Clever Geek Handbook
14 February 2026

Hot, Flat, and Crowded

Recommendation

On the whole, this book resembles a televangelist’s Sunday morning sermon. It is full of passion, action and emotion. The “preacher,” The New York Times columnist Thomas L. Friedman, exhorts a congregation of true believers with a rousing endorsement of their shared faith, hitting all the familiar themes, stories and touchstones, plus a heartfelt environmental alert. Even for nonbelievers, the spectacle is impressive. Friedman is a skilled coiner of phrases and he sure can work a crowd. To judge by the many interviews and conversations referenced in this book, he has gone to great effort to assemble a corpus of evidence in support of his argument. Baldly put, his message is that conventional wisdom about global warming is true: Because of irresponsible consumption, the world faces an environmental catastrophe of unprecedented magnitude. He explains that George W. Bush’s administration was unconscionably negligent in this crisis, that most honest scientists agree something must be done, and that climate change deniers are mostly hirelings in the service of the oil industry or ideological conservatives unwilling to face facts. For any reader reasonably acquainted with the news media, much of what Friedman says, though urgent, will be somewhat familiar. However, BooksInShort notes, he always has a strikingly entertaining and persuasive way of saying it.

Take-Aways

  • Much of the world’s population aspires to the American lifestyle.
  • The world simply doesn’t have enough resources to allow everyone to live the American dream, including Americans.
  • Americans’ addiction to oil harms the environment and props up oil-selling regimes.
  • Global warming and environmental degradation threaten biodiversity and the quality of life.
  • “Energy poverty” leaves 1.6 billion people without access to electricity.
  • The environment is a national security issue.
  • The countries that lead in developing green industries will be at the forefront of economic growth in the new “Energy-Climate Era.”
  • Governments can accelerate necessary change by establishing the right regulatory environments and price signals.
  • Even the Chinese Communist Party has adopted a green agenda.
  • America is at its best when it cooperates in solving global problems.

Summary

Too Much Security

In Istanbul, walls, guard booths, security barriers, and bulletproof doors and windows surround the American Consulate, located roughly 12 miles from downtown. A captured terrorist involved in an attack on the city’s British Consulate told police that his group had scouted the US. Consulate but gave up hope of attacking it. “It was so well guarded they don’t even let birds fly there,” he said.

“The convergence of hot, flat and crowded has created a challenge so daunting that it is impossible to imagine a meaningful solution without America really stepping up.”

America has walled itself off from the rest of the world. It has also walled itself off from rational thinking about such important challenges as global warming. Oil and car companies have had too great a voice in impeding laws and policies that could have made the world a better, cleaner place. Now the US must help the world solve one of history’s gravest crises.

The “Energy-Climate Era”

The world is entering the energy-climate era. Greater global demand is focused on dwindling supplies of resources. Easy oil money is keeping repugnant regimes in power. The climate change, “energy poverty” and species extinctions that threaten biodiversity all require innovative ideas, action and infrastructures. The countries that invent the tools and industries that address these problems will lead the era.

“Later is over.”

The energy-climate era sneaked up on developed nations when they were busy with other things. Their post-World War II policy priority was to prevent World War III. Their goals were to develop their economies, secure human rights and keep the peace. Environmental treaties were something of an afterthought. Now, however, if society does not address the challenges of environmental degradation and global warming, achieving those other goals will be impossible.

The American Lifestyle Gone Global

Demographers estimate that the world’s population may be nine billion people by the middle of this century. Most of this population growth will occur in unstable nations. An impossibly large number of people in these growing populations are drawn to the “American dream” of consumption and convenience, but their growing energy demands and the proliferation of power plants to serve them are accelerating global warming.

“The effects of our way of life on the earth’s climate and biodiversity can no longer be ‘externalized’ or ignored or confined.”

The US lifestyle of private cars and growing consumption has a certain appeal. However, this resource-intensive way of life is unsustainable and physically impossible for everyone on the planet to achieve. The globe simply does not have enough resources to go around. In the 1950s, when President Richard Nixon used kitchen appliances to convince Soviet Premier Nikita Khrushchev that democracy was better than communism, America wanted the rest of the world to adopt its dream. Now, clearly, that would cause global environmental catastrophe. Americans, too, must learn hard restraint.

Energy and Dictatorship

Oil money flows to countries that have oil. This is bad for those countries and for the world. Oil money keeps dictatorial regimes in place, because they don’t need to empower their people. Oil wealth gives them a free pass. Why educate people, encourage entrepreneurship, stimulate innovation and take the risk of the citizenry demanding a voice in the country’s affairs?

“We have been living for far too long on borrowed time and borrowed dimes.”

Consider Russia. President Vladimir Putin turned off the gas tap to Europe to remind Europeans that they are dependent on him. Russia is not powerful because it has industries, skills, knowledge or leadership. It is powerful because Europeans are addicted to its resources.

