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laurens van den muyzenberg "laurens" (Villa Lama, Super Cannes, 06220 Vallauris Golfe-Juan.)

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Volcker: The Triumph of Persistence
Volcker: The Triumph of Persistence
by William L. Silber
Edition: Hardcover
Price: £14.35

5.0 out of 5 stars Paul Volcker's warning: "My soul will haunt you.", 14 Dec 2014
The sub title "Triumph of persistence", refers to the adoption of the "Volcker rule." Volcker said, "The problem to day is to look ahead and anticipate. And I tell you, sure as I am sitting here, that if banking institutions are protected by the tax payer, and they are given free reign to speculate, I may not live long enough to see the crisis, but my soul is going to come back and haunt you." (Page 284).

The Volcker rule is 71 pages long with an additional 850 page preamble and is part of the Dodd-Frank act that in 2010 covered 3400 pages and since that time has grown to more than 10.000 pages and is still not final. One can wonder how employees can figure out what is allowed and what is not and for government supervisors to determine if the rules are adhered to. The Volcker rule is based on the right intention but the implementation must be very difficult, might even be impossible.

Another complication is the "too big to fail" issue. Volcker said. "the proposed restrictions are a part of a broader effort designed to help deal with the problem "too big to fail" and the moral hazard that looms so large as an aftermath of the emergency rescue of financial institutions.(page282), Eight bank have been classified as having "systemic importance" and have increase their capital ratio to create sufficient cushion to deal with something that goes wrong without costs to taxpayers. Volcker discussed this issue with Geithner and Summers and told them that in theory more capital would work, though there was never enough to eliminate all risk. As a practical matter, Volcker did not trust the bankers to comply with the regulations, "over time, they will reallocate that capital the way they want to," And he did not trust the regulators to remain vigilant. (Page 283).

The future will tell. The author William Silber has done an excellent job in presenting Volcker's actions and his view of the future. Considering Volcker's remarks, the complexity of the Dodd Frank regulations and the banks that have become too big to fail makes one worry about Volcker's soul visiting the USA and the world in the future.

American Power After the Financial Crisis (Cornell Studies in Money)
American Power After the Financial Crisis (Cornell Studies in Money)
by Jonathan Kirshner
Edition: Hardcover
Price: £17.50

5.0 out of 5 stars Wrong regulations as the cause of the 2008 recession and of the probable next one, 4 Dec 2014
The author describes very clearly with many facts the causes of the Great Depression that started in 1929 and the last recession that began with the bankruptcy of Lehman Brother a US bank on September 15 in 2008

Franklin Roosevelt became President at the deepest point in the Great Depression passed several laws and new institutions to halt risky speculation and dishonest profit making practices. These regulations included the Glass Steagall act that forced banks to be either commercial banks or investment banks in1933, which led to the strongly opposed split of J.P. Morgan in two independent banks.

The banks never accepted this split and continuously lobbied to get rid of it. They did not succeed until Paul Volcker was succeeded by Alan Greenspan as Chairman of the Federal Reserve in 1987. Greenspan believed that banks needed very little supervision of banks. He believed in self-regulation in general and also for banks. The result was the depression of 2008. It became obvious that bank self regulation was a disaster. New regulations in the Dodd- Frank Act of 2010 to which a Volcker rule was added in 2014 about proprietary trading of commercial banks, the same subject as dealt within the Glass Steagall act.

The opinion of the author is that the new regulations deliver some benefits but are very far from sufficient to prevent the next depression. The banks have been quite successful in making the laws on much point vague with many exceptions resulting in a document with 2300 pages that will be ineffective.

The author often refers to Milton Keynes statement that in most situations the free market principle is best but not in all areas and certainly not in banking. The author considers accepting the existence of banks s too big to fail a mistake. The banking sector in the USA after the last recession is considerably more concentrated than before, a fatal flaw according to the author. It is almost impossible to effectively monitor what such huge organizations do.

The author is almost certain that there will be another depression and hopes that after that the necessary steps that could have been taken in 2008 then will be implemented to create a sound, safe and profitable banking system.

Definitely worth reading about this warning from an author that was one of the few economists that warned about the coming of the last depression long before it happened.

