Monthly Archives: August 2008

Doing Business in India (2005)

 Doing Business in India (2005) is a book by Professor Rajesh Kumar of Aarhus School of Business (Denmark) and Anand Kumar Sethi of Applied Technology Services Pvt. Ltd. The book discusses the emergence of India as “a major economic superpower” where American and European companies are doing business in increasing numbers. It places the growth of India in a historic context, arguing that it was “the very first globalized economy in the history of the world”. It discusses the fight among European countries over the imperialism of India and explains how the 250 years of colonial slavery continues to affect Indian attitudes towards global business even in the 21st century. It discusses how Indian culture and offers suggestions for companies interested in conducting business in India.

The book’s most controversial claim is perhaps the repeated assertion that India should be considered culturally western. For example, on page 38 the authors state “Indians are closer to Europeans/Americans than they are to Asians”. This claim is repeated multiple times in the paper, with the authors arguing that the Indian culture should be considered western, not eastern. Interestingly, this claim is attributed to the now-discredited Aryan Migration/Invasion Theory (AMT/AIT). It is not clear what the authors believe can be gained if it is to be believed that the Indian culture is “more similar to the Westerners than it was to the East Asians”, but it is apparent that the authors passionately subscribe to this belief.

The book is certainly worth reading for practitioners, academics, and students. However, it does have certain weaknesses that reduce its credibility. Though the book has a 14-15 page bibliography, at a number of places it makes claims without attributing them to any reliable sources. Consider this:

During a recent extremely crucial match between India and Pakistan, with the Indian side close to a historic first-ever series win over their arch rivals on Pakistani turf, all the security guards, immigration and customs officer at Delhi’s Indira Gandhi International Airport were seen huddled around TV sets showing the game live without a thought about opportunities for terrorists, smugglers, or illegal immigrants.    (p. 82).

Clearly, a very strong claim is being made, however, no evidence is presented to support it. Nevertheless, I recommend the book for those interested in better understanding a country which is expected to be one of the world’s three largest economies in the next two decades.

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The Pretender (2002)

 The Pretendor: How Martin Frankel fooled the financial world and led the feds on one of the most publicized manhunts in history is a book about Martin Frankel, a self-taught U.S. stock-broker, by Ellen Joan Pollock. The book describes the rise of Martin Frankel from an unemployed nerd who lived in his parent’s basement to a global businessman who hobnobbed with celebrities and politicians in US and Europe. It describes how Frankel, who did not like to leave his Greenwich (Connecticut) mansion, cheated investors of more than $200 million all over the country. It vividly describes the sex life of a perverted man who ‘obtained’ women from all over the US and many other countries of the world to build himself a modern-day harem. It discusses the financial decline of Martin Frankel and his eventual arrest in Germany when one his girl friends betrayed him to the feds.

Martin believed he was a genius at identifying stocks which could give better returns than what Warren Buffet was able to have. Unfortunately, Martin was never able to make the decision to invest (or divest) stocks. He believed he had ‘trader’s block’, a psychological barrier that prevented him from making trading decisions. Despite his alleged brilliance in identifying high-growth stocks, martin Frankel obtained his fortune from his acquisition of financially-troubled insurance companies which sold insurance policies to senior citizens through family-owned funeral homes in southern states such as Tennessee and Mississippi.

In the book, Martin Frankel is repeatedly described as a modern-day Howard Hughes (they were both eccentric millionaires and shared a common obsessive fear of germs). Martin Frankel was sentenced to a 17 year prison sentence after his arrest and continues to live in infamy as an admitted perpetrator of one of the largest insurance scams in American history.    

The book is worth reading, especially if you can overlook the somewhat unnecessary description of Martin Frankel’s sexual adventures.

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Greenspan’s Fraud

 Greenspan’s Fraud: How two decades of his policies have undermined the global economy is an ambitious and bold book by Dr. Ravi Batra, professor of economics at Southern Methodist University in Dallas (Texas). This book is a direct, harsh, and explicit critique of Greenspan and his policies during the years he was the Fed Chief. Professor Batra blames Greenspan for most of the economic failures during his time at the Feds and later. The most interesting and provocative characterestic of the book is not only that Greenspan is held responsible for many economic problems, these problems are clearly attributed at times to stupidity and naivity and at other times to deception and fraud. Professor Batra discusses Greenomics- Greenspan’s economics- and finds that it was based on what Wall Street wanted, rather than on sound economic theory. The book’s conclusion (and assumption) is that Greenspan committed an intellectual and financial fraud on the American people, which resulted in substantial negative impact on the economy of the U.S. and the world.