Petrodollars also help fund terrorism. Saudi Arabia’s Wahhabi Islam is spreading through the Middle East. But, in the same cultural atmosphere, Bahrain has made striking progress toward democracy and women’s rights. Why? Because the decline in its oil supply at the end of 1990s created a “burning platform” for change, though Bahrain was actually the first Gulf state to find and exploit oil. Falling oil prices can help bring similar change to other oil-producing countries. But while demand for oil stays high, so will prices.

The Problem of Poverty

According to World Bank estimates, 1.6 billion people have no access to electricity. That is energy poverty. Lacking electricity, millions cook their food over smoky indoor fires and die from respiratory diseases as a result. Energy poverty is involved in every problem facing the developing world and climate change exacerbates the suffering. Rising energy prices are crippling infrastructure in struggling countries, such as Rwanda. In Bangladesh, the World Bank found that having electricity boosted a family’s income 20% and gave children 35% more study time. “The problem of education is about a teacher shortage – and an energy shortage.”

Strange Weather

Odd things have been happening as a result of changing weather. Montana’s elk descend from the hills much later in the year. The western North American mountains’ snowpacks are declining. Maryland’s daffodils bloom in January. Drought forced both former Australian Prime Minister John Howard and Georgia Governor Sonny Perdue to call on their populations to pray for rain. Warm days come in midwinter. Melting tundra threatens to release billions of tons of carbon, amplifying the greenhouse effect caused by burning fossil fuels. Biodiversity – crucial to human life – is at risk. The biosphere depends on its splendid balance, but species are going extinct before science can even catalogue them, or learn what they are and what they do. There is no time to waste.

The Role of IT

Information technology (IT) can help create an “Energy Internet.” Indeed, tinkerers and garage entrepreneurs are already working on prototypes. Shrewd use of IT could be part of transforming the US’s electrical grid, which dates back to Thomas Edison. It was built to meet the demand for power, but it began fragmented – with authority divided among state regulators – and is still fragmented. The US has more than 3,000 electric utility companies. No wonder there is so little integration. IT could make the grid more intelligent, perhaps by allowing those with solar panels or electric cars to sell surplus electricity back to the grid. According to the McKinsey Global Institute, merely by using more energy-efficient appliances, installing fluorescent light bulbs and insulating their homes, US homeowners could cut the nation’s electricity consumption by a third.

Energy Opportunities

Green living has become fashionable in America, Europe and Israel. Even some Osama bin Laden supporters have lifted their voices to advocate environmentalism. However, support is only easy to find for simple measures. In fact, going green will be a hard road of sacrifices and trade-offs. This means it will require tough political choices. Substantive change is never widely fashionable. It is too controversial and draws too many opponents.

“We wanted everyone to be converted to the American way of life, although we never really thought about the implications. Well, now we know.”

Energy problems are energy opportunities. The green agenda is a red, white and blue agenda. The greening of America can make it stronger. By developing tools and solutions to grapple with the world’s global warming problems, America can position itself in the vanguard of economic leadership in the energy-climate era. By weaning itself from dependence on Gulf oil imports, the US reduces the threat of terrorism. By cooperating with others in pursuit of a better world, America is doing what it does best.

The Role of Economic Policy

Economic policy could also help solve the problems of a hot, flat and crowded world by sending the right price signals, and providing economic incentives for environmentally sound behavior. This tactic has worked in health care and it can work in energy.

“The Energy Internet [could] give us more growth with…better energy efficiency…by smoothing out the peaks and valleys in energy demand.”

When going green is cheaper, better and faster, people will buy green. This doesn’t require a massive, bureaucratic government program; it simply calls for economic incentives that give entrepreneurs a reason to be green. Quite possibly, the best thing would be a green technology bubble. Investors in bubbles may go broke, but they leave useful things behind, such as the railroads, the telegraph and the Internet.

“Congress and the Bush administration count pennies when it comes to building new industries, as if the money for wind, solar and biomass were coming out of their own children’s piggy banks.”

The government’s role is to establish the price signals and the economic playing field – not to carry the ball. In terms of regulation and governmental decision making, the crucial details are boring. However, as environmentists say, “If it isn’t boring, it isn’t green.” Government leaders must understand how to use regulations to promote necessary changes. Regulation can give companies incentives to innovate and compete. For example, regulations establishing emission caps led General Electric Transportation to manufacture energy-efficient, low-emission locomotives, which it now exports worldwide. GE rose to the regulatory challenge. Pollution, after all, is unproductive and wasteful. Companies that reduce waste improve their economic performance.

Winning Wars Greenly

Energy independence is a national security issue and a battlefield security issue. In 2006, a US general in Iraq pointed out that using diesel generators for battlefield power was getting soldiers killed because roadside bombers were targeting the Marines who were transporting the fuel. That spurred the armed forces to work on alternative power. One creative solution was to insulate tents with energy-efficient foam to reduce the electricity needed for air conditioning. The armed forces’ green initiative reduced casualties, cut costs and improved its ability to innovate. Corporate green-innovation initiatives also can generate new products for export and attract valuable talent.

