Interview: Jay Taylor - The Generalissimo: Chiang Kai-Shek

The Generalissimo: Chiang Kai-shek and the Struggle for Modern China by Jay Taylor

I have heard a lot of good things about this book. Arthur Waldron when reviewing The Generalissimo wrote: "Now at last we have a good biography of Chiang Kai-shek, one of the most important figures in modern China, but also one of the least understood and most regularly caricatured." Waldron continues saying "Taylor’s book is a magnificent achievement" and "very good reading." I have this book on my bookshelf. I bought it over the summer. I have paged through it a bit and seem to prefer it to Jonathan Fenby's earlier account Chiang Kai Shek: China's Generalissimo and the Nation He Lost. No doubt Chiang Kai-shek is a significant historical 20th century figure. I am looking forward to reading Taylor's account. In the meantime, I found an interview with Jay Taylor, the author of The Generalissimo. You can watch the interview below and it is posted on YouTube.

Buy from Amazon @ The Generalissimo: Chiang Kai-shek and the Struggle for Modern China (Belknap Press)

New Purchase: Asian to Global Crisis - Sheng

From Asian to Global Financial Crisis by Andrew Sheng

I just picked up a copy of this book today at PageOne in Taipei 101. Am looking to try to understand the current financial crisis we currently find ourselves in. The book looks like a pretty detailed account by a central banker in HK who was in the middle of the Asian financial crisis way back in 1997. I remember when I first came to Taiwan to teach English at the end of 19998 many teachers had fled Korea due to the currency collapse at that time. It seems so long ago though now and seems to have been swept aside in terms of people memories as to what caused it and where it came from. I decided to buy the book as it seems to link the gap between the crisis then and the crisis now and will hopefully help to explain how the crisis developed and grew. Sadly though this is on the back of a long list of books I am currently catching up on (and some of them are pretty lengthy). Hopefully I can get to this one in a month or so. I am looking forward to it. Should be a good read.

You can read the first chapter on at the Amazon.com prodcut page linked below.

Buy from Amazon @ From Asian to Global Financial Crisis: An Asian Regulator's View of Unfettered Finance in the 1990s and 2000s

Lords of Finance - Ahamed

The Lords of Finance by Liaquat Ahamed - 5/5

The Lords of Finance tracks the history of the world’s four most influential bankers during the inter-war period from 1918 to 1939. The book gives a good introduction to each banker, explores their background, how they rose to their position and attempts to identify the motivations for their policies and decisions. Each central banker no doubt made serious misjudgments at the time and it was these misjudgments (which mostly revolved around the gold standard and the flow of gold between nations) that led to the great depression. Ahamed is careful to explain how the gold standard operated; the reasons and credit policies that influenced the flow of gold into and out of each country, why the possession of gold was so critical to each country and how this affected currency strength and the greater economy. The easily understood explanations of the complexities of global finance, macroeconomics and the insights into the mystical world of central banking are indeed the greatest strengths of this book. The other amazing revelations in The Lords of Finance are how the arrogance and egos of a small group of men precipitated one of the greatest financial catastrophes of all time that had severe and lasting consequences.

Ahamed starts by introducing each of the four main protagonists: Montagu Norman, Benjamin Strong, Hjalmar Schacht and Émile Moreau. Each chapter is a colorful introduction to the lives of each man: their ambition, their personality, their background, their emotional makeup, their frailties and the significant events in their lives that influenced their decision making processes throughout their careers. Throughout these chapters (and indeed throughout the book) Ahamed introduces many supporting characters (e.g. Maynard Keynes) and at each point is careful to provide color and purpose to each person’s life enabling the reader to connect with each character no matter how big or insignificant and makes the world of finance seem a little more human.

