Best Business Books
2017 Narratives
Cyrus
Bozorgmehr
Once Upon a Time in Shaolin: The Untold Story of Wu-Tang Clan’s Million-Dollar Secret Album, the Devaluation of Music, and America’s New Public Enemy No. 1 (Macmillan, 2017)
Once Upon a Time in Shaolin: The Untold Story of Wu-Tang Clan’s Million-Dollar Secret Album, the Devaluation of Music, and America’s New Public Enemy No. 1 (Macmillan, 2017)
White-collar
crime. We may think it’s always been with us. But it was a novel concept
in 1939, when sociologist Edwin Sutherland coined the phrase, according to a
new book by Harvard Business School (HBS) professor Eugene Soltes, Why They Do It: Inside the Mind of the
White-Collar Criminal. Sutherland was the first to argue that
stealing wasn’t restricted to deviant, lower-class individuals on the
streets “but rather was present within many of the leading corporations
of America,” writes Soltes.
Others
believe the crime is what is sanctioned by law and hence goes unpunished. “I
say corruption, but it’s all legal, because that’s how institutional corruption
works — the guys taking the money make the laws,” writes Cyrus Bozorgmehr
in Once Upon a Time in Shaolin: The Untold Story of Wu-Tang Clan’s
Million-Dollar Secret Album, the Devaluation of Music, and America’s New Public
Enemy No. 1.
Two of
this year’s three narrative-focused best business books raise important and
uncomfortable questions about the way in which we define and attempt to curtail
and punish corporate practices that aren’t good for society (or how we fail to
make those attempts). The third, Jonathan Taplin’s Move Fast and
Break Things, considers the way in which some of the largest digital
companies seek to capture our attention.
Not many case studies on white-collar crime
are taught at HBS, where Soltes teaches accounting and management. But struck
by the “bewildering number of theories about why white-collar criminals ‘did
it,’” he began talking to them directly, ultimately corresponding with and
visiting more than four dozen of the most senior executives who oversaw some of
the most significant corporate failures in history.
Soltes questions common theories, like one
most recently espoused by former federal prosecutor Preet Bharara, who said the
white-collar criminals he prosecuted were “‘highly skilled at cost-benefit
analysis’ and they ‘weigh the risk of getting caught against the potential
reward, and they decide it’s worth the risk.’” Rather, there seemed to be no
method to the madness of the executives the author interviewed. Sam Waksal, the
former ImClone CEO who went to jail for insider trading (and who also
tipped Martha Stewart), tells Soltes, “They wrote about me as if there was some
giant byzantine idea that I was trying to perpetrate…[but] I don’t know what I
was thinking.… I wasn’t, sadly.’” Ponzi schemer extraordinaire Bernie Madoff
tells Soltes, “I really have not been able to figure out how I let myself do
this. Is there a flaw in me?”
In Soltes’s argument, the whys have more to
do with the facelessness of modern big business — you never have to meet the
people you’re stealing from — and our minds’ reflexive power to convince
ourselves that we’re not doing anything wrong. Many fall prey to what Plato
called the “noble lie,” the idea that whatever bad actions you undertake are
fine if they further some grand and good goal, such as keeping shareholders
satisfied. “I never meant to hurt anybody,” one former CEO told Soltes.
“My motivation was for the company to do well.”
Soltes, who is clearly sympathetic toward
some of those he portrays, explores difficult questions about what
constitutes a crime. What’s the difference between a CEO participating in
illicit insider trading and a hedge fund manager trading on better information
than others have? What about the difference between earnings management as
practiced by much-lauded former GE CEO Jack Welch and criminal manipulation of
earnings? Between misleading disclosures of the sort that regularly are employed
to sell used cars and those that send CEOs to jail for securities fraud? Or
between innovative rewriting of regulations à la Uber and criminal rule
breaking? And how should an executive navigate those distinctions, such as they
are, in a world of information overload and split-second decision making?
I found the book totally compelling and
insightful — until I got to Enron. Soltes, who describes Enron’s collapse as
the result of a culture that saw “every problem as something that could be
solved with greater financial ingenuity,” tells the story through the lens of
Andrew Fastow, the company’s former CFO. Fastow, we learn, used aggressive yet
legal accounting techniques to create a more pleasing, but ultimately
misleading, picture of financial reality. “Although each step appears guiltless
on its own, when all of the steps are put together the outcome may appear far
more mischievous,” Soltes writes.
Which, no.
Certainly, too-clever financial engineering
was a big part of the Enron story, but Fastow was actually charged with much
more egregious criminal acts, such as making secret side agreements that
explicitly violated accounting laws, as well as with looting some of the
financial structures he set up; Soltes ignores both of these facts. Did the HBS
professor himself fall victim to the disease of rationalization that affects
the CEOs he describes? Because Soltes wanted to tell a story — and an important
one, at that — about blurry lines, he ignored the inconvenient facts that
didn’t fit his picture. Still, it’s indisputably true that Fastow’s
shenanigans, both legal and illegal, helped destroy Enron, costing
billions of dollars and thousands of jobs.
A Mysterious Album
A
white-collar criminal features prominently in Cyrus Bozorgmehr’s Once Upon a Time in Shaolin, my pick for the year’s best
business book on narratives. This is the rollicking narrative of the rap group
Wu-Tang Clan’s notorious efforts to create an album that, rather than being
mass marketed, would be valued like a work of art — sold to only one buyer, who
would be the only one who could ever play it. “There was no template for
selling a single copy of an album, no identifiable set of collectors or buyers,
no clear medium for the sale, no legal structure whatsoever,” writes Bozorgmehr
(who was an advisor to the project and works for a mysterious Mr. S. who funded
it, and who himself remains something of a cipher).
