The Global Thinkers Book Club

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1. Fault Lines, by Global Thinker No. 26 Raghuram Rajan

Rajan's look at the fissures that brought about the global financial crisis -- and which are still at work today.

Fault Lines: "There are deep fault lines in the global economy, fault lines that have developed because in an integrated economy and in an integrated world, what is best for the individual actor or institutions is not always best for the system. Responsibility for some of the more serious fault lines lies not in economics but in politics. Unfortunately, we did not know where all these fault lines ran until the crisis exposed them. We now know better, but the danger is that we will continue to ignore them."

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2. Too Big to Fail, by Andrew Ross Sorkin

As the Wall Street crisis went global, Sorkin updated his account of the crisis's ground zero to include more recent events.

Too Big to Fail: "Perhaps the most disquieting development that has taken place during the past year hasn't been on Wall Street or in Washington, but global. No longer is the phrase 'too big to fail' being associated with banks alone. It is now being used to describe municipalities and countries that, like many home borrowers, have become overleveraged. Much recent concern has focused on Greece, but Spain, Italy, Portugal, and Ireland are all considered vulnerable. In the United States, worries persist about whether the state of California will ultimately meet its day of reckoning."

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3. The Plundered Planet, by Global Thinker No. 29 Paul Collier

From the author of The Bottom Billion, a new work that takes apart the dichotomy between environmentalism and development aid and explains why the two must work in harmony.

The Plundered Planet: "Nature matters and we are making a mess of it. This matters most for the people who live in the world's poorest countries. For them the situation poses both an opportunity and a threat of vital proportions."

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4. The Rational Optimist, by Matt Ridley

Ridley's determinedly cheerful book on why everything is going to be OK -- even Africa and global warming.

The Rational Optimist: "I think … an honest appraisal of the facts leads to the conclusion that by far the most likely outcome of the next nine decades is both that Africa gets rich and that no catastrophic climate change happens."

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5. The Upside of Irrationality, by Dan Ariely

A defense of the forces of irrationality in human life.

Upside of Irrationality: "By now I hope it's clear that if we place human beings on a spectrum between the hyperrational Mr. Spock and the fallible Homer Simpson, we are closer to Homer than we realize. At the same time, I hope you also recognize the upside of irrationality -- that some of the ways in which we are irrational are also what makes us wonderfully human (our ability to find meaning in work, our ability to fall in love with our creations and ideas, our willingness to trust others, our ability to adapt to new circumstances, our ability to care about others, and so on). Looking at irrationality from this perspective suggests that rather than strive for perfect rationality, we need to appreciate those imperfections that benefit us, recognize the ones we would like to overcome, and design the world around us in a way that takes advantage of our incredible abilities while overcoming some of our limitations. Just as we use seat belts to protect ourselves from accidents and wear coats to keep the chill off our backs, we need to know our limitations when it comes to our ability to think and reason -- particularly when making important decisions as individuals, business executives, and public officials. One of the best ways to discover our mistakes and the different ways to overcome them is by running experiments, gathering and scrutinizing data, comparing the effect of the experimental and control conditions, and seeing what's there. As Franklin Delano Roosevelt once said, 'The country needs, and unless I mistake its temper, the country demands, bold, persistent experimentation. It is common sense to take a method and try it: If it fails, admit it frankly and try another. But above all, try something.'"

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6. This Time Is Different, by Global Thinkers No. 73 Kenneth Rogoff and Carmen Reinhart

Rogoff and Reinhart's look at how financial crises have dogged human history, from medieval times to the present day.

This Time Is Different: "No matter how different the latest financial frenzy or crisis always appears, there are usually remarkable similarities with past experience from other countries and from history. The instruments of financial gain and loss have varied over the ages, as have the types of institutions that have expanded might­ily only to fail massively. But financial crises follow a rhythm of boom and bust through the ages. Countries, institutions, and financial in­struments may change across time, but human nature does not. Recognizing these analogies and precedents is an essential step toward improving our global financial system, both to reduce the risk of future crisis and to better handle catastrophes when they happen."