The book moves on to look at the catastrophe of the reparations demanded by the allies after the fall of Germany, the idiotic egos and the ignorance that demanded Germany pay exorbitant reparations after World War 1. The collapse of the German economy and the hyperinflation that nearly bankrupted the country and how this affected Europe and the people of Germany at the time and how countries such as England and the US were unable to assist Germany because the central banker at the time, while being a well intentioned man, was clearly not sufficiently educated. Ahamed also looks at the economic conditions in America during the roaring 20s and the stagnation of the UK economy at the same time. Ahamed is careful to outline how each country returned to the gold standard in their own time and how this decision led to France becoming the premier economy in Europe. He then traces how returning to the gold standard at pre-war rates continued to deflate and depress the UK economy. Ahamed also outlines how the flow of gold into the US led to easy credit and how the rapid bubble that grew in the US stock market and how the New York fed and the US Treasury were at odds with each other as to how to control the bubble. The book then documents the sudden collapse of the stock market in New York, the collapse of banks in Europe and the global implications of the depression in the 1930s and how the only way countries could come out of it was to come back off the gold standard. Of course, Ahamed is also careful to note how the collapsing economy in Germany led to the rise of Hitler in Germany and of course, the consequences of Hitler’s rise are known to all.

Ahamed spends much of the book detailing the reasons why the bankers all wanted to return to the gold standard. According to him this was almost a theological necessity for them. They didn’t have any other way of thinking about money. Money needed to have a base from which it could derive its own value and not be assigned value by fiat. For the bankers this was the only alternative. Of course Ahamed is quick to note Keynes’ criticism of the UKs return to gold and throughout the book lauds Keynes for his insights and in the way Keynes always seemed to get things right on issues like reparations and the gold standard.

Ahamed’s book is highly relevant in today’s world. Reading through some of the events that led up to the great depression is like reading a newspaper on the credit crunch that crushed the world in 2007 & 2008 and that led to the collapse of Lehman Brothers and Bear Sterns. Ahamed admits that the release of his book during the latest financial crisis was serendipitous. It’s a wonderful read, highly recommended and extremely relevant in today’s world. The best way to sum up the work of the four bankers described in the book and what they achieved would be to quote Montagu Normans diary from the book: “As I look back, it now seems that, with all the thought and work and good intentions, which we provided, we achieved absolutely nothing…nothing that I did, and very little that old Ben did internationally produced any good effect – or indeed any effect alt all except that we collected money from a lot of poor devils and gave it over to the four winds.”

Buy from Amazon @ Lords of Finance: 1929, The Great Depression, and the Bankers who Broke the World

Speech: Martin Wolf - Globalization

Why Globalization Works by Martin Wolf - 4/5

I read this book last year. It is an elightening overview of the issues that surround globalization and the consequences of liberal economies and democracies. The concepts are interesting with Wolf arguing that the world now is not as globalized as the late 19th century world. He gave a talk at Yale Unviversity on the issue. I have embedded the speech below which outlines some of the themes in the book. My review is @ Why Globalization Works - Wolf

The speech is pretty good and well worth the watch. At 84 minutes though it is long so its good to listen to at work. Unless you really want to see his slides. It is interesting to note that the Professor who introduces Wolf says that Wolf's book on the topic is the best book that has been written on the topic to date and has even made it required reading for one of his courses. I viewed it more as a laymans introduction to the topic. I know students will be able to benefit greatly from it, especially those who wish to move into a career in macro-economics.

Would love to know your thoughts. Comment is free.

Buy from Amazon @ Why Globalization Works (Yale Nota Bene)

Taliban - Rashid

Taliban by Ahmed Rashid - 5/5

Ahmed Rashid’s “Taliban” is a carefully constructed account of what was once one of the world’s most mysterious terror organizations. Although nearly 10 years old, “Taliban” is still essential reading for anyone interested in the current conflict in Afghanistan, the growing Taliban insurgency in Pakistan and to understand the origin of the current forces that may one day destabilize the whole central Asian region. Rashid’s remarkable book is a clear account of all aspects of the Taliban including their rise, their theological underpinnings, their drug finance, the interplay between the different tribal groups and the wider regional implications in Central Asia caused by the conflict between the Taliban and the other groups in Afghanistan.