But the book also invokes much deeper themes.
It’s about the group’s efforts to rectify the fact that file-sharing and
streaming business models have rendered it nearly impossible for most musicians
to make money from their work. “Tragically, in a weird evolutionary flaw, the
less effort people have to make for something, the less they value it,”
Bozorgmehr writes.
The author also has his own answers to some
of the questions Soltes raises. About corporations, he writes that “their very
facelessness abrogates the need for morality.” Executives who are good people
“allow themselves to collude in shocking practices because they have bought
into the insidious architecture of amorality. It’s numbers, it’s statistics,
it’s my job, it’s not my personal morality.” And oh, those noble lies. “A
business is responsible to its shareholders rather than the public good in the
same way that a lawyer is responsible to his client’s interests rather than the
truth,” writes Bozorgmehr. “And that inevitably leads to a winner-take-all
mentality without the nuisance of conscience.”
The twist in this story — and it’s a doozy —
is that Wu-Tang’s album, which was designed to raise moral and philosophical
questions about how we value music, ended up being sold to one of the most
notorious and amoral figures of our time: Martin Shkreli. The so-called Pharma
Bro, who gleefully hiked the price of a lifesaving drug, was found guilty last
summer of securities fraud for an unrelated scheme. The members of Wu-Tang had
no clue about Shkreli’s activities when the then-unknown young entrepreneur
bought their album in the summer of 2015. So when Shkreli burst into the
headlines that fall, it was a crisis. “This wasn’t just calamitous,” writes
Bozorgmehr. “This was Calamity walking into a bar, sweet-talking Catastrophe,
getting really drunk together, smoking some crack, punching Fiasco in the face,
then going on a shooting spree while eating orphans and setting fire to
kittens.”
Bozorgmehr ultimately decides that because
what Wu-Tang wanted to do was foster a debate, it’s actually good that the
album ended up in Shkreli’s hands. “Maybe this was the ultimate artistic
statement,” Bozorgmehr writes. “If we don’t support musicians as a society and
all contribute to [music’s] sustainability, then it will end up in the hands of
the most ruthless capitalists out there.”
Bozorgmehr’s somewhat sympathetic view of
Shkreli is surprising. It is at best ironic that what Shkreli did by
price-gouging the seriously ill was morally reprehensible but legally fine,
whereas he was convicted criminally for running a Ponzi-like scheme in which
everyone got paid back. And maybe Shkreli himself was posing a question about
how our system works. “Much of what Martin was actually doing was entrenched in
the worldview of thousands of cutthroat companies,” Bozorgmehr writes.
Fast and Furious
The
challenge of sustaining viable business models for content is at the center of Jonathan Taplin’s Move Fast
and Break Things. “The
streets of American cities are haunted by the ghosts of bookstores and record
stores, which have been destroyed by the greatest thugs in the history of the
culture industry,” the cultural critic Leon Wieseltier noted in 2015.
In Taplin’s view, the technological
revolution that has swept our world has betrayed all the original idealistic
expectations about aiding art and making the world a better place — and has
done even worse. Founding fathers Thomas Jefferson and James Madison feared the
power of monopolies enough to insist that “freedom from monopoly” should be in
the Bill of Rights. But the all-important digital universe we now live in is
ruled by a series of extremely powerful companies that have a massive influence
on the distribution of content, including Facebook, Apple, and Amazon.
The attitudes of Silicon Valley elites who
have built these companies, Taplin contends, often follow the famous Mark
Zuckerberg advice with which he begins his book: “Move fast and break things.
Unless you are breaking stuff, you aren’t moving fast enough.” In the case of
the Internet giants, “breaking things,” including rules and regulations, lands
their CEOs on magazine covers and ultrarich lists, not in jail. For instance,
Tap-lin details how YouTube’s founders flouted copyright law, with one even
emailing another about how to get content: “Steal it!”
Taplin argues that Silicon Valley’s belief in
the nobility of its goals enables its companies to pursue them without a sense
that they are doing anything wrong. Critical to the success of Silicon Valley
giants, he writes, “is the ability to maintain the illusion that they are
working for the greater good even while pursuing policies that serve only their
own needs.”
On the
contrary, Taplin says, real damage is being done. The fact that a few very
large companies garner the overwhelming majority of Internet advertising has
made it challenging for content creators, producers, and publishers to make a
living. And the relentless rise of these companies may harm humanity. Taplin
quotes author and educator Neil Postman, who brilliantly contrasted the
dystopian visions presented by George Orwell’s 1984 and Aldous
Huxley’s Brave New World. “Orwell feared those who would deprive us
of information. Huxley feared those who would give us so much that we would be
reduced to passivity and egoism,” Postman wrote. “Orwell feared that the truth
would be concealed from us. Huxley feared that the truth would be drowned in a
sea of irrelevance.”
Taplin does engage in some obvious
oversimplification, such as when he asserts that the “libertarians who control
the major Internet firms do not really believe in democracy,” and pins much of
the blame on — who else? — the Koch brothers. But certainly, he’s right that the
old model that enabled content creators to make a living has been smashed to
bits.
In the end, the three books leave us
wondering. Why do good people do bad things? Why do some of those people get
rewarded, while some go to jail? How can we value content in a digital world
where content seemingly has no value? Bozorgmehr writes, “The best questions
have no right answer, no linear sequence of logic or moral clarity, but dance
forever in shifting shades of gray.”
by Bethany
McLean
https://www.strategy-business.com/article/Best-Business-Books-2017-Narratives
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