The Books That Influenced Harvard Professor Michael J. Sandel

Michael J. Sandel

American political philosopher and a professor at Harvard University, Michael J. Sandel is no stranger to Farnam Streeters. He’s argued why we shouldn’t buy presents and the limits of what money can buy.

And now, thanks to The Harvard Guide to Influential Books: 113 Distinguished Harvard Professors Discuss the Books That Have Helped to Shape Their Thinking, we know which books have influenced him the most and why.

These seem to be among the books that can help us reflect on the moral and political conditions of liberal democracy in contemporary America.

The Human Condition by Hannah Arendt

Arendt offers the most compelling modern case for the ancient claim that politics is essential to the good life, not merely instrumental to the pursuit of private interests and ends.

Four Essays on Liberty by Sir Isaiah Berlin

Berlin grounds liberalism in the idea that the human good is ultimately plural, that there is no single, overarching value that orders all the rest. To acknowledge the tragic possibility that inheres in moral and political life is to respect above all people’s freedom to pursue their own ends, to negotiate their own moral circumstance.

Outlines of the Philosophy of the Right by G. W. F. Hegel

Hegel contrasts the idea of a civil society, where people cooperate to further their interests, with the idea of a political community as an ethical life that enlarges the self-knowledge of the participants.

Social Limits to Growth by Fred Hirsch

Hirsch recasts economics as political economy, and political economy as moral economy. Cost-benefit analysis to the contrary, he shows that the market is not a neutral way of evaluating goods. Not all values can be translated without loss into commodity values, nor does all economic growth produce greater welfare.

Rationalism in Politics and Other Essays by Michael J. Oakeshott

Oakeshott’s romantic conservatism contrasts powerfully (and eloquently) with more familiar libertarian versions. Against a philosophy of abstract principles and natural rights, he conceives politics “as the pursuit of intimations.”

A Theory of Justice by John Rawls

Rawls provides the most important philosophical defense of liberalism in our time. Individual rights cannot be overridden by utilitarian considerations, he argues, and the principles of justice that specify our rights do not presuppose any particular conception of the good life.

For more in this series check out the books that influenced E. O. Wilson, B. F. Skinner, and Thomas C. Shelling.

Seymour Schulich on Deals, Business, Decisions and Life

Seymour Schulich tyc

Seymour Schulich, one of Canada’s most successful businessmen and author of Get Smarter: Life and Business Lessons offers some indispensable business wisdom.

  1. Business is a means to an end not an end in itself. Nobody on his or her deathbed says, “I wish I had spent more time in the office.”
  2. Never quit a job unless you have another job. My father taught me this great truth. You are perceived as more valuable if you are working than if you’re unemployed. You may feel staying employed doesn’t give you the time or latitude to seek a better job. This is a dangerous delusion—don’t succumb to it.
  3. Always ask the question “If this decision is wrong, is it going to be painful or fatal?” Company builders and business leaders keep away from “bet the company” investments.
  4. Keep away from advisors/consultants. If they knew how to make money, they would. These folks are like the fellow who knows a thousand ways to make love but doesn’t know any women.
  5. The best test of a deal’s true attraction is to ask your partners, employees, directors, family, and so on, “Would you put your own money in this deal?” It’s amazing how often the answer to this question is, “No! This is good for the company, but I’ll take a pass.” These deals are invariably losers.
  6. Always have at least two people from your side present at any negotiating or deal-making sessions. This gives you time to think, plus an ally with whom to compare perceptions.
  7. Never confront or threaten people or institutions who have more power than you. Examples: police, customs agents, the sec, Ontario Securities Commission, tax agents of the government, or politicians.
  8. In dealing with the media, never forget to qualify your statements with “not for attribution” and “off the record” where appropriate. Journalists value their contacts and will usually respect a source’s desires.
  9. In negotiations, always try to get the other party to name its asking price. It may often be far lower than your maximum offer. If the other party won’t name a price, start very low. You can always go up.
  10. Almost everything in life is easier to get into than get out of.
  11. Never bid against yourself. Only raise your bid to top a real counter bid, not an imaginary one.

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Six Strategy Traps

Strategy could be the most over-used word since leadership. How many strategies can one organization have? A lot of people say “strategy” when they really mean goal or objective.

One of the best books on Strategy is Roger Martin and A. G. Lafley’s Playing to Win: How Strategy Really Works.

In this excerpt they comment on the signals that a company has a worrisome strategy.