The initial chapters of “Taliban” provide a comprehensive overview of the tribal structures present in Afghanistan and the historical context in which the Taliban became a powerfully militarized political force is thoroughly explored. “Taliban” also notes the involvement of the Pakistan intelligence agency in the rise of the Taliban and notes that the rise of an organization such as the Taliban could have been avoided if Afghanistan was not forgotten after the Soviet retreat. Rashid looks at all the main protagonists in the post-Soviet civil war and gives clear and horrifying accounts of the struggle for Kabul and numerous massacres that occurred during the ascendancy of the Taliban. He also provides enough color to understand the different ethnic groups that make up the population of Afghanistan (Pashtuns/non-Pashtuns) and carefully outlines their wider strategic influences and systems of support. He shows how the Pakistan intelligence services supported the Taliban to enable Pakistan to develop strategic depth in the region to protect them from their old enemy India.

One of the most powerful aspects of Rashid’s account is the compassion he has for the Afghan people. His concern for the Afghan people and their circumstance is clear throughout the book. For example he argues that many of the Taliban fighters were dispossessed orphans raised in refugee camps in Pakistan and educated in Madrassa run by semi-literate teachers. Rashid writes: “Children were caught up in the war on a greater scale than in any other civil conflict in the world. All the warlords had used boy soldiers, some as young as 12 year old, and many were orphans with no hope of having a family, an education or a job except soldiering. The Taliban with their linkages to the Pakistan madrassas encouraged thousands of children to enlist and fight.” This is not to say that Rashid agrees with the path chosen, merely that he understands what has driven these orphans into the arms of the Taliban and other militarized warlords.

Rashid also writes compassionately about the women of Afghanistan calling them the vanished gender. He has a deep sympathy for the women who worked hard to build a life with scarce resources in post-Soviet Afghanistan only to have it taken all away from them with the rise of the Taliban. Rashid writes that many women are widows and the sole breadwinners in their family. Not being able to work when the Taliban came to power meant that they were unable to provide for their families. He also documents anecdotal stories of women he knew in Afghanistan that had left to find work and opportunity elsewhere.

Overall Rashid’s account is a very balanced view of the Taliban and the environment out of which they grew and should be recommended reading. Rashid has long covered Afghanistan long before the 911 attacks on the twin towers (indeed the first edition of this book was published before that fateful day) and has lived and walked among the Afghan people for a long time. Many others have since written accounts of the Taliban but I doubt they are as intimate or as knowledgeable as Rashid who clearly has a deep, intimate understanding of Afghanistan and the region at large.

I do agree with Rashid: the U.S. and western powers should not have abandoned Afghanistan after the Soviet withdrawal. I agree that the resultant leadership vacuum led to the rise of the Taliban and that this could have been prevented by helping to redevelop the infrastructure and not leave Afghanistan to its own devices. However, I do believe that this is looking at global politics and international affairs in isolation and that at the time the Russians left Afghanistan Eastern Europe was falling apart and Yugoslavia was being divided, China was emerging from its “long march into the night” and massacred students in Tiananmen square, Africa had huge political changes (for example South Africa’s war with Angola was coming to an end). There is no doubt that America could have done more in the aftermath of the Soviet withdrawal, and it is easy, with hindsight, for people to argue that this was the most critical foreign policy issue facing the US at the time, but did it really appear that way at the time? Maybe it did, maybe it didn’t but yes, the fact remains, the failure to aid the development of Afghanistan by developing infrastructure and an economy lead to the rise of the Taliban and the horrors that have been visited on that country and the world at large since then.

All in all an excellent and important read for anyone interested in Afghanistan, central Asia or the United States’ decade long war in the region.

