back against the Japanese pretty hard – and that is something that the local population doesn’t forget. So they kept on supporting the communist party for years afterwards. And this is where it gets interesting, because he calculated that the statistical half-life of this anomaly appears likely to last for 80 years. Which implies that the impact of supporting the local population will have a statistically significant impact on communist party membership for a total of 160 years.

In short, the lesson to be learned here is that memories are long. Really long. Knowledge gets handed down from one generation to the next, and it has an impact on decision making for far longer than you would imagine is possible.

This same effect comes up in Tunisia: An Arab Anomaly, by Safwan Masri. It’s one of the best books I’ve read in the past ten years. It’s all about what makes Tunisia a success when most of the Middle East has been comprehensively screwed up for decades. The author points out that Tunisia has mandated a secular education for everyone since the 1950s, where there’s an emphasis on critical thinking. Everywhere else in the Middle East, there’s a much higher infusion of religion into the educational system, which results in lots of people having a narrow view of what is right and what is wrong.

So in Tunisia’s case, because of the educational system, which results in a more broad-minded population, they’ve been able to construct an economy and a political system that just functions better. This does not mean that Tunisia is a paradise – they have all kinds of problems – but they at least have a chance of success. So how does this tie into my earlier point about long-term effects? The author specifically points out that success has been based on an educational system that’s been in place for seven decades. It takes that long to develop multiple generations of a population that aren’t going to go tearing off in a religious fundamentalist direction.

And a third supporting source is an article that just came out in the Economist, about voting patterns in southwestern Germany – right where I went to school during a semester in high school, by the way. It turns out that this area has consistently voted in the most conservative manner out of all parts of Germany for a very long time, and the reason appears to be that the population there has experienced the least population turnover in the country. People from elsewhere just don’t go there to live. In essence, it means that voting patterns stay the same across multiple generations. So once again, memories run far longer through a population than you would think is humanly possible.

This issue does suggest a foreign policy direction for the United States, which is that it doesn’t make a whole lot of sense to introduce democracy into a country and assume that it will take root right away. You need to keep up the educational process for fifty years, a hundred years, who knows? Can the United States realistically do that? Probably not. But what it can do, and has been doing for a long time, is maintain the best possible university system, and encourage foreigners to come here and learn about – everything. How Americans think, what we value, and how the system works. If they take that knowledge back home and use it to make positive changes – then, great.

Which means that the United States needs to massively support its system of higher education, and also offer visas to pretty much anyone who wants to come here to get an education. The long-term effects could be quite acceptable, and this is an approach that’s easy to support over the long term.

So how does all of this relate back to accounting? It doesn’t, of course. But by reading the Economist and Foreign Affairs, and digging through the Foreign Affairs book recommendations, you can develop a really deep view of how the world works – and being a more well-rounded person strikes me as being quite a good goal to shoot for.