The best reads of 2014
A review of the best financial books that have graced the MoneyWeek bookshelf this year.
Crown Business (£16.99)
The co-founder of PayPal based Zero to One around a class on entrepreneurship that he taught to students at Stanford. In it, he argues that most successful entrepreneurship comes from creating a radically new product, rather than improving on an existing concept.
There's plenty to disagree with in this: studies suggest that even during the Industrial Revolution, growth came from a variety of small improvements, rather than a few breakout technologies.
However, Zero to One is definitely a cut above the usual memoir or how-to guide. Kirkus Reviews thinks that it is "forceful and pungent in its treatment of conventional orthodoxies".
Harvard University Press (£29.95)
This year's surprise bestseller was a data-filled book on inequality by a French economist. Piketty argues that the importance of wealth in most developed economies has been rising relative to wages and incomes for the last few decades.
At the same time, this wealth is becoming concentrated in fewer hands. This is leading us towards a return of the "gilded age" of the late 19th and early 20th centuries.
Critics claim that he is reading too much into his data and ignoring other contradictory evidence. And even he admits that we are still more equal than the Victorians.
This makes it more of a discussion point than a definitive study. As the FT's Lorien Kite puts it, "while Piketty may not have settled the inequality debate, he has taken it into new territory: his opponents will be obliged to follow".
Allen Lane (£30)
High frequency trading (HFT) computer-driven transactions that occur in milliseconds is a hot topic on Wall Street. Supporters claim that it is driving down costs and increasing liquidity, but others worry that it is skewing the playing field away from the average investor and benefiting only the big banks.
Lewis's book, in which he sides with the critics, has polarised reviewers. Felix Salmon argues on Reuters that Lewis is "pushing a false narrative that it's [HFT] bad for the little guy". In contrast, James Stewart of The New York Times calls it "a welcome addition to a growing chorus calling for further investigation and reforms, which may yet yield some results".
The Daily Telegraph's Alex Preston thinks the book is "clear enough for outsiders to understand, and well enough informed to appeal to experts".
Simon & Schuster ($28)
The 1920-1921 US recession, where output fell by a quarter, is a historical footnote alongside the Great Depression.Grant's book tries to return it to prominence, arguing that its short duration was due to laissez-faire policies that were not followed a decade later.
The FT's Edward Chancellor calls it "a timely reminder that our forebears knew of other, more efficacious, remedies to cure financial hangovers than the hair of the dog", written "with a wry humour reminiscent of John Kenneth Galbraith".
The Economist thinks that Grant "makes too much" of the link between austerity and recovery, but agrees that "Mr Grant tells the story well".
University of Chicago Press (£18)
Economists Mian and Sufi claim that the real cause of the global financial crisis was household debt, and say the key to preventing it happening again is for lenders to assume more of the risk.
Lawrence Summers in the FT says that "it could be the most important book to come out of the 2008 financial crisis and subsequent Great Recession".
Some of our other favourites
The Trouble with Europe
While it perhaps downplayed the transitional costs, and might be overoptimistic on the prospects of negotiating trade deals with China and the US, it's a sober-minded, intelligent analysis that deserves to be read.
Tom Bower launched yet another biography of Richard Branson in Branson: Behind the Mask. As the title suggests, Bower see Branson's "ber-entrepreneur" image as largely mythical he probably won't change the mind of Branson fans, but it's a good read.
Of course, few have a positive view of Fred Goodwin, whosedisastrous career as the head of RBS is dissected by Ian Fraser in Shredded: Inside RBS, The Bank That Broke Britain. It may have more juicy gossip than any financial book we read this year.
Perhaps the quirkiest book we read was Paul Oyer's Everything I Ever Needed to Know about Economics I Learned from Online Dating. It attempts to explain economic theory using insights from Oyer's own experiences looking for love.
Kwasi Kwarteng's War and Gold, meanwhile, provided a lucid, highly readable account of the history of the global monetary system. And in Bitcoin: The Future of Money? MoneyWeek regular Dominic Frisby looked at its potential future digital currency Bitcoin.