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7. Freedom, by Jonathan Franzen

The novel of the year, by the newly anointed "Great American Novelist."

Kwame Anthony Appiah, writing about Franzen and Malthus on Slate.com: "Homo sapiens is the only species that can regret its multiplication, and it often has cause to. Our numbers include scapegraces, scoundrels, and unhinged hostage takers. But also the odd novelist who can tell you something about what it's like to be alive at a particular place and time, how it feels to be riven between closely argued despair and unreasonable happiness. It almost gives you hope for the 'future fate of mankind.'"

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8. Cyber War, by Global Thinker No. 76 Richard Clarke and Robert Knake

From the man who famously warned about 9/11, a newly terrifying prognosis: that the United States isn't prepared for the greatest threat of the 21st century -- online war.

Cyber War: "The biggest secret in the world about cyber war may be that at the very same time the U.S. prepares for offensive cyber war, it is continuing policies that make it impossible to defend the nation effectively from cyber attack."

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9. Washington Rules, by Andrew Bacevich

A scholar of war examines how conventional wisdom can immobilize progress, both within himself and in his own country.

Washington Rules: "In one sense, the national security policies to which Washington so insistently adheres express what has long been the preferred American approach to engaging the world outside our borders. That approach plays to America's strong suit -- since World War II, and especially since the end of the Cold War, thought to be military power. In another sense, this reliance on military might creates excuses for the United States to avoid serious engagement: Confidence in American arms has made it unnecessary to attend to what others might think or to consider how their aspirations might differ from our own. In this way, the Washington rules reinforce American provincialism -- a national trait for which the United States continues to pay dearly.

"The persistence of these rules has also provided an excuse to avoid serious self-engagement. From this perspective, confidence that the [rules] will oblige others to accommodate themselves to America's needs and desires -- whether for cheap oil, cheap credit, or cheap consumer goods -- has allowed Washington to postpone or ignore problems demanding attention here at home. Fixing Iraq or Afghanistan ends up taking precedence over fixing Cleveland and Detroit. Purporting to support the troops in their crusade to free the world obviates any obligation to assess the implications of how Americans themselves choose to exercise freedom."

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10. The Invisible Gorilla, by Christopher Chabris and Daniel Simons

Two psychologists unravel the mysteries of illusion in daily life.

The Invisible Gorilla: "Once you know about everyday illusions, you will view the world differently and think about it more clearly. You will see how illusions affect your own thoughts and actions, as well as the behavior of everyone around you. And you will recognize when journalists, managers, advertisers, and politicians -- intentionally or accidentally -- take advantage of illusions in an attempt to obfuscate or persuade. Understanding everyday illusions will lead you to recalibrate the way you approach your life to account for the limitations -- and the true strengths -- of your mind. You may even come up with ways to exploit these insights for fun and profit. Ultimately, seeing through the veils that distort how we perceive ourselves and the world will connect you -- for perhaps the first time -- with reality."

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11. Ill Fares the Land, by Tony Judt

A passionate, outraged cry for collective action, from the late historian.

Ill Fares the Land: "Something is profoundly wrong with the way we live today. For thirty years we have made a virtue out of the pursuit of material self-interest: indeed, this very pursuit now constitutes whatever remains of our sense of collective purpose. We know what things cost but have no idea what they are worth. We no longer ask of a judicial ruling or a legislative act: is it good? Is it fair? Is it just? Is it right? Will it help bring about a better society or a better world? Those used to be the political questions, even if they invited no easy answers. We must learn once again to pose them."

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12. On Compromise and Rotten Compromises, by Avishai Margalit

When is it justified to accept a strategic compromise for peace? Sometimes, but not always.