The National Ethic of Environmentalism

Nations must preserve their natural resources. Pollution in China and Indonesia is killing forests and oceans, as overfishing is wiping out food stocks. More than a third of Indonesia’s catch is baby fish; in 2000, baby fish were only 8%. Reversing such trends requires commitments from the public as well as from leaders. People must recognize the personal economic value of preservation. However, this means governments must expand today’s limited efforts to make sure that preservation is in their citizens’ economic interests.

“As an Egyptian cabinet minister remarked...It is like the developed world ate all the hors d’oeuvres, all the entrées and all the desserts and then invited the developing world for a little coffee ‘and asked us to split the whole bill’.”

Under environmental duress, China is moving toward green awareness. In the 1970s and 1980s, the Chinese Communist Party replaced Maoism with a focus on GDP growth. In the 1990s, it began to turn toward greener practices in the face of tremendous problems.

In fact, China may have no alternative to going green. People are choking on Beijing’s air. Pollution is poisoning the nation’s dwindling water supply. Droughts and development are depleting northwestern aquifers. Moreover, green technology exports are making Chinese entrepreneurs rich. Chinese solar power entrepreneur Shi Zhengrong is one of the country’s wealthiest men, according to Forbes.

“Yet they throw money out the window...[on] the old, established, well-capitalized oil, coal and gas industries.”

America could learn from China, but American democracy is a messy process. Chinese leaders can promulgate policies and put them in effect by fiat. Of course, enforcement may be spotty. But wouldn’t it be wonderful if the US could use democracy and consensus to sweep away vested interests in dirty fuel, land-destroying agriculture and industrial pollution? Why should cars, oil and big agriculture reap billions in subsidies while innovative green technology starves for funds?

“Global warming, global flattening and global crowding [are] driving...energy supply and demand, petrodictatorships, climate change, energy poverty and biodiversity loss...well past their tipping points.”

If America starts now and commits, it can make the necessary changes. The green revolution needs the same level of national commitment as the civil rights movement. The government can launch the ship. The same corporations that now obstruct the solutions to environmental problems will get on board when the right regulations and price signals make it in their interest to do so. The country is on another Mayflower, sailing to an undiscovered continent. It’s time to do new things.

About the Author

Three-time Pulitzer Prize-winner Thomas L. Friedman is a foreign affairs columnist for The New York Times, a winner of the National Book Award, and the two-time winner of the Overseas Press Club Award. His books include the bestseller The World Is Flat.

Read summary...
Hot, Flat, and Crowded

Book Hot, Flat, and Crowded

Why the World Needs a Green Revolution – and How We Can Renew Our Global Future

Allen Lane,
 


14 February 2026

The Ascent of Money

Recommendation

Niall Ferguson offers a comprehensive collection of anecdotes and observations about the development of finance. He begins with a brief discussion of pre-money societies. Then, he carries you through the birth of banking in Renaissance Italy, the 18th-century Mississippi and South Sea bubbles, the role of Nathan Mayer Rothschild in the Napoleonic Wars, and the 20th-century transition from the gold standard to free-market derivatives and currency trading. BooksInShort finds Ferguson’s book eminently readable, entertaining and informative. One caveat: the author’s approach is more that of a journalist than a historian, so he does not advance much of a comprehensive theory to explain the events he discusses, even the ones that are still occurring, notably, the financial crisis that began in 2008. This tasty financial history thoroughly covers who, what, when, where and how, a feast of facts with not quite enough “why” for dessert.

Take-Aways

  • Modern credit markets were born in Renaissance-era Italy.
  • Loan sharks and debt slavery flourish in the absence of banks or credit markets.
  • • Today, the bond market is a powerful force; it reflects the judgment of every government’s fiscal and monetary policies.
  • Financial markets inevitably have ups and downs – at best, hope that they will be gentle and gradual.
  • The welfare state insures against many of life’s risks, but at a steep social cost.
  • The quantitative finance experts who led Long-Term Capital Management understood the neat implications of theory, but could not cope with untidy realities.
  • U.S. government support of home ownership helped create the savings and loan crisis in the 1980s and the subprime mortgage crisis in the early 2000s.
  • Before the subprime mortgage crisis, China and America were locked in a strange embrace, with the penurious Chinese lending to the affluent Americans.
  • Human behavior is often irrational. That can make rational analysis dangerous.
  • Finance is an evolutionary arena where creative destruction does useful work.