Zero to One: Notes on Start Ups, or How to Build the Future
Zero to One: Notes on Start Ups, or How to Build the Future
by Blake Masters
Edition: Hardcover
Price: £12.50

1 of 3 people found the following review helpful
1.0 out of 5 stars A false concept: Monopoly is good and competition is bad, 19 Oct 2014
Peter Thiel claims in the beginning of the book that monopoly is good and competition is bad. This as it stands is a false statement. A "real" monopoly" controls the price by restricting supply which can be achieved by buying up all competitors and or destroying competitors by unfair competition.
Prof. Tirole. the Nobel Prize winner in economics in 2014 had this to say referring to this type of companies, "In some markets idiosyncrasies (particularities) can lead to longstanding positions which need to be smartly regulated in away that doesn't overly penalize innovators."
Several of these start ups like Google, Microsoft , Apple and Face book faced legal battles because of unacceptable monopolistic practices and were forced to change practices and pay significant fines. Thiel does not deal with this important issue. However this is one of the most interesting and useful books about innovation as long as you read it carefully and critically.
An interesting chapter describes combining computers unique capabilities with human's unique capabilities. Thiel launched Pay-Pal, experienced of upwards of $10 million of credit card fraud every month. The number of transactions on the internet are of such large volume that its impossible for people to control each of them. It was found to be impossible to solve the problem with a purely computerized procedure because fraudsters would find out how to cheat the system. The solution was a system that identified suspicious cases and humans that decided which of them were fraudulent. The system was a success.
Another chapter presents an analysis of the characteristics of leaders of highly innovative companies. None of these leaders are "average" individuals. These leaders have different mixes of extreme characteristics, far from the average, in two opposite directions considering strong/weak, charismatic/disagreeable, insider/outsider, rich/poor, hero/villain, famous/infamous. He manages a venture/capital firm. Another chapter describes the mistakes made by start ups in the solar/green/social energy area by showing how they messed up the seven points he considers necessary to be successful.
The book covers much more than how to lead a start up hardware/organization For example he places the United States, Europe and China in a matrix with on one side Optimistic/Pessimistic and on the other side Definite/Indefinite. "Definite" means that the people and the government have specific goals and plans for the future; indefinite their absence. He positions philosophers, countries and investments levels in this matrix. For example America is classified as optimistic and definitive in the 1950s-1960s and still optimistic but indefinite from 1982 - present; Chine as pessimistic and definitive. Chinese permanently expect problems in the future. Europe as pessimistic and indefinite, that is uncertain about the future. This is interesting but also a simplification. A president can change the sentiment of a country from pessimistic to optimistic as Franklin Roosevelt and Ronald Reagan have done, Companies can also be classified that way. Innovative companies have to be in the optimistic/definitive box.
The book is very easy to read. However, it is one of the few books where I had to put it down after each chapter, to reflect upon the ideas to determine their validity and merit. It is a fascinating book.

Firm Commitment: Why the corporation is failing us and how to restore trust in it
Firm Commitment: Why the corporation is failing us and how to restore trust in it
by Colin Mayer
Edition: Paperback
Price: £8.79

5.0 out of 5 stars Transform Shareholders into Real Owners, 17 Oct 2014
Transform Shareholders into Real Owners

This book is about large companies with hundreds of shareholders. The author presents proposals that would lead to corporate action to be in line with their stated values and principles. The author, Professor Colin Mayer, concludes that the Corporate Social Responsibility movement on this point has failed.
The author makes two proposals. The first one is to create a trust that is responsible to see it that stated values and principles are practiced. This trust with trustees would be established next to the Board of Directors, the CEO and his executive committee, and the Annual General Meeting of shareholders (AGM).
The second proposal that strengthens the first one is to differentiate between shareholder voting power not only by the number of shares owned but also depending on the number of years they commit to hold and not sell the shares; the "committed shareholders."
The purpose is to radically reduce the influence from short term large share buyers that are only interested in making short term gains in buying and selling shares. The author expects that with this structure "ownership" becomes meaningful, the way it is in well run privately owned companies. The concept and feeling of "Ownership" in a large company with hundreds of shareholders is not meaningful.
The advantage for the CEO/top management would be that they could no longer be pushed by large short term shareholders to take actions that are in conflict with the values and principles of the corporation; the same applies to the Board of Directors. The committed shareholders can take a meaningful interest in the future of the company and will be interested in the short, medium and long-term performance.
The challenge will be to convince Board of Directors, Shareholders and Executive Management that a fourth group, the Trust with trustees will not become too complicated.
This innovations presented should be tested. If it works it will make a huge difference to bring actual corporate behavior in line what corporations claim are their values and principles.