On Compromise and Rotten Compromises: "I believe that beyond the ambivalence toward compromise and the spirit of compromise lurks a deep tension between peace and justice. Peace and justice may even demand two incompatible temperaments, one of compromise for the sake of peace, and the other of a Michael Kohlhaas-like bloody-mindedness, to let justice prevail, come what may. In the Hebrew Bible peace and justice live in harmony: 'Justice and peace kissed' (Psalm 85:11). By contrast, for dark Heraclitus, peace and justice live in disharmony: 'Justice is strife.' The Talmud recognizes the tension between the two: 'When there is strict justice there is no peace and where there is peace there is no strict justice.' The spirit of peace, for the Talmudists, is the spirit of compromise as manifested in arbitration; the spirit of justice -- 'Let justice pierce the mountain' -- is manifested in trial. Moses, in the eyes of the rabbis, incarnates the spirit of justice, and his brother Aaron incarnates the spirit of compromise and peace. Moses is admired. Aaron is loved.

"The tension between peace and justice is at the center of this book; compromise is the go-between. I am particularly interested in the moral status of compromise made for the sake of peace at the expense of justice. How far can we go for peace by giving up on justice? Quite a distance, I say, but not the whole way. This is the short answer. My long answer is this whole book."

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13. Switch, by Chip Heath and Dan Heath

A behavioral-psych look at making huge changes, from the personal to the political -- why it's so difficult, and how to accomplish it gracefully.

Switch: "This is a book to help you change things. We consider change at every level -- individual, organizational, and societal. Maybe you want to help your brother beat his gambling addiction. Maybe you need your team at work to act more frugally because of market conditions. Maybe you wish more of your neighbors would bike to work.

"Usually these topics are treated separately -- there is 'change management' advice for executives and 'self-help' advice for individuals and 'change the world' advice for activists. That's a shame, because all change efforts have something in common: For anything to change, someone has to start acting differently. Your brother has got to stay out of the casino; your employees have got to start booking coach fares. Ultimately, all change efforts boil down to the same mission: Can you get people to start behaving in a new way?

"We know what you're thinking -- people resist change. But it's not quite that easy. Babies are born every day to parents who, inexplicably, welcome the change. Think about the sheer magnitude of that change! Would anyone agree to work for a boss who'd wake you up twice a night, screaming, for trivial administrative duties? (And what if, every time you wore a new piece of clothing, the boss spit up on it?) Yet people don't resist this massive change -- they volunteer for it."

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14. The Big Short, by Michael Lewis

The instantly classic retelling of what went so wrong in the U.S. financial sector before the crash.

The Big Short: "The growing interface between high finance and lower-middle-class America was assumed to be good for lower-middle-class America. This new efficiency in the capital markets would allow lower-middle-class Americans to pay lower and lower interest rates on their debts. In the early 1990s, the first subprime mortgage lenders -- The Money Store, Greentree, Aames -- sold shares to the public, so that they might grow faster. By the mid-1990s, dozens of small consumer lending companies were coming to market each year. The subprime lending industry was fragmented. Because the lenders sold many -- though not all -- of the loans they made to other investors, in the form of mortgage bonds, the industry was also fraught with moral hazard. 'It was a fast-buck business,' says [Wall Street analyst Sy] Jacobs. 'Any business where you can sell a product and make money without having to worry how the product performs is going to attract sleazy people. That was the seamy underbelly of the good idea. [Analyst Steve] Eisman and I both believed in the big idea and we both met some really sleazy characters. That was our job: to figure out which of the characters were the right ones to pull off the big idea.'

"Subprime mortgage lending was still a trivial fraction of the U.S. credit markets -- a few tens of billions in loans each year -- but its existence made sense, even to Steve Eisman. 'I thought it was partly a response to growing income inequality,' he said. 'The distribution of income in this country was skewed and becoming more skewed, and the result was that you have more subprime customers.' Of course, Eisman was paid to see the sense in subprime lending: Oppenheimer quickly became one of the leading bankers to the new industry, in no small part because Eisman was one of its leading proponents. 'I took a lot of subprime companies public,' says Eisman. 'And the story they liked to tell was that "we're helping the consumer. Because we're taking him out of his high interest rate credit card debt and putting him into lower interest rate mortgage debt." And I believed that story.' Then something changed."

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15. Human Accomplishment, by Charles Murray

A novel approach to intellectual history, from the controversial co-author of The Bell Curve.

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16. Energy Myths and Realities, by Global Thinker No. 49 Vaclav Smil

A grand debunking of Western thought about climate change, from Bill Gates's favorite iconoclast.

