Futurists' Bookshop
Some of these titles are still available to purchase. To make an
enquiry, please email bookshop@nevillefreeman.com.
2001 Installment I
When Genius Failed - The rise and fall of Long
Term Capital Management
By Roger Lowenstein
Rebel Code - Linus Torvalds, Open Source, and the
war for the soul of software
By Glyn Moody
Six Nightmares - Real threats in a dangerous
world and how America can meet them
By Anthony Lake
America's Asian Alliances
By Robert Blackwill and Paul Dibb
Muslim Communities in Australia
By Abdullah Saeed and Shahram Akbarzadeh (eds)
Fast Food Nation - The dark side of the All-American
meal
By Eric Schlosser
2007: A Novel
By Robyn Williams
In Good Company - How social capital makes organisations
work
By Don Cohen and Laurence Prusak
 When
Genius Failed
The rise and fall of Long Term Capital Management
By Roger Lowenstein
ISBN: 037550317X
Publisher & date: Fourth Estate, Sept 2000
Format: Hardcover
Price: A$45.00
One of the great lessons from history,
which is being repeated even as this review is being written, is
that the actions of a few can have a hugely amplifying effect on
the lives and well being of many. This is nowhere more apparent
than in the casino end of the world economy - that part of world
markets where inconceivable amounts of money are shuffled around
purposively with considerable haste in the pursuit of speculative
profits. The somewhat arcane practice of arbitrage, where securities,
commodities or money itself are bought and sold simultaneously in
different markets, is often found inhabiting this nether world.
When Genius Failed is a gripping
yarn of a heady mix of arrogance and avarice and how a handful of
arbitrageurs almost triggered a Wall Street collapse in 1998. It
is a cautionary tale of our times in which the seduction of empirical
extrapolation sees far too much within its scientistic grasp. The
'physics envy' that would have some believe that all phenomena are
to some extent essentially knowable and predictable, is not only
alive and well in many arenas of the social sciences but especially
pervasive among economists. Hold the model, reality is wrong again!
In the case of Long Term Capital Management
(LTCM) those modelling reality, or at least developing the theories
upon which to base models, were no less than two Nobel laureate
economists, Robert C Merton and Myron S Scholes. Here were two academicians
who had spent their professional lifetimes studying the patterns
and volatilities of price changes in financial markets. Literally
inspired by 'discoveries in the physical sciences', the assumption
was made that while such price changes were random, over a sufficiently
long period they would follow a normal distribution. Furthermore,
'[if] the amount of the typical change - the "volatility" - were
known, they believed, the odds that a stock, bond or other asset
would rise or fall by some proportion over time could be derived'.
Two other assumptions were crucial to the logic of the models that
LTCM were to develop and use as the basis for the trading business.
First, the volatility of a security was constant and, second, it
was 'so constant that prices would trade in "continuous time" -
in other words without any jumps'.
It was models built on these assumptions
that the group of hedge fund traders assembled by John Meriwether,
under the name of Long Term Capital Management, would utilise as
the basis for their arbitrage business. Once a partner at Salomon
Brothers where he had earlier established a remarkably successful
bond arbitrage group, Meriwether included Merton and Scholes among
a handful of PhD-trained arbitrageurs invited to become partners
in LTCM. Within an extraordinarily short time of its establishment
in 1993, the new business had over $5 billion as a capital fund
at work as 'swap spreads', 'junk bonds', 'equity vols', and a host
of other derivative devices in an impressive array of markets. Then
came leveraging: by 1996, just three years after its establishment,
LTCM had an astounding $140 billion in assets, thirty times its
underlying capital, and a legion of fabulously wealthy partners.
They had achieved this position by 'sucking in' money from up and
down Wall Street:
Almost imperceptibly, the Street had bought into a massive faith
game, in which each bank had become knitted to its neighbour though
a web of contractual obligations requiring little or no down payment.
Behind the subtleties, complexities,
and, for many, the sheer mysteries of the actual nature of the financial
investment instruments which LTCM was using, the idea at the centre
of it all was deceptively simple. As Myron Scholes put it: 'What
we do is look around the world for investments that we think are,
because of our models, undervalued or overvalued. And then we hedge
out the risks of something we don't know, like a market factor.'
But then the cruelties of reality
hit. No matter how sophisticated the models were, no matter how
elegant their mathematical foundations, and no matter how the risks
of the investments were hedged, the models were only models. They
were but estimations of reality not descriptors or generators of
it, and they could be wrong - especially, as indeed happened at
LTCM, when they were applied beyond the specific domains for which
they were designed and created. By April 1998, not more than five
years after its establishment, the fate of LTCM changed dramatically.
