January 2, 2019
One of the keys to becoming a successful investor is to realize that the strongest long-term trends will always transcend the ebb and flow of daily market gyrations and scary headlines. The media will forever focus on the worst-case scenario, but the one thing I would counsel investors to remember is that seven billion people are working every day to make their life better and that will always be a bullish force.
Last year offered a bumper crop of books that can remind us of that fact. For decades, I’ve read 100 good books a year, since I know that the Internet and Cable TV are trying to trivialize my mind with minutiae. Of the 105 books I read in 2018, these are the best 10. As I scan the Top 10 book lists of the New York Times and other venerable sources, I don’t see these names listed. I see a lot of ephemera and opinion.
I was pessimistic for the first 25 years of my journalistic career (1965-89), but I wised up when the Berlin Wall fell. The world has made almost unbelievable progress since 1965. In fact, three of these 10 books (Pinker, Easterbrook, and especially Rosling) show that almost nobody believes this progress.
As you can see from these titles, I’m partial to books that cover a large historical canvas with a point of view that ties these great ideas together. I’ll profile them briefly here, in publication order:
Niall Ferguson, “The Square and the Tower: Networks and Power, from the Freemasons to Facebook” (January 16) compares the old top-down method of government (the Tower), including both church and state, with the volunteer networking of people (the Square). America was mostly built with what Edmund Burke called “little platoons,” from private mutual insurance groups to volunteer firemen. Ferguson relies a bit too heavily on the Tower and the need for heavy regulation, but I think the Square will likely prevail.
Charles Mann, “The Wizard and the Prophet: Two Remarkable Scientists and Their Dueling Visions to Shape Tomorrow’s World” (January 23) compares the “Wizard,” biologist Norman Borlaug, who saved the lives of billions with his Green Revolution, to the “Prophet” of doom, William Vogt, the first modern Malthusian to predict that the world’s resources would soon run out due to over-population.
Steven Pinker, “Enlightenment Now! The Case for Reason, Science, Humanism, and Progress” (February 13) is a follow-up to his earlier book, “The Better Angels,” about how human achievement is making life much better – lower crime rates, far lower death rates from war, lower deaths from disease or child mortality, and other risks, which formerly led to a much lower global life expectancy. He credits the scientific method for these advances and bemoans the many barriers some still erect against this progress.
Gregg Easterbrook, “It’s Better than it Looks: Reasons for Optimism in an Age of Fear” (February 20) is similar to Pinker’s book, but it’s more political, opening with Donald Trump’s inaugural address about the rise in crime, joblessness, poverty, and other ills – all of which are demonstrably not rising. Politicians and the media tend to tap into our fears to make money (or earn votes) instead of educating or inspiring us with accurate reporting on the positive trends that make life better. Fear makes big money for its abusers.
Ed Yardeni, “Predicting the Markets: A Professional Autobiography” (March 23) is the most important book on this list for our goal of analyzing this manic-depressive stock market. In his memoir, Yardeni begins with his entry into the business 40 years ago, followed by detailed examinations of various economic statistics. Keep this book nearby as a reference work for market statistics as they are released.
Hans Rosling, “Factfulness: Ten Reasons We’re Wrong About the World – and Why Things are Better than You Think” (April 3) quantifies the level of ignorance among the general population as well as the most highly educated elite about the state of the earth’s health, wealth, population, education, and other key issues. You may be shocked to see how much people have been programmed to believe the worst.
Jonah Goldberg, “The Suicide of the West: How the Rebirth of Tribalism, Populism, Nationalism, and Identity Politics is Destroying American Democracy” (April 24) is concerned that we are voluntarily dividing ourselves into warring camps, not listening to anyone else with different ideas. He is also concerned that we no longer believe the best about most of our fellow Americans. Jonah was a panelist with me in New Orleans this November, where we discussed several ideas emanating from this book.
Adam Tooze, “Crashed: How a Decade of Financial Crises Changed the World” (August 7) is the best book about the 2008 crash I’ve read. Though exhaustive in its research (to the point of statistical overkill at times), its main takeaway, to me, was how overloaded with U.S. subprime mortgage debt the leading European banks were, causing Europe to go into a second recession in 2011, followed by a new crisis in the euro-zone almost every year. Ironically, America came out of its own crisis healthier than Europe.
Greg Lukianoff & Jonathan Haidt, “The Coddling of the American Mind: How Good Intentions and Bad Ideas are Setting up a Generation for Failure” (September 4) identifies three great untruths prevalent on campuses for the iGen birth cohort (born 1996 and later, on campus since 2014): (1) “Fragility” or “That which doesn’t kill me makes me weaker.” (2) “Always trust your emotions” and (3) “The world is made up of good people vs. bad people.” These untruths create most of our biggest conflicts these days.
Alan Greenspan & Adrian Wooldridge, “Capitalism in America: A History” (October 16) covers the grand history of America’s risk-taking “creative destruction” over the last 400 years. The former Fed chairman and long-time columnist from The Economist are refreshingly non-academic, beginning with a “flight of fancy” about a version of the Davos World Economic Forum held in 1620, when empires from China, Turkey, and London dominated, while the settlers in America’s Colonies held the key to the future.
Give Good Books to the Next Generation – to Build Their IQ and Civilize Them
Books build minds better than Tweets or Instagrams, Internet memes, or – God forbid! – chat boards. Ever since I left college over 50 years ago, I was determined to keep on learning in a variety of fields, and I am convinced that books are the best way to learn. Long-simmered, edited, footnoted, and fiercely critiqued, they are a crucible of truth and a way to think the long game, not react to short-term bursts from one’s id.
We have lost the art of critical thinking, which comes from strict training but also from daily workouts, best found in reading 100 pages per day in well-reasoned books. I still read over 100 books a year, no matter how much magazines, the Internet, and Cable TV beckon. Most have surrendered to the screen.
Daniel Hannan, a British MP to the EU, has written much about the origin of civilization’s greatest ideas (see Inventing Freedom: How the English-Speaking Peoples Made the Modern World,” 2013). Lately, he has reported that the hard-won IQ gains in the 20th century are being reversed in the 21st Century:
“For most of the twentieth century, IQ rose by around three points per decade globally, probably because of better nutrition. But that trend has recently gone into reverse in developed countries. A new study from Norway, which examines IQ scores from 730,000 men (standardized tests are part of military service there) … shows IQ dropping within the same families. Men born in 1991 score, on average, five points lower than men born in 1975. There must, in other words, be an environmental explanation, and the chronology throws up a clear suspect: the rise in screen-time. Kids brought up with Facebook and Instagram are more politically bigoted, not because they don’t hear alternative opinions, but because they don’t learn the concentration necessary to listen to opponents — a difficult and unnatural skill.” — from “Falling IQ scores may explain why politics has turned so nasty,” Washington Examiner, Oct. 22, 2018.
Pardon me for adding another book that fits that bill perfectly: Charles Krauthammer, “The Point of it All: A Lifetime of Great Loves and Endeavors” (December 4). I was on panels with Charles for eight years before he died last June. He is one of the greatest minds I have known. As his life was ebbing, his son Daniel helped his father assemble these writings into a coherent record of what he wanted to say in leaving this world. We will miss him, but this and Things That Matter, are how he left us, wanting more.
To repeat, these books will remind us of history’s most powerful mega-trend: Seven billion people are working every day to make their family’s life better, and that will always be a bullish force.