Summary

The Mountain of Money

Idealists beginning with Karl Marx have excoriated money and the “cash nexus” that they believe threatens human relationships. However, the only societies that existed without money were singularly ill-equipped to survive. Hunter-gatherer cultures lacked money and had remarkably high rates of violent deaths. The Inca Empire had no money, but Francisco Pizarro – who was very interested in money – conquered it almost single-handedly. In Bolivia, he and his men discovered a mountain of silver ore they called Cerro Rico (“rich hill”). They sent tens of thousands of tons of silver back to Spain, which discovered something new and strange: All this money did not make it rich. The increase in the money supply merely led to increased prices. In some ways, Spain’s silver impoverished it by preventing the development of the viable industries and democratic governmental structures that could have helped it fit a changing world.

The Birth of Banking

Meanwhile, in Italy, the Medici played midwife to the distinctly modern institution of banking. There, as elsewhere, people who needed credit had to use high-interest loan sharks who encouraged repayment by cultivating a reputation for violent retaliation. The Medici were gangsters, too, but Giovanni di Bicci de’ Medici set them on the road to grandeur. An astute currency trader, he recognized the benefits of using diversification to lower risk, and helped make the family business a hub of financial and political power.

“When we withdraw banknotes from automated telling machines, or invest portions of our monthly salaries in stocks and bonds, or insure our cars...we are entering into transactions with many historical antecedents.”

Using the Italian model, northern Europeans kept developing new financial institutions. The Amsterdam Exchange Bank was established in 1609 to provide a standard unit of denomination and a system of money transfers. In 1656, Sweden’s Riksbank pioneered credit creation, lending most of its depositors’ funds out and retaining only a small reserve against withdrawals. The Bank of England, established in 1694, eventually monopolized the issuance of bank notes.

The Bond Markets

President Bill Clinton’s campaign manager, James Carville, famously quipped, “I used to think if there was reincarnation, I wanted to come back as the president or the pope or a .400 baseball hitter. But now I want to come back as the bond market. You can intimidate everybody.”

“Though the line of financial history has a saw-tooth quality, its trajectory is unquestionably upwards.”

The bond market is like a daily poll in which investors and traders express how they think their nation’s politicians are doing. They display a negative opinion by sending bond prices down, raising the country’s borrowing costs. In extreme circumstances, politicians may have to choose between refusing to pay (thus losing access to future bond market funds), or funding the payment by cutting services and increasing taxes (thus angering voters). Like banking, the bond market has its roots in Renaissance Italy. Florence fought other city-states using money lent by its citizens, who could buy and sell “bonds” that gave them a right to repayment. Like banking, the bond market was an innovation taken up by the Dutch and the English. This innovation helped credit-worthy Holland free itself from rule by Spain, which was notorious for defaulting on debt.

“Far from making money from Wellington’s victory, the Rothschilds were very nearly ruined by it.”

Finance was a critical source of British strength in the war against Napoleon Bonaparte. Nathan Mayer Rothschild was a bond market genius but, contrary to legend, Waterloo did not help him. Expecting a long war, he accumulated gold reserves, but the victory at Waterloo meant a likely drop in gold. Knowing that, Rothschild started buying British bonds, and continued until 1817, for extraordinary return. Later, during the U.S. Civil War, his family refused to back the South. The resulting financial constraints helped crush the Confederacy.

“Only when borrowers have access to efficient credit networks can they escape from the clutches of loan sharks.”

In the early 20th century, the bond market was a potent global force, and imperial powers were diligent about debt repayment. Rentiers, those who earned interest from government bonds, prospered. However, after World War I, extreme inflation eroded the value of their income stream. John Maynard Keynes once maintained that, to stimulate employment, society should institute inflationary monetary policies even at the cost of “euthanasia of the rentiers.” The 20th century’s subsequent history, including Argentina’s disastrous inflation and financial collapse, put this proposition in a harsh light.

Big Bubbles

Almost since the development of markets, bubbles have appeared and gone through five stages:

  1. “Displacement” – Something in the economy changes and new opportunities appear.
  2. “Euphoria” – Prices move up rapidly. Traders buy to get future increases, which occur because of the extra buying. The results confirm predicted price increases, leading to further buying in anticipation of more price increases, and so on.
  3. “Mania” – Naïve investors hear they can make big money and throw in new cash.
  4. “Distress” – Savvy investors recognize that prices are too high to be sustainable, and start selling for profit while they can. Prices begin to fall.
  5. “Revulsion” – The bubble pops. People sell; the euphoria sequence plays in reverse.
“From a politician’s point of view, the bond market is powerful partly because it passes a daily judgment on the credibility of every government’s fiscal and monetary policies.”

The most notorious bubble in western European history may well have been the Mississippi bubble engineered by gambler and felon John Law. A Scotsman, he managed to become the most important force in the French economy in the early 18th century. Inspired by the example of the Dutch East India Company and its relationship with the Amsterdam Exchange Bank, Law worked to establish a French central bank and a Compagnie d’Occident, or Company of the West. Frenchmen and foreigners could buy shares in exchange for their French debt (issued to fund the Sun King’s wars). France’s public debt thus became stock in a private firm. Meanwhile, the central bank expanded the money supply. Prices of Company of the West stock soared. All the phases of the bubble played out.