FDR and the Creation of the U.N.
FDR and the Creation of the U.N.
by Townsend Hoopes
Edition: Paperback
Price: £19.08

5.0 out of 5 stars Roosevelt's view of the United Nations in 2014?, 26 July 2014
That is what I was wondering when reading the excellent book about the creation of the UN. When you read the book you may wonder too. The UN has not delivered what he hoped for that is permanent peace. There has not been a third world war and may be the UN has made a contribution. There have however several wars between small countries and civil wars. The UN has shown itself to be a more useful organization than the League of Nations it replaced.

Roosevelt realized that the allocation of responsibility to prevent and halt wars could only be assigned to great powers and that if these great powers would not join the UN unless, the "Policemen" had a right of veto on the use of force. Roosevelt would be disappointed that these veto powers were used so frequently. Roosevelt would have expected at there would be one United Europe representative with real power instead stead of two representing only a small part of Europe. He would also have welcomed India and Japan to join the Security Council. He would still be convinced that his idea of a few large powers with the responsibility to maintain peace was the right principle. He would have concluded that new methods have to found to reduce tensions inside and between states and solve poverty problems.

This book describes in an excellent and complete way the difficulties to arrive at the organization and its rules and authority. The authors also describe the organizational weaknesses of the UN organization such as the lack of competences of many of the staff and the immense difficulties to reorganizing the UN to become more efficient and effective.

The authors conclude:

"The challenge to the American political system is to recognize both the fundamental importance of the United Nations organization and it's limitations. The United States should take a leading role in an effort to strengthen a UN peacekeeping system that is deliberately designed to reduce the need for US-led military effort. Our civilization needs a police force. The best available combination solution is still the United Nations strongly supported by the United States-the formula that Franklin Roosevelt fought with all his strength to achieve more than half a century ago."

Sacred Mountains
Sacred Mountains
by Allerd Stikker
Edition: Hardcover
Price: £12.23

5.0 out of 5 stars How Daoism might save China from environmental disaster, 28 April 2014
This review is from: Sacred Mountains (Hardcover)
Daoism or Taoism is fascinating for those that have studied it. Taoism is not easy to understand. This book is a good introduction to Taoism because it describes how Daoism radically changed the view of the Chinese government about what to do in order to avoid a pollution disaster. It is the story of a Dutch businessman who from the discovery of a similarity between the teachings of Teilhard de Chardin and Daoism came to financing and organizing the rebuilding of a Daoist temple in Mainland China. This temple was built according to ecological Daoist principles and operates a center for teaching people in a practical way Daoist principles to halt environmental destruction The Chinese government moved from a doubtful attitude to full support at the highest level after Deng Xiaoping became the head of the Government. This is a remarkable change when you realize that Mao tried to eradicate religion.

The author describes how in China there is nothing you can accomplish without government approval. It required a great deal of skill, getting to know and convincing people at the community, regional and central level to make progress. The Chinese government ascribed their change in attitude to the realization that Chinese young people had become 100% materialistic and the necessity of an attitude change towards the environment at all levels of society, peasants, workers, educational and research institution and most of all the government itself. I was amazed that so much change could be achieved by building a Daoist temple. As an aside in order to understand the merits of the Daoist principles you do not need to become a Daoist

The book also describes the essential role the Alliance of Religions and Conservation (RAC) played in getting the project started and approved. The ARC started as an offshoot of the World Wildlife Foundation (WWF) and became independent in 1995. The ARC has since been recognized by the UN and World Bank as an important partner in development projects. It also helped that Prince Philip was the founder of both the ARC and the WWF.

The book is also an example of how a businessman with a degree in engineering could use this experience with working with religious, academic and governmental leaders became instrumental in starting a new way of thinking in China, also of interest to other countries. The book is easy to read, beautifully presented with many illustrations.