Within a few more months, disaster overwhelmed it entirely. The
amplifying potential of the crash it was to endure was sufficient
to prompt no less than the Federal Reserve into goading a consortium
of Wall Street banks to buy up the company, and so avoid the nightmare
of a total financial meltdown, which it feared the collapse of LTCM
could easily trigger. Talk about concern about the 'butterfly effect'!
As this exciting yet sobering book
reveals, Roger Lowenstein's consummate skill is to transform a tale
of high rolling finance into a veritable three act thriller. The
personal as well as professional attributes of each of the dramatis
personae are penned in such detail that they enter and exit the
stage as live (and fallible) human beings. When Genius Failed
is the story of the failure of real human beings convinced that
it was indeed reality that had failed, not the models that they
had constructed to predict what it would do. BUY
Dr Richard Bawden
 Rebel
Code
Linus Torvalds, Open Source, and the war for the soul of software
By Glyn Moody
ISBN: 0713995203
Publisher & date: Allen Lane, Jan 2001
Format: Paperback
Price: A$24.05
Microsoft cited Linux as a competitor
at the Microsoft trial in 1998. At the time, Microsoft executives
did not actually consider Linux a real competitor. Today it is.
Linux, the flagship of the open source movement, is poised as the
operating system of the future - the choice for a new generation
of computers and electronic appliances. In fact, Linux looks so
strong that Microsoft is set to bow out of the operating system
market, shifting to the development of applications to run on top
of Linux. Passive recognition of this shift is evident in Microsoft's
.net strategy through which software users rent, rather than buy,
applications served through the web. So, what's so good about Linux?
First, price. Because it's open source
it's free! This is increasingly important in the application of
an operating system in basic electronic products such as toaster
- if the mechanics cost $50 it doesn't make sense to install a $200
operating system.
Second, compatibility. Linux works
with any computer - toasters for instance. Despite society's current
obsession with desktop computing, small gadgets will soon make up
the bulk of computerised products on the market. Traditionally,
Microsoft and Intel are aligned and work well together. But exclusivity
is expected to clash with the logic of open source development.
Third, as open source, Linux, is readily
tailored. Engineers anywhere can do anything with it to build value
on value.
In the world of software, Linux is
to Karl Marx what Microsoft is to Adam Smith. The development of
open source software has largely taken place in Europe, especially
Finland. Europe, it seems, is a better breeding ground for the development
of open source because altruism is more acceptable. In the US altruists
are either suspected communists or thought to be pursuing some ulterior
motive. That having been said, some smart cookies are starting to
investigate the broader lessons in open source for business through
meetings such as the GBN sponsored Berkeley
Roundtable on Open Source. Other than that, there is apparently
not much to do in Finland, other than punching a keyboard and drinking.
Does this signal the imminent arrival of open sauce?
Key concept: important book.
BUY
 Six
Nightmares
Real threats in a dangerous world and how America can meet them
By Anthony Lake
ISBN: 0316559768
Publisher & date: Little Brown, Nov 2000
Format: Hardcover
Price: A$75.00
Just weeks before the attacks on the
World Trade Centre and the Pentagon, GBN Chairman Peter Schwartz
selected and reviewed this book in the GBN BookClub along with the
CIA's Global Trends 2015 report, not knowing how soon such
nightmares would become a reality.
The horror of the terrorist acts that
occurred on September 11 have left us with a key question - will
the world soon be free of the threat of terrorist activity or is
this only the beginning of a new wave of terrorism?
The tension between preparing for
a new generation of terrorism while still maintaining security against
traditional threats is now clearly apparent. For instance, is cyber-terrorism
any more threatening than traditional terrorist activities that
are now e-nabled by new communication technologies? The security
game is certainly not getting any easier as efforts to combat terrorist
threats are complicated by the trend towards deregulation, open
borders and the dissolution of organisational boundaries.
Anthony Lake's book covers many of
the issues about the nature of terrorism today and in the future,
which are now discussed on a daily basis by media around the world.
Drawing on his experience as Bill Clinton's national security adviser,
Lake walks readers through this 'new' world of terrorism. With chapters
on 'New Tools for New Terrorists', 'eTerror, eCrime' and 'The Sixth
Nightmare: Washington DC' this book has an important contribution
to make to the discussion about the reality of terrorism in today's
world. BUY
 America's
Asian Alliances
By Robert Blackwill and Paul Dibb
ISBN: 0262522853
Publisher & date: MIT Press, Sept 2000
Format: Paperback
Price: A$44.95
The content of this book contributed
to conversation at the recent US-China
Roundtable Forum.
The Asia-Pacific faces an arc of potential
instability, from the divided Korean peninsula in Northeast Asia,
to the nuclear confrontation between India and Pakistan on the South
Asian subcontinent, to an unstable Indonesia in Southeast Asia.