“In effect, stock markets hold hourly referendums on the companies whose shares are traded there.”

Note the instructive parallels between Law’s bubble, and the bubble and collapse at the end of the 20th century in the U.S. In both cases, money supply expansion helped drive euphoria. The road through revulsion was rocky and painful. One great lesson of both bubbles is that central bankers’ commitment to sound money can do a lot to prevent bubbles and crashes.

Risk Management

Hurricane Katrina’s devastation of New Orleans in 2005 put insurers in the crosshairs of the “King of Torts,” Richard F. Scruggs. He challenged insurers’ claims that many policyholders in New Orleans and Mississippi were not entitled to loss compensation, because floodwater – not wind, which insurance covered – caused their losses. Scruggs seemed likely to prevail until he was indicted for trying to bribe a judge.

“Longer life is good news for individuals, but it is bad news for the welfare state and the politicians who have to persuade voters to reform it.”

The insurance industry originated in Scotland in the 18th century, when Robert Wallace, Alexander Webster and Colin Maclaurin established a fund for the widows and orphans of clergy. To compute the annual premium, they calculated the death rate of clergymen and the average number of survivors. The fund invested the premiums to buy annuities for the bereft. Insurance let people protect themselves against big losses by accepting small losses in the form of annual premiums. In the 20th century, national governments attempted to shoulder the burden of protecting the elderly against illness and other risks. Eventually, the burden became too great. Now, many nations face the dire prospect of an aging population with greater claims for pensions than their systems can satisfy. State insurance also carries perverse incentives; that is, it discourages personal responsibility and initiative.

Real Estate Investment

Real estate has an undeserved reputation as a safe, sound long-term investment. In the U.S. and the U.K., home ownership is more the rule than the exception. This was not the historical norm. Until the 19th century, most of Britain’s land belonged to aristocrats, who borrowed heavily, using their estates as collateral, and eventually lost their properties to creditors. In the 20th century, widespread home ownership remained rare in the U.K. and the U.S. until the Great Depression. The New Deal’s reforms included a program to expand access to mortgage financing. The Federal Housing Administration set up standardized mortgages and let a secondary market emerge. The Federal National Mortgage Association (Fannie Mae) issued securities to pay for bond purchases. Instead of a national program of public housing, the U.S. embarked on a program of owner-occupied housing, but it was inconsistent and incoherent.

“The Nobel Prize winners had known plenty of mathematics, but not enough history. They had understood the beautiful theory of Planet Finance, but overlooked the messy past of Planet Earth.”

To deal with 1970s inflation levels, monetary authorities raised interest rates, leading indirectly to the savings and loan (S&L) crisis. Higher interest rates had put S&Ls in a squeeze. Regulations required them to pay relatively low interest rates on deposits. Their long-term mortgages also returned relatively low interest rates. When depositors could get better interest elsewhere, they withdrew their S&L deposits. To help S&Ls compete, regulators lifted restrictions so they could invest in higher-returning instruments than fixed-rate mortgages. Scam artists moved in. They could easily attract depositors’ money because the government guaranteed S&L deposits. They could make risky investments, keep the profits if they did well and leave the losses to taxpayers. The higher-returning investments that attracted S&Ls included junk bonds, which were based on the logic of diversification. The idea was that while investing in a single questionable bond might be unsafe, a portfolio of such bonds might provide an attractive overall risk-adjusted return.

“Every shock to the financial system must result in casualties.”

Meanwhile, on Wall Street, traders discovered that they could assemble large pools of mortgages and issue various types of securities against those pools. For example, some investors could buy the rights to the interest portion of a mortgage payment, others to the principal payment. New financial engineering permitted increasingly complex, securitized mortgages. With federal regulators’ encouragement, bankers made loans – the famous subprime mortgages – to people who would never before have qualified. Wall Street securitized and sold the subprime papers. Combined with expansive monetary policy and the early 21st-century real estate bubble, securitized subprime mortgages helped bring about a global financial crisis.

“Financial history is essentially the result of institutional mutation and natural selection.”

Hedge funds were important actors in that crisis. Managing vast pools of capital with little oversight, hedge funds offered extremely generous, even insanely generous, compensation to their managers, who amplified the power of the capital invested with them by borrowing heavily. Some managers became famous or notorious. George Soros, founder of the Quantum Fund, made a highly leveraged bet against the British pound, winning head-to-head against the Bank of England. John Meriwether and his Long-Term Capital Management hedge fund colleagues nearly precipitated a global financial crisis when their highly leveraged quantitative bets went wrong.

“Chimerica”

Globalization advanced in the years prior to World War I. The trade and financial links among countries were so strong many experts thought war was economically impossible. WWI disproved that. The world did not achieve comparable integration until the late 20th century.