Freedom For Sale: How We Made Money and Lost Our Liberty
Freedom For Sale: How We Made Money and Lost Our Liberty
by John Kampfner
Edition: Paperback
Price: £6.58

1 of 1 people found the following review helpful
3.0 out of 5 stars Half the story, 15 Feb 2014
In the conclusion the author writes: "The preeminent freedom has become financial - to earn, to keep one's money and consume." The missing half is that hundreds of millions escaped from abject poverty, with no clean drinking water, sewage disposal, healthcare, education, hunger and decent jobs. Freedom did not exist for these millions. It is nevertheless interesting and worthwhile to know about journalists whose freedom was restricted in unjust ways, to the point of being killed..
It is a problem that some journalists do not act in accordance with the Code of ethics from the Society of Professional Ethics that states, "Professional Integrity is the cornerstone of a journalist's credibility". This includes "Giving the subjects the opportunity to respond to allegations of wrong doing" and "Admit mistakes and correct them promptly". Some journalists do not follow these principles. Some publish stories without a sound basis where the purpose appears to be to cause sensations and increase newspaper sales, and having made an mistake, refuse to admit it and where in addition the newspaper refuses to publish a response from the person accused of wrong actions.
Newspapers are still the moat important and trusted form of information to the people at large. This book is right about that governments should change policies that prevent journalists from finding out and publishing the truth as long as they follow their ethical standards that include, quotes from the Code, "Shun political involvement and "Imposing their own cultural values on others."

China's Legalists: The Early Totalitarians (East Gate Books)
China's Legalists: The Early Totalitarians (East Gate Books)
by Zhengyuan Fu
Edition: Paperback
Price: £29.32

5.0 out of 5 stars Absolute Power and Rule by Law, 27 Oct 2013
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The book describes a government system that was developed and implemented by emperor Qin Shihuang and his Prime Minister LI Si in 211 BC. Qin Shihuang was the emperor that conquered all other states that ended the Warring States Period that lasted from 401 - 221 BC. The emperor would not have succeeded with his victories without applying the Legalist system Legalism is not only a theory, it was implemented.

The purpose of the legalist system was to make the state as powerful as possible with at its head a king or emperor that had absolute power. The emperor decide what had to be done and could not be challenged by any person or group. The emperor used the law to tell the people what to do and think. Nobody could refuse what the law specified and nobody was allowed to question or criticize any law the emperor had issued. The emperor decided when and how to change laws. It was not the "role of law", it was ruling with laws.

To achieve absolute adherence severe punishments were applied. Nobody could question a verdict nobody could issue a pardon. This also required a "thought police", the "universal mutual surveillance system." Families were organized in groups of five ten. Each member had to report if anybody was acting or expressing opinions forbidden by law. A person that did not report suspicious behavior was punished the same the person that had broken the law.

The country was divided in 64 provinces ("commanderies") each with a civil servant as its head, chosen and appointed by the emperor. In principle anybody could become a member of the civil service after passing a civil service examination. The civil servants were promoted on a basis of performance and without regard family relations or wealth. This system was very effective and still functions to day

After the emperor's death, the dynasty collapsed. The first emperor of the next dynasty,
Goazu of Han was a legalist. He replaced the legalist teachings with Confucianism, which was reinforced by a successor Emperor Wu of Han. The author writes about this change as follows " Legalist tenets exerted an enduring and overriding influence on China's imperial institutions and political practices,,,,. The function of Confucianism as a a rhetoric ploy for policy justification has proven to be effective.". "This feature of the Chinese imperial political tradition is referred to by most, if not by all, Chinese scholars as wairu neifa (outside Confucian, inside Legalist)." The two Han emperors certainly did not act in according with Confucian concepts.

Mao Zedong admired Qin Shihuang and strongly opposed Confucianism. Mao said: "Emperor Qin Shihuang buried only 460 Confucian scholars alive (page 129). We burned 46.000 Confucian scholars. I think that he killed too few Confucians... Those Confucian scholars were indeed counterrevolutionaries."

Deng Xiaoping after succeeding Mao changed direction. Deng Xiaoping worked for Sun Yat - sen known as the father of modern China. Sun Yat - sen considered "Universal Love' very important a concept, advocated by another Chinese Scholar of the warring states period, Mo Tzu. Deng increased freedom and with his policy of "Open Up and Reform" reduced legalistic influences, traces are still left. The experience with legalism
shows that it is necessary that even though breaking laws needs punishment, excessive punishment leads to instability. The administration of provinces by competent civil servants rather than by nobles or aristocrats had become standard practice.

