Whats great about this book is that it will change the way you look at things. Economics, for me, has never been my cup of tea. It is a science much bigger than reaching to Mars, I think. But this book is made for people like me. It is fun reading, all the while using data mining, to prove why things happen as they happen in terms of economics.

“Freakonomics: A Rogue Economist Explores the Hidden Side of Everything” is a book by Steven Levitt (University Of Chicago) and Stephen J. Dubner (New York Times). It proves that economics is not dull all time and not all related to finances most of the times. The book’s topics include:
Chapter 1: Discovering cheating as applied to teachers and sumo wrestlers (See below)
Chapter 2: Information control as applied to the Ku Klux Klan and real-estate agents
Chapter 3: The economics of drug dealing, including the surprisingly low earnings and abject working conditions of crack cocaine dealers
Chapter 4: The controversial role legalized abortion has played in reducing crime
Chapter 5: The negligible effects of good parenting on education
Chapter 6: The socioeconomic patterns of naming children

Authors ask a lot of hilarious questions like: If drug dealers make so much money, why do they still live with their mothers? or Which is more dangerous, a gun or a swimming pool? or Do real estate agents have their clients’ best interests at heart? or What do schoolteachers and sumo wrestlers have in common? or How did the legalization of abortion affect the rate of violent crime?

The book was first published in 2005 and was a best seller, selling more than 3 million copies till now in around 30 languages. For many people, this book is an absurd book. But for me, this has been a “aha” effect book - nice one time read. Wonderful way of looking at things - it surely turns conventional wisdom on its head.

For more, have a look the book’s official site.

For those who have read the book before this one ‘The Goal’, the book must have seemed like a breath of fresh air. Imagine a business novel written in the shape of a gripping novel, and seeking to present the objective (business concepts) in a way that does not put you to sleep - well, that was the way in which ‘The Goal’ was written. And here is the next book in the series. ‘The Goal II - It’s not chance’ takes the story forward from the first book.
Is ‘The Goal’ required reading for ‘The Goal II - It’s not chance’ ? No, you can read the second book without having to read the first book, but the ‘The Goal’ is good enough that you can read it on its own.

The book is written in the same style as the first book. The story is gripping, giving touches of both personal and business examples, and keeps you reading. If compared with ‘The Goal’, the book seems a bit less gripping, but just a bit less. Overall, it is worth reading. I found that you learn most from the book if you re-read it again within a few days of reading it first, since you are able to grasp the power of the concepts more thoroughly.
So while ‘The Goal’ was all about using the Theory of Constraints and associated bottlenecks to the manufacturing arena and how best to build predictability and flexibility to production, ‘The Goal 2: It’s not luck’ takes you to a higher level. The people involved are roughly the same. It’s still Alex Rogo and his team (and his family) who are now all promoted out of the plant that they helped save and have important positions in the conglomerate.
The conglomerate is a diversified one, having a printing business, women’s cosmetics, services and parts, auto products, etc. In this time and age, any expert would recommend that such a diversified group should consolidate; it gets more difficult to hold onto these when these diverse concerns are making losses and dragging down the conglomerate. It is quite logical that board members are pushing to sell them off, it is difficult for Alex Rogo to oppose these measures; the only thing he can do is to get them to be profitable so that either they earn enough to add value or they can be sold as a good profit making entity.
That is the quest of this book; how to use the Thinking Processes to turn around diverse companies - in fact, the idea is to show the strength of the Thinking Processes, which are used to examine conflicting logical arguments, incorporate customer needs and business environment and develop a workable solution that can help take a business from loss to profit, and also be used to solve personal problems ! It seems fairly logical, but there is a weakness as well - you need to get all the concepts and environmental points correct in order to do a good analysis.

This is not a new book. I remember reading it more than a decade back, and then suddenly I caught sight of the book in my office library, and it brought back memories. The book is an incredible piece of writing, and one can expect a great deal of detail, since the authors, Bryan Burrough and John Helyar are investigative reporters and had covered the takeover deal for RJR Nabisco in great detail. The book may seem a bit dated, since it was written in 1990 covering the Leveraged Buyout (LBO) of RJR Nabisco in 2 frantic months of 1988. However, I would argue that anybody who reads this book and is even moderately interested in the working of businesses, takeovers, and most importantly, the CEO’s and boards of companies should read this book.

The book is gripping reading, especially because it desists from going into details into arcane financial details and boring readers (except the ones who get their kicks from too many financial details). Let me re-phrase; the book does not desist from providing financial details and certainly does not try to dumb down how things work, but the way in which the story line is crafted would make this seem like a thriller based on company mergers (and if you did not know this actually happened, you could believe this to be a work of fiction).
For a lot of readers, the stock-market boom of the internet era and the crash-and-doom of 2001 was a major thing, and they would have expected a period in history to be similar. But the fact remains that the 1980’s was also an extra-ordinary period of financial turmoil with 2 great (and very controversial) terms coming to life; the junk-bonds most popularized by the junk-bond king Michael Miliken of the Drexel Burnham Lambert, and the Leveraged Buyout kind of takeover made most popular by a small firm called KKR (Kohlberg Kravis & Roberts).
These came together in a burst of what seemed like a great financial innovation - the Leveraged Buyout. What does LBO mean ? Loosely put, a LBO is used when the executives of a company believe that the company is being under-valued, or they want to make a pitch for the company when it is under hostile attack; and they go in for buying the company outright. They need to raise a bid high enough that shareholders (including the institutions - typically pension funds and others) sell of their shares. However, this requires a massive amount of money, and the net result of this is high debt levels (indeed, in many cases, crippling debt levels where interest payments demand massive cost-cutting). Some companies manage, becoming lean and mean, and in other cases, the whole stack of cards crumble.
Barbarians At The Gate is the story of the LBO launched by the CEO of RJR Nabisco, Ross Johnson, and his battle with the takeover firm, KKR (Kohlberg Kravis and Roberts - the important partners being Henry Kravis and George Roberts). Now KKR was a firm with extremely efficient partners, and the battle between Ross JOhnson and KKR was an epic battle with many rounds of discussion, debate and escalating payoff’s, all being weighed by the board of RJR Nabisco, former friends and partners of Ross JOhnson, and now being the principle representatives of shareholders.
The interesting part of the book is a telling of the history of the companies, main people involved, their ambitions, their motivations and how they plan and scheme to get ahead. The book has what is called the ‘people’ perspective, and you will get a fair idea of what the personal ambitions of a person as ambitious (and ruthless) as Ross Johnson will cost many of the other people involved. However, it also details the variability involved in decision-making, particularly when Ross Johnson did not anticipate anybody else getting involved.
Also, you get to see something evolving in this book that continues to this day, namely the notion of how executive perks have kept on increasing. It is a fair understanding that many shareholders do not know the full level of executive perks, otherwise you would see far more resentment especially when the company is barely plodding along with not much dividend or increase in stock value.
This book is a great read, and I was absolutely hooked after reading it.