“All financial institutions are at the mercy of our innate inclination to veer from euphoria to despondency; our recurrent inability to protect ourselves against ‘tail risk’; our perennial failure to learn from history.”

The emergence of China’s market economy is one of recent history’s most momentous developments. Paradoxically, credit extended by the impoverished Chinese let Americans purchase vast quantities of Chinese goods. This kept Chinese factories humming, let U.S. monetary authorities keep interest rates low and allowed U.S. companies sourcing in China to report high profits. The subprime mortgage crisis, among other things, threw that tidy arrangement into disarray. Thus, one lesson of the early 21st century is that globalization is fragile, no matter how far advanced it seems. Theoretically, the current relationship between China and America parallels the relationship between Britain and Germany in the early 20th century.

“Financial markets are like the mirror of mankind…It is not the fault of the mirror if it reflects our blemishes as clearly as our beauty.”

The ascent of money has been a long evolutionary process, neither predictable nor rational. Human behavior and psychology are surprising. Financial practices and institutions mutate in response to the surprises, regulators introduce new environments that favor even newer mutations and so the process continues.

About the Author

Niall Ferguson is Laurence A. Tisch professor of history at Harvard University, senior research fellow of Jesus College, Oxford University, and a senior fellow of the Hoover Institution, Stanford University. His books include Paper and Iron, The House of Rothschild, The Pity of War, The Cash Nexus, Empire, Colossus and The War of the World.

Read summary...
The Ascent of Money

Book The Ascent of Money

A Financial History of the World

Penguin Books,
 


14 February 2026

Outliers

Recommendation

Malcolm Gladwell writes so well that this book seems to race along, and even to be more persuasive than the evidence he presents might cover. He does a great job of challenging existing notions of where success comes from, and of proposing new models to account for social context and various mitigating factors. He points out many details governing success that often go unnoticed, and provides potential routes for social change and professional excellence. As lovely as it is, Outliers isn’t perfect – it might have been nice to see Gladwell tackle successful people who really don’t fit his model or fields where it doesn’t quite apply – but it is original, useful and fun. BooksInShort recommends it to readers who are interested in fresh thinking, in understanding broad social trends or in finding talented individuals who have slipped through the cracks.

Take-Aways

  • The common model of success only tells half the story.
  • The people who become really good at something put in 10,000 hours of practice.
  • Genius alone is not enough. You must pair it with practical intelligence.
  • Intelligence is a threshold: You need to be sufficiently smart to succeed. Beyond that, intelligence has little impact on your ultimate achievement.
  • When you personalize success, you overlook important social and cultural factors.
  • Family background shapes practical intelligence and strongly influences success.
  • Your regional, cultural and ethnic backgrounds affect how you respond to conflict and crisis, and how you communicate.
  • This impact continues long after you have moved away from such roots.
  • A culture’s agricultural traditions shape how its members view education, work and concentration long after they leave their farms.
  • If you identify the cultural factors that govern success in a particular area, you can teach them to more people.

Summary

What Is the Secret of Success?

People who succeed must work hard, but lots of people work hard and don’t succeed. So stars must have some distinct talent or gift, right? They must be special somehow. That’s the common explanation of why some people do well and others don’t – and it is wrong or, at least, it tells only part of the story. In leaving out the other elements of success, this old model dangerously distorts reality. It personalizes a process that, while personal, is also social and cultural. It thus leaves people looking for talent in the wrong places.

“This is a book about outliers, about men and women who do things that are out of the ordinary.”

Take the Canadian Hockey League. Its late-teenage athletes are superb players. They’re fit and talented, and many turn professional. However, though they all pour out endless energy to reach the top, that’s only half the story. The other half is found in what biologists call the “ecology” of a specific living thing. A tall oak tree standing in the forest didn’t just come from a good acorn; that acorn also landed in the right place, on good soil with no other trees blocking the sun, and so on. Likewise, these athletes are superior, in part, because of their work and gifts, and, in part, because of the intersection of random chance and an arbitrary social choice.

“Extraordinary achievement is less about talent than it is about opportunity.”

The date that demarcates athletes in the top Canadian hockey leagues is January 1. An overwhelming percentage of champions are born in the first few months of the year. Scant months make a big difference in a child’s development, so when kids with birthdays early in the year begin to compete, they are already larger, more coordinated and more promising than those born later the same year. Thus, they get singled out early as having more potential. They receive more coaching and more time on the ice. As a result, they become better hockey players than slightly younger kids. Adults focus resources on them early in their development, but it isn’t their talent that gets rewarded; it is their birth dates. To balance this, and to harvest any genuine talent, it might be better to have two hockey systems. The same holds for schools. Rather than grouping kids by age beside older peers, thus creating an uneven playing field, make two or more tracks.

“Because we so profoundly personalize success, we miss opportunities to lift others onto the top rung.”