The United States and its allies must also address the rise of Chinese
power, slow the spread of nuclear and high-tech conventional weapons,
maintain access to energy resources, and expand the world free trade
system.
In this book, nine distinguished US
and Australian strategists propose systematic and concrete prescriptions
for strengthening America's Asian alliances. These policy-driven
chapters address the roles that the US-Japan, US-South Korea, and
US-Australia alliances can play in advancing long-term harmony and
well-being in the region. BUY
 Muslim
Communities in Australia
By Abdullah Saeed and Shahram Akbarzadeh (eds)
ISBN: 0868405809
Publisher & date: UNSW Press, Sept 2001
Format: Paperback
Price: A$44.95
Hot topic, hot off the press. Muslim
Communities in Australia brings together the foremost scholars of
Islam and Muslim politics in Australia to consider the relationship
between Australian politics and society and Muslim Communities in
Australia. The book responds to such questions as:
-
How do national differences affect the assumed 'Muslim community'?
-
How do Muslim residents in Australia identify themselves?
-
How has the experience of migration affected their sense of
identity?
-
How has the Australian mainstream media portrayed Muslims in
Australia and how has this portrayal changed over the last 30
years?
By addressing such critical issues,
the book will present a well-rounded picture of the Muslim experience
in Australia and highlight key issues of concern for the Muslim
community. BUY
 Fast
Food Nation
The dark side of the All-American meal
By Eric Schlosser
ISBN: 0395977894
Publisher & date: Allen Lane, Jan 2001
Format: Paperback
Price: A$28.00
How many of us have not been surprised
by the physical proportions of some Americans? Obesity, anorexia
and other diet related ailments are big problems in the US; now
the US is exporting these problems to the rest of the world along
with American food and culture. In the past 15 years, the number
of fast food outlets in Australia has tripled; over the same period,
the incidence of obesity has also tripled. This is no coincidence.
The author's critique of the fast
food industry addresses three main areas. First, working conditions
in the fast food industry, particularly for those handling processed
meat. Monolith fast food companies have crushed the union movement
to make meatpacking one of the lowest paid and most dangerous jobs
in the US. Second, Schlosser has a deserved dig at the toxic nature
of the food flavouring industry. Third, and most importantly, he
slanders the general impact of fast food consumption on society.
Schlosser balances his critique with
the admission that fast food companies employ a lot of people -
often people who find it hard to get jobs in other areas of the
economy. In addition, Ronald and the Colonel provide very cheap
and 'tasty' meals. It does appear, though, that Americans are moving
away from junk food, as fast food sales have reached a plateau.
But in a recent interview, the author declared this book an important
warning for countries like Australia that are currently besieged
by the fast food industry, announcing there may still be time to
avoid some of the associated problems.
The book also considers the fast food
industry in corporate terms, noting that today it is one of the
most conservative industries, a far cry from the entrepreneurial
exploits of the industry pioneers. Schlosser jokes that these vanguards
would not even get a job in the industry today, which is probably
just as well, as they are probably busy seeking out a new revolution.
Could it be slow food? BUY
 2007:
A Novel
By Robyn Williams
ISBN: 0733614248
Publisher & date: Hodder Headline, July 2001
Format: Paperback
Price: $29.95
By April 2007, a myriad of natural
disasters are destroying the earth. Flocks of pelicans are closing
airports, a pod of whales sinks a submarine and herds of cows stop
traffic on freeways. Two scientists, Julian and Cyril, are summoned
to Washington for crisis talks. Julian's daughter and their dog
also come along and together, they try to bring order out of the
chaos and save the world.
Robyn Williams is a GBN Australia
Lateral Poppy, he presents Radio National's Science
Show. BUY
 In
Good Company
How Social Capital Makes Organisations Work
By Don Cohen and Laurence Prusak
ISBN: 087584913X
Publisher & date: Harvard Business School Press, Jan 2001
Format: Hardcover
Price: A$68.95
Knowledge has always resided in organisations
- but it wasn't until the Information Age put a premium on ides
that intellectual capital was recognised as a critical resource.
Now, forces like technology, globalisation, and the rise of free
agency and virtual workplaces are bringing another form of 'hidden'
capital to the forefront.
This book examines and explains the
role that social capital - a company's 'stock' of human connections
such as trust, personal networks and a sense of community - plays
in thriving organisations. The book argues that social capital is
so integral to business life that without it, cooperative action
- and consequent productive work - isn't possible. The authors help
today's leaders understand the nature and value of social capital,
suggest ways they can encourage and enhance it, and explore how
they can protect this vital but increasingly vulnerable in a volatile
and virtual world. BUY
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