By from Amazon @ Taliban: Militant Islam, Oil and Fundamentalism in Central Asia, Second Edition

Rogue Trader - Leeson

Rogue Trader by Nick Leeson - 4 out of 5

Rogue Trader is a well written, fast paced, intimate first hand apologetic of Nicky Leeson's dealings on the Simex trading floor in Singapore and how he managed to run up huge losses to the tune of £600 million without anyone noticing and breaking one of England's oldest merchant banks. In a world where Jerome Kerviel loses EUR4.9 billion on unauthorized trades of EUR49 billion for Société Générale , Bernie Madoff runs a US$50 billion Ponzi scheme, where Lehman Brothers no longer exists and AIG is bailed out by the US government for US$180 billion, the "small" affair of losing £600 million in unapproved futures trades and options gambling doesn't seem so terrible, but it was enough to break one of the oldest merchant banks in the UK and create one of the hugest scandals in banking history at the time. Since Leeson broke Barings, many other financial catastrophes and corporate scandals (Long Term Capital Management, Enron, the dot com bubble and sub-prime mortgages to name a few) have come and gone and some remain with us today. Perhaps these events make Rogue Trader even more relevant today than ever.

It seems ironic that in this account of his misdeeds Mr. Leeson comes across as being incredibly honest about his fraud and his crimes. He doesn't shy away from the things he did and admits that he, and he alone is to blame for the catastrophe that befell Barings. He offers excuses (loyalty to the team, covering up their mistakes etc.) but ultimately the book is clear: once the initial deficit in the famed 88888 error account was cleared, greed to generate large profits on a risky futures spread led to the spiraling effect that eventually accrued severe losses for Barings and finally led to their downfall.

Mr. Leeson's account is also clear about the failings in the system and clear on what could have been done to prevent the losses he had accrued over the time he was doing it. I suppose it is easy in retrospect to question why someone would so easily transfer the tens of millions of pounds on a daily basis to cover margin calls, when the capital base of the bank was only a couple of hundred million. It is also hard to believe how it was possible for him to cover his tracks with lies about unauthorized over the counter deals without those deals being properly audited and investigated. Certainly the blame for the high-risk trading falls squarely on Mr. Leeson's shoulders. He doesn't shy away from it and doesn't hide from it, but there were clearly severe structural faults within the bank and no effective risk-management methodologies employed to ensure honesty in the traders and especially to grant oversight to Mr. Leeson. The greatest weakness in the system was Mr. Leeson being granted the right to manage the trading floor and the back office where trades where reconciled. He even admitted this was open to being corrupted and auditors even noted this was a structural weakness, but they never did close the hole. These structural flaws were noted in the book and as per Mr. Leeson, when reports were released by the Singaporean government, many of these flaws were exposed and blame spread across the board for failure to take note of what was going on.

Rogue Trader also has its tender moments. There is no doubt that Mr. Leeson was deeply in love with his wife at the time and there is no doubt that when they were on the run in Malaysia and Brunei there seemed to be genuine affection and love. Mr. Leeson speaks very highly of Lisa and even though they have since divorced, Rogue Trader shows the affection and passion he had for her and she had for him. Some of the moments they shared were truly touching and should not be second guessed. His portrayal of their relationship was an honest one and never, throughout the book is there a bad word said about Lisa (not that I can remember anyway). He truly loved her and she was in my mind amazing to stand by him through the initial troubles and trials he had to endure.

Rogue Trader is therefore a very personal, very real and very honest account of what happened and what caused the bank to crash. Some parts are amusing, others tragic. It is still a fantastic read 15 years after the fact. Since this book was published, Mr. Leeson has served his time in a Singaporean prison, survived colon cancer, remarried, has written a second book and is now the CEO of a football club. In Rogue Trader Mr. Leeson portrays himself as someone who was haunted by his shadows and who was relieved when they were exposed so he could once again walk in the light. Others who failed to provide proper oversight, could not. Some of those protagonists have reignited their careers (e.g. Peter Norris who was the head of Barings Investment Division is now chairman of the Virgin Group) but many did not. Mr. Leeson, as he says in public talks, will always be remembered as the man who broke Barings Bank, but he has moved on with his life and I for one am glad for him.

