Business thinking between the covers

Risk Intelligence

by Dylan Evans

Atlantic Books €14.99

This is a thoughtful and interesting work on the subject of managing risk and is well illustrated with insights into the work and methodologies of those who deal with risk, including financial market professionals and law-enforcement agencies.

There are four mental steps that should be followed when estimating truth or falsehood, Evans says. First, identify the pieces of information and then decide whether each of those pieces makes the statement less or more likely and by how much. This should produce a hunch, the strength of which varies according to your degree of belief. This feeling should be translated into a number.

Irish readers will be particularly interested in the passage where the author interviews JP McManus who reveals some of his gambling tricks. When playing backgammon McManus says he makes deliberate mistakes to see how well his opponent exploits them. If the other guy plays well, he stops playing them. In other words, he knows when not to bet.

As to the danger of relying on computer programs to help assess risk, the 2007 financial crisis suggests the vital importance of more nuanced human risk intelligence in alerting us to risks even when the data told us not to worry, Evans observes.

The Locavores Dilemma

by Pierre Desrochers and Hiroka Shimizu

Perseus Books €24.99

There’s a genre of business books at the moment attacking the eco-friendly brigade and the Locavore’s Dilemma is the latest to join this bandwagon. The premise of this book is that the concept of food air miles is bogus and is, at best, ill-informed. The arguments here are quite convincing, without being over heavily laboured.

The idea that a large part of our food should be sourced locally and thus cut down carbon consumption, create jobs and ensure a more reliable and nutritious food supply is a myth, argue the authors. It does not address why the globalised food supply chain has developed the way it has and ignores the history of famines and the economic rationale for international trade.

Much of the philosophy of food activists is based on a romantic view of the past, but the so-called good old days were more trying times, the authors note. Crushing bugs and removing weeds by hand were neither very effective nor productive. Moreover, our grandparents would happily have embraced rather than rejected the variety of new products now available.

Had resistance to innovation and change been more significant in the past two centuries, real income, life expectancy and food production would be much lower than they currently are, while infant mortality, food prices and hours worked, would have been much higher.

The Mess We're In

by Guy Fraser-Sampson

Elliot Thompson €24.99

Sub-titled “why politicians can’t fix financial crises”, UK academic Guy Fraser-Sampson argues that there is something rotten in the core of the political system and as a consequence, many people are no longer engaging with politics. Left to their own devices, he says, those who govern us always favour their own short-term agendas over the longer-term good.

The present crisis has been many decades in the making, he says, and is the result of a longer- term neglect and betrayal by those that ordinary citizens have trusted.

Fraser-Sampson is strongly critical of the welfare system that he says has created a culture of entitlement. An effective welfare system would channel scarce resources to those who are genuinely unable to work rather than providing a better standard of living to those who can and do work.

He presents some radical solutions to Britains economic problems. These include leaving the EU and eliminating Britains foreign-aid programme and changing all public-sector pension plans to money purchase schemes. He is also in favour of abolishing Britain’s ministry of defence and selling off all its buildings and facilities, making the point that Belgium is no less vulnerable from attack for not having a significant defence force. Easy to pick holes in, it is nonetheless an entertaining prescription for Britain’s ills.