There is no perfect strategy—no algorithm that can guarantee sustainable competitive advantage in a given industry or business. But there are signals that a company has a particularly worrisome strategy. Here are six of the most common strategy traps:

  1. The do-it-all strategy: failing to make choices, and making everything a priority. Remember, strategy is choice.
  2. The Don Quixote strategy: attacking competitive “walled cities” or taking on the strongest competitor first, head-to-head. Remember, where to play is your choice. Pick somewhere you can have a chance to win.
  3. The Waterloo strategy: starting wars on multiple fronts with multiple competitors at the same time. No company can do everything well. If you try to do so, you will do everything weakly.
  4. The something-for-everyone strategy: attempting to capture all consumer or channel or geographic or category segments at once. Remember, to create real value, you have to choose to serve some constituents really well and not worry about the others.
  5. The dreams-that-never-come-true strategy: developing high-level aspirations and mission statements that never get translated into concrete where-to-play and how-to-win choices, core capabilities, and management systems. Remember that aspirations are not strategy. Strategy is the answer to all five questions in the choice cascade.
  6. The program-of-the-month strategy: settling for generic industry strategies, in which all competitors are chasing the same customers, geographies, and segments in the same way. The choice cascade and activity system that supports these choices should be distinctive. The more your choices look like those of your competitors, the less likely you will ever win.

These are strategic traps to be aware of as you craft a strategy.

Playing to Win is right up there with Good Strategy Bad Strategy on my list of must reads for anyone seeking an understanding of strategy as it relates to business.

Andy Warhol: Don’t Make a Problem of your Problems, How a Person Gets Disciplined, and The Value of Time on Values

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In The Philosophy of Andy Warhol (From A to B and Back Again), Warhol advises us not to make a problem of our problems.

Everybody has problems, but the thing is to not make a problem about your Problem. For example, if you have no money and you worry about it all the time, you’ll get an ulcer and have a real problem and you still won’t have any money because people sense when you’re desperate and nobody wants anything to do with a desperate person. But if you don’t care about having no money, then people will give you money because you don’t care and they’ll think it’s nothing and give it away—make you take it. But if you have a problem about having no money and taking money and think you can’t take it and get guilty and want to be “independent,” then it’s a problem. Whereas if you just take the money and act spoiled and spend it like it’s nothing, then it’s not a problem and people keep wanting to give you more.

How does a person get disciplined? More importantly Warhol comments on why it takes a while sometimes to see that we have the wrong values.

The telephone rang.

B answered it. “Pronto.”

It was my art dealer in Torino, calling to invite us to lunch. I tried to motion to B that I wanted to go someplace where they’d have cherries.

When B got off the phone he said that we were meeting our dealer for lunch, and then he asked me, “How do you get disciplined?”

“How does a person get disciplined?”

Right. I want to know how you’re supposed to pick up good habits. It’s very easy to pick up bad ones. You always want to go after the bad habits. Say you eat ravioli one day and you like it so you eat it the next day and the next day and before you know it you have a ravioli habit or a pasta habit or a drug habit or a sex habit or a smoking habit or a cocaine habit . . .”

Was he trying to make me feel guilty about the cherries? “You’re asking me how you get out of the bad habits?” I asked him. No, he said he didn’t want to know how you get out of the bad ones—just how you get into the good ones.

Everybody has their good habits,” he said, “that they do automatically that maybe they learned when they were little—brushing your teeth, not talking with your mouth full, saying excuse me—but other good habits—like writing a chapter a day or jogging every morning—are harder to get into. That’s what I mean by ‘discipline’—how do you get new, good habits? I’m asking you because you’re so disciplined.”

“No, I’m not disciplined, really,” I said. “It just looks that way because I do what people tell me to do and I don’t complain about it while it’s happening.” That’s a three-part rule of mine: (1) never complain about a situation while the situation is still going on; (2) if you can’t believe it’s happening, pretend it’s a movie; and (3) after it’s over, find somebody to pin the blame on and never let them forget it. If the person you pin the blame on is smart they’ll turn it into a running joke so whenever you bring it up you can both laugh about it, and that way the horrible situation can turn out to be fun in retrospect. (But it all depends on how mercilessly you hound the person you’re blaming, because they’ll only make a joke out of it when they’re desperate, and the more desperate you make them by hounding them, the better the joke they’ll make out of it.)

“It’s not discipline, B,” I repeated. “It’s knowing what you really want.” Anything a person really wants is okay with me.

“All right. But let’s take champagne. All my life I wanted as much champagne as I could drink, but now that I’m getting all the champagne I ever wanted and more, look what I’m getting—a double chin!”

“You’re also finding out that champagne isn’t what you really want, since you don’t want a double chin. You’re finding out that champagne isn’t what you want, it’s beer you want.”

“Then I’d get a beer belly.” B laughed at the idea of a champagne chin and a beer belly.

“Then beer isn’t what you want, either.”

“But that’s not hard to figure out—nobody wants beer.”

“Yes they do,” I told him. “You’re the one who told the joke about an Irish seven-course dinner being a boiled potato and a six-pack.”

“Yes, I suppose … But it’s not the thing I want so much as the idea of the thing.”

“Then that’s just advertising,” I reminded him.