This is an important book if you want to understand the history of China and the merits and the risks of centralizing power without restraints in one leader.

Great by Choice: Uncertainty, Chaos and Luck - Why Some Thrive Despite Them All
Great by Choice: Uncertainty, Chaos and Luck - Why Some Thrive Despite Them All
by Jim Collins
Edition: Hardcover
Price: £20.00

2.0 out of 5 stars The Missing Factor - The Chief Executive, 13 Oct 2013
In Collin's "Built to Last", vision and values were key factors. In "Good to Great" even though at the start Collins believed the CEO had little influence, research showed the CEO was a key factor. In "Great by Choice" the CEO disappeared as a factor other than being ambitious. The "Apple" case is made to fit the his "recipes" for success. Jobs hired John Sculley, a marketing expert and Vice President of Pepsi to become the CEO of Apple. In Collin's terminology, Jobs "got the wrong man on the bus". When Jobs came back, he had become a better manager. He had been highly successful after leaving Apple and gained self-confidence. He realized that he had made a mistake, and that he could lead the company as the CEO. This case certainly demonstrates the importance of having the right CEO.

However, this book is definitely not a waste of time. One of the great values is a long list of questions CEOs should ask about their own company. Therefore also read the Research Foundations chapter too. Answering the question will give additional insights about what to change and improve.

The Art of War / The Book of Lord Shang (Classics of World Literature)
The Art of War / The Book of Lord Shang (Classics of World Literature)
by Sun Tzu
Edition: Paperback
Price: £3.99

5.0 out of 5 stars Brilliant ideas and fatal flaws, 14 Sep 2013
Verified Purchase(What is this?)
This review is about the book of Lord Shang (390-338 BC). He is one of several brilliant Chinese philosophers that lived in the 'Warring States Period' of 476 to 220 BC. These philosophers tried to convince the head of states on how they should think and act to be successful. Several also implemented their theories. as did Lord Shang as prime minister.

The historical context is important. During the "Warring State Period" around 100 independent states were continuously at war. A government had no choice but to defend their country and annex other states. To annex was necessary as not annexing meant being annexed. The Qin state was a relatively small state. By adapting the system of Lord Chang the Qin state became the most powerful. The Qin Emperor Qin Shi Huang annexed all of the other states by 221 BC. The emperor is still known for the terracotta soldiers.

It is not possible to describe the proposed system with a few sentences. I can only present a few important features. His view of human nature can be illustrated with this slogan " People will strive to become richer and more famous until the lid on their coffin is closed"". People are egoistic and look after their own interest and not of that of the state. The head of a state cannot assume that, if he is virtuous and benevolent, that it will cause others to be the same (the opposite of what Confucius believed). Therefore the government has to establish laws that must be adhered to. And those that break the laws should be punished. There were many other conditions for success, like appointment of people to government positions should be based on proven merits and be without any consideration of being from an aristocratic family, rich, or highly educated, and very important could not be inherited. The same with punishment, to be determined without any consideration of the social status of the person. Loyalty to the state was superior to that of the family (opposed by Confucius). Also important were the standardization in the use of language, tax system, weights and measures, width of carriage and methods of administration. All of these measures were vital to unite a country. Last but not least, a government without having detailed up to date statistical information about the citizens and resources would collapse. These were all very revolutionary concepts at that time, with many of them still valid to day.

Law, breaking it and punishment go together. One of the fatal flaws was that another law specified that a person that would inform the government that he knew of someone or a group, that was going to break the law, would be rewarded with title, land and money. The result was that many people fabricated accusations to get rid of rivals and get the rewards. That was the cause why Emperor Qin Shi Huang killed his crown prince as the result of baseless accusations and of tens of thousands more.

The second fatal flaw. The appointment of the emperor was not based on proven merit. The position was inherited. Lord Shang, based on the principle of equality in front of the law had punished the crown prince when he had broken a law. As soon as the crown prince became the emperor he fabricated false accusations. Lord Shang was executed by quartering and all of his family members were executed Most of the laws remained in place. These two flaws were among the main causes for the collapse of dynasties, wars and splitting the country.

You can learn from the incredible success of the system in conquest and of its fatal flaws.

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