According to Bill Gates: "Some readers may find Smil's unrelenting criticism of these misguided thoughts a bit tough, but it is important for us to study these mistakes. If we think solving energy problems is easy we will not invest enough to bring low cost power to the poor and we will not take the necessary actions to avoid climate disaster. I recommend this book to everyone who spends time working on energy issues -- not to cheer them up but to help them have a stronger framework for evaluating energy promises. Smil is able to prove that even if we do our best and innovation is amazing, real change will still take at least 20 years. To me, the long lead times and uncertainties involved in bringing new sources of energy online underscore the importance of pursuing many different paths."

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17. Imagining India, by Global Thinker No. 43 Nandan Nilekani

One of India's most essential entrepreneurs explores what his country might become, if long-entrenched restrictions on growth and prosperity could be set aside.

Imagining India: "As both an entrepreneur and a citizen, I have been heartened by our economic progress in the last twenty-five years. India's annual growth of more than 6 percent since the early 1990s is surpassed in history by only one other country, China. And we have made incredible strides in other areas -- in the rise of our domestic market, our average incomes and a powerful middle class. But our successes are bittersweet. The immense challenges India faces more than two decades after reform trigger a range of emotions in me, as they do among many of my fellow citizens -- puzzlement and frustration at the modest pace at which we are bringing about change, and sadness at the persistent inequity that is visible across India. There is a growing sense that these problems are now coming to a head -- that our inequalities are making people angry and also limiting our ability to take advantage of the huge opportunities India has today."

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18. Animal Spirits, by George Akerlof and Global Thinker No. 48 Robert Shiller

Akerlof and Shiller's work, written at the nadir of the economic collapse in 2008 and 2009, about how human irrationality drives markets.

Animal Spirits: "To understand how economies work and how we can manage them and prosper, we must pay attention to the thought patterns that animate people's ideas and feelings, their animal spirits. We will never really understand important economic events unless we confront the fact that their causes are largely mental in nature."

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19. The Checklist Manifesto, by Global Thinker No. 72 Atul Gawande

From the surgeon and New Yorker author, a plea for better tools to synthesize information -- one that has been taken up by the World Health Organization.

The Checklist Manifesto: "I think we have been fooled about what we can expect from medicine -- fooled, one could say, by penicillin. Alexander Fleming's 1928 discovery held out a beguiling vision of health care and how it would treat illness or injury in the future: a simple pill or injection would be capable of curing not just one condition but perhaps many. Penicillin, after all, seemed to be effective against an astonishing variety of previously untreatable infectious diseases. So why not a similar cure-all for the different kinds of cancer? And why not something equally simple to melt away skin burns or to reverse cardiovascular disease and strokes?

"Medicine didn't turn out this way, though. After a century of incredible discovery, most diseases have proved to be far more particular and difficult to treat. This is true even for the infections doctors once treated with penicillin: not all bacterial strains were susceptible and those that were soon developed resistance. Infections today require highly individualized treatment, sometimes with multiple therapies, based on a given strain's pattern of antibiotic susceptibility, the condition of the patient, and which organ systems are affected. The model of medicine in the modern age seems less and less like penicillin and more and more like what was required for the girl who nearly drowned. Medicine has become the art of managing extreme complexity -- and a test of whether such complexity can, in fact, be humanly mastered."

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20. Here Comes Everybody, by Global Thinker No. 67 Clay Shirky

The web 2.0 guru on the social implications of the Internet.

Here Comes Everybody: "For most of modern life, our strong talents and desires for group effort have been filtered through relatively rigid institutional structures because of the complexity of managing groups. We haven't had all the groups we've wanted, we've simply had all the groups we could afford. The old limits of what unmanaged and unpaid groups can do are no longer in operation; the difficulties that kept self-assembled groups from working together are shrinking, meaning that the number and kinds of things groups can get done without financial motivation or managerial oversight are growing. The current change, in one sentence, is this: most of the barriers to group action have collapsed, and without those barriers, we are free to explore new ways of gathering together and getting things done."

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