How These Books Can Shape the Way You Picture Economics and Business
Bill Gates has never been a stranger to reading. After all, he wouldn’t be one of the richest men on Earth otherwise. But ever since COVID-19 left him cooped up in his home, Mr. Gates has been recommending good books that help the average American with an understanding of how the economic and business worlds work. These four books are some of his highest recommendations this summer:
Good Economics for Hard Times, by Abhijit V. Banerjee and Esther Duflo
Good Economics for Hard Times, by Abhijit V. Banerjee and Esther Duflo, with as apt a name as ever, is one such book. The book explains just how much (or how little) economists can actually predict trends with a high degree of precision. The short answer is, outside of a few specialized areas, economists can’t understand all that much about the world.
The reason why it’s so hard for economics to be precise is simple: economics is the study of the “market,” any place where people can buy and sell goods and services. And the study of the market is essentially the study of human psychology on a large scale, meaning that to predict the market you have to predict the actions of everybody participating in that market. In other words, you have to be a first-rate psychologist working on hundreds of thousands, if not millions, of people at a time!
Still, Banerjee and Duflo point out that economics can offer good insights in certain situations. And they do it in a way that is both entertaining and informative. As Gates himself said in his blog, “I found most of it to be useful and compelling. I suspect you will too.”
The Future of Capitalism, by Paul Collier
If thinking on the problems with late-stage capitalism is something you find entertaining, rest easy knowing that Gates has a book for you. Paul Collier’s book The Future of Capitalism lingers on the consequences of our current economic model, both good and bad. Luckily, it also explains how we can try to maximize the former and reduce the latter.
In explaining how the economic world works, Collier demonstrates just how small consequences by people can feedback into much further reaching situations than initially anticipated. He also stresses that every action has a cost, even if someone isn’t directly paying for it.
Giving capitalism a conscience is a hard task to undertake, but an important one. And if anyone can change how it works, it’s the business people who keep the system running. For that and for an excellent explanation of real-world macroeconomics, Gates recommends this book.
The Ride of a Lifetime, by Robert Iger
Gates is a self-proclaimed “hesitant” recommender of business books, because, in his own words, “it is rare to find one that really captures what it’s like to build and operate an organization or that has tips you could really put into practice”. That’s why when he does step up to recommending something, it’s a surefire sign that it’s going to be good.
The Ride of a Lifetime, by former CEO of Disney Robert Iger is one such recommendation. Chronicling the life of its author, this book accurately describes the feeling of being a business leader like so few other books can. The never-ending grind, anxiety over news, and whiplash with different issues that need to be addressed is palpable. Gates says that’s a good thing.
Still, a key decision Iger makes with the handling of his business is almost counter-intuitive. Instead of tightly gripping the wheel when it comes to important decisions, Iger chooses to delegate responsibility. Simply put, Iger trusts that his chosen people know best. More often than not, it’s a winning strategy.
Business Adventures, by John Brooks
Although last on this list, it’s certainly not least. Business Adventures has been long held as Gates’s favorite business book, ever since Warren Buffett himself lent a young Gates his personal copy.
This praise is not earned without merit. Brooks, in Gates’s opinion, has mastered the ability to tell important concepts clearly without scrimping on the details. Even better, Brooks is able to effectively unearth the fundamental wisdom of business that never changes, even if what’s on the surface does.
Brooks isn’t only a man of facts and figures. His storytelling skills are good enough to keep Gates himself hooked. This could be examples of business owners outwitting shareholders or people engaging in wacky hijinks in the name of Public Relations.
However Brooks writes, the meaning behind his words stands out among others as a testament to how businesses should be run. Every enterprising entrepreneur should cut his literary teeth on this book at least once.
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