“Right, but it works because the reason I want champagne, the reason most people want champagne, is they’re impressed with the idea—Champagne!—like they’re impressed with the idea of caviar. Champagne and caviar is status.”

That was not completely true. In some society shit is status. “Look,” I told him, “you realized when you ended up with a double chin that your values were misplaced. Right? It takes time to find out, but you’re finding out. Even today you put your nose up in the air if you don’t have dinner with the Afghanellis, the Cuchinellis, the Pickinellis, the Mount- bottoms, the Van Tissens—”

Warren Buffett: The Problem With 200 Page Manuals on Behavior

Warren Buffett

In an interview with Jeff Cunningham, Warren Buffett hits on two principles that elude most of us.

Interviewer: I was reading a Lincoln quote the other day, “With public sentiment, nothing can fail. Without it, nothing can succeed.” Of course, he was talking about what led to the Emancipation Proclamation. When I think about your world, 330,000 people who are employees of Berkshire Hathaway or its subsidiaries, how do you send the message that they are being scrutinized under the microscope by the media at all times?

Buffett: I send a message to their managers. Those 330,000 people work for maybe 70 or so CEOs and in turn work for me. My job is to have those 70 CEOs sending out the right message. Every two years, I write them a very simple letter. It’s a page-and-a-half. I don’t believe in 200-page manuals because if you put out a 200-page manual, everybody’s looking for loopholes basically.

Page-and-a-half, it’s very hard for them to argue about what I’m talking about. I tell them that my reputation, Berkshire’s reputation, is in their hands. We’ve got all the money we need. We’d like to make more money but we’ve got all the money we need. We don’t have an ounce of reputation beyond what we need. We can’t afford to lose it. We never will trade reputation away for money.

They’re the ones that are the guardians of that. I want them to not only do what’s legal obviously, but I want them to judge every action by how it would appear on the front page of their local paper written by a smart but semi-unfriendly reporter who really understood it to be read by their family, their neighbors, their friends.

It has to pass that test as well. I tell them I don’t want anything around the lines. I tell them there’s plenty of money to be made in the center of the court. I’m 84. My eyes aren’t that good anymore. I can’t quite see the lines that well. Just keep it in the center of the court. If they have any questions, call me.

As for advice on what to do when you face a problem …

Interviewer: Even the occasional dust-up at Berkshire is big news. I’ll pick on Salomon only because it’s history now. It’s got a lot of time to reflect on that. When you think about what you went through there, what advice do you have for a CEO who’s on the media hot seat because of a similar situation?

Buffett: There are a couple pieces of advice on that. The first is that when you find out a bad news, correct that and if it’s necessary to report it, then the authorities report it to the media. The big problem with Salomon was not what a fellow named Mozer did which was to defy the US government, not ever a very good idea. But that could have been handled, but he reported…He didn’t report it.

John Meriwether, his supervisor, picked up on it in late April of 1991 and went to the president, the chairman and the chief legal counsel of Salomon and said, “Here’s what this fellow Mozer has been doing.” They all agreed it was wrong. They all agreed it was reportable to the Federal Reserve promptly. Unfortunately, nobody did anything.

In the middle of May, Mozer went out and did it again. Now, you’ve got a terrible problem because you knew the guy was a bad actor a few weeks earlier and he hadn’t reported it and that compounded there. Then, you’re in a real pickle.

When you find bad news, I say get it right, get it fast, get it out, get it over. Get it right is important. When they questioned, Mozer had done it there. But the get it fast and get it out, they missed on.

You’re going to get bad news. I got 330,000 people. I will guarantee you that probably dozens of them are doing something wrong right now. I just hope I find out about it early and the person below me finds out and lets me know if it’s bad enough and that they stop it.

You can’t have a city of 330,000 without an occasional [laughs] crime of some sort. It’s going to happen. You’ve got to do something about it fast when it does happen.

Elon Musk: A Framework for Thinking

Image: Musk, CEO of Tesla Motors and SpaceX, attends the Reuters Global Technology Summit in San Francisco
In this brief video, Elon Musk, who previously brought us how to build knowledge and 12 book recommendations, talks about a framework for thinking.

I do think there is a good framework for thinking. It is physics – you know the sort of first principles reasoning. … What I mean by that is boil things down to their fundamental truths and reason up from there as opposed to reasoning by analogy.

Though most of our life we get through it by reasoning through analogy, which essentially means copying what other people do with slight variations. And you have to do that, otherwise mentally you wouldn’t be able to get through the day. But when you want to do something new you have to apply the physics approach. Physics has really figured out how to discover new things that are counter-intuitive, like quantum mechanics … so I think that’s an important thing to do. And then also really pay attention to negative feedback and solicit it, particularly from friends. This may sound like simple advice but hardly anyone does that and it’s incredibly helpful.