Alan Greenspan was revered around the world for his leadership of the U.S. Federal Reserve. As Professor Batra acknowledges in his book, Greenspan was decorated by the Legion of Honor by France and knighthood (Knight of the British Empire) by England. However, this global reputation of Alan Greenspan has suffered seriously in the aftermath of the 2008 housing crisis. CNN has included him in its Hall of Shame of 10 people most responsible for the crisis in the economy. Italy’s foreign minister is believed to have said that Greenspan ranks only after Bin Laden in hurting America. Greenspan himself accepts that the (2008) economic situation is worse than it has ever been in his life. (An interview with Alan Greenspan about how he could have missed that such a crisis was coming can be found here. For those who prefer humor, here’s Alan Greenspan explaining what his role as Fed Chair was). 

It is obvious that Alan Greenspan’s reputation has suffered, perhaps irrepairably, due to the economic crisis that has occured so soon after his leadership at the Federal Reserve. Professor Batra’s book presents an unflattering picture of Alan Greenspan that most people usually do not get to hear about. If the reader is willing to overlook Professor Batra’s obvious dislike of Alan Greenspan and his policies, the book can be helpful in learning about things that have been relatively less recognized and discussed in the media and in policy circles.

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Business Maharajas (1996)

Business Maharajas (1996) is a book by Dr. Gita Piramal about seven Indian business moguls. Dr. Piramal introduces us to the life and works of Dhirubhai Ambani, Rahul Bajaj, Aditya Birla, R. P. Goenka, Brij Mohan Khaitan, Bharat & Vijay Shah, and Ratan Tata. These men either founded or succesfully managed some of independent India’s biggest business groups. The book discusses the challenges these business leaders confronted in managing their empires and makes an effective argument for why all Indians need to appreciate the success of these moguls who succeeded despite tremendous odds against them.

Gita Piramal is a PhD in business history, but it is her affiliation with a leading Indian business family that allows her an insider view into the lives of these business leaders. Her insider status is apparent in the book. Professor Piramal has trouble acknowleding and presenting the “dark side” of any of the business leaders in her book. This is not a shortcoming in itself, if Dr. Piramal acknowledged her privileged insider status upfront. Other than the obvious issue of bias, I was also surprised that Dr. Piramal avoided a discussion of why Indian business moguls have generally ignored or overlooked overseas expansion, unlike business people from U.S., Europe, and even China who have been more willing to and succeeded in expanding their business abroad.

The book is a good read. Dr. Piramal has a story-telling writing style that keeps the reader engaged by presenting interesting, if not always critically important, information on her subjects. Certainly worth reading, especially if you are considering doing business in India or with any of the companies discussed in the book.

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The Coming China Wars (2006)

 The Coming China Wars: Where they will be fought and where they can be won (2006) is a book by Dr. Peter Navarro, Professor of Business at University of California-Irvine about the intense competition between US and China. The book discusses the relatively rapid emergence of China as a formidable power in the modern global economy and how China’s rise is a threat to the world. He attributes China’s success to low cost labor, disregard for the health and safety of factory workers (and citizenry in general), currency manipulation, export subsidies, rampant counterfeiting and piracy, and oppression of the poor and the weak. It describes a China threatened by internal turmoils (e.g. peasant uprisings) and external problems (e.g. Japan), trapped between tradition and modernity, and unsure of the right balance between communism and capitalism. It describes the problems China faces and its inability (and in some cases, unwillingess) to deal with most of those problems. The underlying thesis of the book is that a global conflict between China and the US is inevitable and offers suggestions on the steps US government can take to win the war with China.

Most experts, analysts, and lay people around the world agree that China has emerged as a global power in the last few years. There is a general consensus that the China of today is much stronger than the China of 50 years back and that the rapid ascent of China is going to continue at least in the near future. Where people disagree is the factors that led to this ascent and the global consequences of China’s power. Professor Novarro’s book is not an unbiased analysis of the factors and consequences of China’s economic success, but it is certainly a passionate and well-written account of why China is a threat to the world. Notably, Professor Novarro is not the only one who holds the views expressed in this book, many China experts, popular commentators, and talk show hosts in the US have often expressed similar views on TV and other public forums (e.g. Glenn Beck and Sean Hannerty).

I enjoyed reading this book and I recommend it to people who want to learn more about China and its relationship with China. I do not believe, and I am sure Professor Novarro would agree with me, that the book provides an unbiased discussion of the various China-related issues. However, I do not think the bias of the author is a weakness of the book. In fact, I think it’s a strength. Professor Novarro has wonderfully articulated the views held by a sizeable section of the US people (and many in other countries) about China. He has clearly stated that most of the research for the book was done on the internet and makes no claim of looking at things from a Chinese (or non U.S.) perspective. The biases have been acknowledged, now let the conversation begin!

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