This early selection process matters greatly because of a second factor that determines superior performance – amount of practice time. If you track a group of potential professionals in an area such as music from childhood through adulthood, a marked pattern emerges: Their final status depends on how much they practice. Strong amateurs accumulate about 2,000 hours of practice by adulthood. Future music teachers build up about 4,000 hours. Really good students amass about 8,000 hours and “elite performers” invest about 10,000 hours of practice. This 10,000-hour marker carries over to other fields, such as sports, the arts and even technical training, like computer programming. People who have dominated the computer world, such as Bill Joy, who rewrote UNIX and Java, put in parallel practice time. That’s what carried Joy to stunning computer feats. But it wasn’t dedication alone that let him succeed; it was also the right situation.

“The idea that excellence at performing a complex task requires a critical minimum level of practice surfaces again and again in studies of expertise.”

In the 1970s, Joy attended the University of Michigan – one of the few places in the U.S. at the time with the resources to let many people practice programming at once. Joy didn’t go to Michigan to study computers; he stumbled across the computer center by accident. But, once he did, he could program round the clock, due to access and to a glitch in the system that let students get more than their allotted computer time. Bill Gates had similar luck; he was bright and talented with computers, but he also attended a Seattle private school that had a computer club in the 1960s, and he could “steal” time on the computers of a nearby university.

“The idea that IQ has a threshold, I realize, goes against our intuition.”

For such an incredible tally of time, effort and proximity to pay off, the larger context still has to work. The 75 richest people who ever lived include individuals from across history’s span, but nearly 20% of them come from “a single generation in a single country”: the mid-19th century in the U.S. John D. Rockefeller, Andrew Carnegie, Jay Gould and more became so rich because they were born at just the right time to take advantage of the American economic explosion. You’ll find a similar age grouping for Gates, Joy and other major tech players: Gates was born in 1955, Joy in 1954, Paul Allen in 1953, Steve Ballmer in 1956 and Steve Jobs in 1955. They shaped their field because they entered it at the right time: early enough to have a major impact, but late enough to get practice time on computers after the early days of punch cards.

“The particular skill that allows you to talk your way out of a murder rap, or convince your professor to move you from the morning to the afternoon section, is what the psychologist Robert Sternberg calls ‘practical intelligence’.”

This historical positioning is rarely conscious and it doesn’t necessarily seem like a good thing at the time. It can happen accidentally, even via negative social forces, and still produce striking success. Take Harvard Law graduate Joseph Flom. When he started, he was one of the few grads who could not get hired. He was “ungainly, awkward, a fat kid” and Jewish, at a time when the New York legal establishment was made up of socially graceful WASPs who all knew one another. Excluded from white glove firms, Flom and two partners started their own firm and handled whatever cases came to them. One kind of case got referred to them specifically because Flom was Jewish and, thus, at the time, an outsider to his profession. Established firms didn’t want to touch the harsher edges of corporate law, like takeovers involving ugly proxy battles, so they shunted such cases to Flom. When the business climate shifted and takeovers became common, Flom was already an expert, with far more experience in the field than his competitors, and far less emotional investment in maintaining good personal relations with other lawyers (who had already excluded him). Demand for his legal services boomed and he prospered.

Genius Is Not Enough

When Christopher Langan won $250,000 on a quiz show called 1 VS. 100, he became famous for his staggering IQ, said to be “too high to be accurately measured.” Langan’s childhood intellectual accomplishments were stunning. He talked at six months old, taught himself to read by age three, read Principia Mathematica at 16 and “got a perfect score on his SAT, even though he fell asleep” during the exam. Nevertheless, he achieved little success until he won the quiz show – because pure intellectual genius alone is not enough. It must be paired with “practical intelligence,” which Langan’s life had systematically omitted. His mother was isolated from her family and had four sons, each by a different man. Langan’s father was an abusive alcoholic. Langan lost his first college scholarship because he was a social misfit, and car trouble kept him from his classes at Montana State. He raked clams, worked in factories and took jobs as a bouncer at bars. He never really used his intelligence professionally.

“Autonomy, complexity and a connection between effort and reward – are, most people agree, the three qualities that work has to have if it is to be satisfying.”

Robert Oppenheimer provides a vivid counterexample of what happens when practical intelligence and genius are combined. Like Langan, he demonstrated his intelligence at an early age, conducting science experiments by third grade, and speaking Latin and Greek by age nine. He, too, ran into self-created trouble at college: Gripped by serious depression, he planned to kill his adviser! Langan dropped out of college due to a dead car and social differences, but Oppenheimer was merely put on probation for planning a homicide. The difference was Oppenheimer’s practical intelligence. At ease with social norms, he could talk his way into opportunities, in large part, due to his background. His family placed him in special schools that gave him extra attention when he showed his potential. They praised his interests and gave him the sense that he would rise to the top, which he did as a physicist. These men illustrate what formal long-term studies of high IQ individuals have shown: Family background markedly influences success, even for a genius. To succeed, brilliant people need praise for their intellectual gains, guidance through human society’s complexities and practicality.