Stalingrad - Beevor

Stalingrad: The Fateful Siege: 1942-1943 by Anthony Beevor - 4/5

Beevor's Stalingrad is a powerful history of one of the biggest battles in history. He writes in a clear and logical way that reveals the full horror and tragedy of Stalingrad. His work strives to understand the human element and suffering on both sides of the battle and simultaneously effectively lays out the strategic and tactical elements of the commanders and the sheer insanity of Stalin and Hitler. His empathetic look at the conditions of the German soldiers and POWs in the final chapters of the book is a powerful reminder that war is not about valour and bravery but about death and suffering. And death and suffering is not only reserved for the losers, but also the victors as Beevor also explores the suffering of the Russians and their tremendous sacrifice.

Beevor begins his narrative at the beginning of Operation Barbarossa and the German progress to the gates of Moscow in the winter of 1941. He then follows the German retreat from Moscow and explores the rationale and the initial strategic goals of Operation Blue, the German plan to take over the oil fields in the Caucasus. He is quick to point out that the initial strategic goal of Operation Blue was not to hold Stalingrad but to destroy the manufacturing in the city and then aim for the oil fields. Beevor follows the rapid progression of the German Sixth Army across the Russian Steppe, over the River Don, to the gates of Stalingrad. He then documents in detail the defence of the city and the Russian struggle to prevent the Germans from crossing the Volga. Beevor then follows the Russian plan to liberate the city with Operation Uranus and Operation Little Saturn.

The power of Beevor's history is not the tactical and strategic understanding of the Battle of Stalingrad, but rather the human element involved. Beevor does not spare us from the details of the suffering and bravery on either side of the conflict, and the sheer cruelty and recklessness of the officers and the leaders involved. One of the most poignant anecdotes is the story of how a group of young Russian soldiers were sent out against a Panzer division without a single weapon between them. Of course their officer was drunk. The sheer reckless waste of life on the part of the Russians is shocking. And the willingness of Hitler and Stalin is a strong reminder of the folly of dictatorships and the abuse of power. Beevor is right to blame a lot of the wasted life on the shoulders of the leaders.

Beevor does try to help the reader understand the perspective of the soldiers on the ground and their undying faith in their leaders (although not all of them had the same belief as many betrayed their country and were executed). Even when all hope was lost, the German soldiers still believed in Hitler's promise that they would be saved and that a rescue was imminent. Even when Hitler was planning to sacrifice them as their was no realistic hope of victory.

Beevor also has strong opinions about the unimaginative and non-proactive approach the German Commander Paulus. He argues powerfully that Paulus was a good staff officer but not a battle group commander and squarely lays the blame on his shoulders for not preparing better when the Germans were being surrounded by the Russians. Beevor argues that Paulus should have prepared a Panzer division to enable them to breakout from the encirclement and should have been willing to disobey Hitler and breakout before it was too late. Beevor argues that Paulus would follow commands but never take the initiative to lead. It should be said however that Beevor redeems Paulus at the end when he argues that Paulus agreed to sign Soviet propaganda to encourage German soldiers to surrender so as to prevent the wasteful loss of life in a lost cause at the end of the War.

Still Beevor's most compelling writing is describing the hospital conditions and the suffering of the German's and Russians after the surrender of Stalingrad. His haunting descriptions of the hospitals, the hunger, the louse ridden bodies, the typhus, the dysentery and death by starvation among other things are powerful descriptions of what these men had to face. Of course the officers in the German command were given luxury quarters, but the grunts on the ground were sent off on cruel death marches into ill equipped, badly run prison camps. Yet Beevor does acknowledge that some Russians did help the Germans when they could.

Although Beevor looks at the long term implications of Stalingrad, I feel he rushed it at the end and that the far reaching implications of this battle could have been explored in greater depth, their effect on the German military, its implications for the fall of the Third Reich and the separation of Europe. I felt he kind of rushed the ending and that he could've added a little more. Despite this, it is a stunning book.

Stalingrad is a top-class laymen's history of an epic and important battle in World War 2. It turned the tide and the fortunes of the Allies and started the mighty push back of the Third Reich. It is worth the read, especially if you are interested in the Eastern Front and are looking for a beginner book on the topic. I do highly recommend Beevor's history and hope that no one ever has to go through such a horror ever again, but I do believe that is an idealistic and naïve hope.