The Social Roots of Conflict and Math Ability

For years, deadly family feuds disrupted life in Harlan County, Kentucky. Sons and cousins killed cousins and sons, as their fathers had killed other fathers. Facing violence bravely and accepting feuds as part of life became integral to Appalachian culture – but why there to such an intense degree? The answer resides in the origins of the British immigrants who came to Harlan County in 1819. They brought a “culture of honor” that required a man to respond violently to threats, insults and economic pressure.

“The plain truth of the [Lewis] Terman study, however, is that in the end almost none of the genius children from the lowest social and economic class ended up making a name for themselves.”

Such cultures turn out to be common in rocky areas where herding is pivotal. The shepherd lives at risk, and must act quickly and in isolation to protect his livelihood. This is unlike farming, which depends on community involvement. In herding cultures, a single insult might define a man’s character, so he must respond to it. Such characteristics carry over into regional cultures, long after their roots are forgotten. Men from America’s South, where the heritage includes a culture of honor, are more likely to be gracious on first meeting – but also likelier to respond to an insult with violent anger – than U.S. northerners, even if both have long lived far from their home regions.

“What if coming from a culture shaped by the demands of growing rice also makes you better at math?”

In another example, Asian superiority in math has clear cultural roots. Asians have linguistic advantages. The Chinese words for numbers are shorter than the English words, thus easier to process quickly. Japan, Korea and China’s counting system is more logical, too; rather than using new words for numbers greater than ten, it makes combinations: “Eleven is ten-one. Twelve is ten-two.” Thus, adding and subtracting are almost automatic: Say the words and you add them. Some Asian mathematical superiority comes, surprisingly, from historical contrasts between Asian agriculture, especially rice growing, and European farming. In 18th-century Europe, peasants worked hard in the spring to plant their fields, worked somewhat hard in the summer to weed them and labored hard again to harvest in the fall. They were sometimes idle in the winter and had many days off because of how the plants grew. By contrast, rice farming took regular, extremely hard work. Asian peasants had to prepare rice paddies with an established, constantly monitored water flow. Rice crops were timed for two annual yields from the same fields. Farmers could choose among a much larger array of seeds, switching strains of rice from one planting to another. This produced a deeply ingrained cultural predisposition toward working very long hours while maintaining focused attention on multiple factors: exactly what you need to master math.

In the Air

Social influences affect individual actions even in the specific field of commercial plane crashes. Commercial airliners are mature machines with highly dependable technology, so accidents don’t happen because a plane suddenly bursts into flames. Instead, they happen because pilots encounter complications, like bad weather, in situations where one mistake happens, then another, then another. In fact, “the typical accident involves seven consecutive human errors,” stemming not from lack of flying skill, but from stress, poor communication and the crew’s social morés.

“Our ability to succeed at what we do is powerfully bound up with where we’re from, and being a good pilot and coming from a high-power distance culture is a difficult mix.”

National cultures differ in several relevant traits, for example, the “Power Distance Index.” The more a “culture values and respects authority,” the less likely its members are to challenge their superiors or to tell them unpleasant information (e.g., that a crash is impending). Cultures also differ in how independent they expect their members to be. Some cultures expect people to align with the group; others expect members to be “highly individualistic.” In certain contexts, like a stress-filled, error-ridden plane cabin, members of individualistic cultures function better at focusing attention on missed information. As a result, crews from hierarchical, group-focused nations (e.g., Korea) are more likely to crash planes than those from other nations, unless specialized training counters these cultural influences. Thus, once businesses recognize that many of the factors determining performance are cultural, they can develop training programs to reshape cultural habits and generate greater success. Korean Air did so when it asked consultant David Greenberg to retrain its crews. He taught the crew members English to help lighten “the heavy weight of their country’s cultural legacy.” He also taught them new attitudes about hierarchy, and showed that it was possible for them to be “re-normed.”

“Virtually every success story we’ve seen in this book so far involves someone or some group working harder than their peers.”

The Knowledge Is Power Program (KIPP) in New York is attempting a similar revision of cultural norms. To improve low-income students’ education, KIPP teaches some of the cultural practices that help middle-class students succeed academically. One “protocol,” called “SSLANT,” stands for “smile, sit up, listen, ask questions, nod when being spoken to and track with your eyes.” KIPP also extends the school day, week and year. These actions address a socioeconomic reality: Outside school, middle- and upper-class kids are more intellectually active. Various activities stimulate their minds over vacations and on weekends, when lower class kids lose ground. KIPP asks a lot of its students and challenges long-standing educational models, but it also produces superior results, giving students who were performing badly a much better chance at academic success.

About the Author

Malcolm Gladwell writes for The New Yorker, and is author of The Tipping Point and Blink.

Read summary...
Outliers

Book Outliers

The Story of Success

Allen Lane,
 



All Articles
Load More