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Book reviews

The Snowball: Warren Buffett and the Business of Life
By Alice Schroeder,  €40, ISBN 9780747591917  
Given Warren Buffett’s recent investment in Goldman Sachs, there is an uncanny coincidence of timing with the appearance of his biography and the Goldman history reviewed below. Both books are ‘authorized’ in the sense that the authors are close associates of their subjects, both were written during the closing stages of a fifteen year bull market and both were signed off just before the meltdown, which is unfortunate.  

Yet the Buffett biography will sell in high numbers, and deservedly. Its title refers to a recollected Nebraskan winter in 1939 when Buffett, age 9, made a wet snowball in the backyard and then rolled it around, watching it grow. The resulting aphorism cuts to the heart of a philosophy of life defined by accumulation. “Life is like a snowball. The important thing is finding wet snow and a really long hill.” 

The metaphor runs throughout a long life of rolling around immensely sticky balls of greenbacks that turned the Berkshire Hathaway investment vehicle into an extraordinary monument to 20th capitalism. In one sense that story ended two years ago when Buffett donated 85% of his fortune, then worth $37bn, to the Bill and Melinda Gates Foundation, the largest single act of philanthropy ever recorded. 

The life behind such stupendous accumulation is thus the paradox of Puritan awareness that wealth is only as defensible as the good it can achieve, balanced by the traits of a greedy miser. 

The strength of this biography is that it exhibits the Buffett brand by being meticulous and exhaustive up to the start of 2008. He chose Schroeder for her acumen as a former certified accountant and respected Wall Street equities analyst. That shows in the prose, which is densely actuarial, rescued only by its subject, not its style.  

Yet given the sheer number of hit and miss accounts of Buffett to be found online, the vast majority of them pounding out the same old hokey detail about his fondness for Coca Cola, steak and hamburgers and any number of witty aphorisms, this 960 page brick couldn’t have come sooner. It shows an immensely original mind but not one ever divorced from reality.  

How he decided to Give It All Away (yet hang on to most of it for the time being) is illustrative. “The boy who would not let his family touch the chifforobe where he kept his hoarded coins had finally become a man who could entrust his tens of billions to someone else’s hands.”  

A very, very American story, this biography is not like Napoleon Hill’s famous, 1937 Think and Grow Rich yet it will be bought and digested as if it were, no doubt netting Buffett more silver.

The Partnership 
By Charles D. Ellis , Allen Lane, €40, ISBN 9781846141027
Running at over 700 pages, this epitaph to the debt-induced hallucination that Goldman stroked and exploited to the full was out of date even before it came out last month, having been signed off in June. The publishers should have waited to add a crucial last chapter. The other problem is that it’s written by one of Goldman’s consultants. The underlying tone is by definition congratulatory.The book is what it is. Brilliant insider sources, a complex yarn about the value of private partnerships, a vast, lengthy tribute to greed - but hardly objective.

The power of unreasonable people 
By John Elkington  and Pamela Hartigan , Harvard Business School Press,  €20, ISBN 9781422104064 
Completed late in 2007, the authors were fully aware of the ‘dysfunction’ of the capitalist system long before the great crash of ‘08. But the beautiful idea of social entrepreneurship, that you chase ‘blended value’ (social, environmental etc) and not just cold cash is better at showing the flaws of big business than it is at demonstrating how the movement could really get traction. 75% of a sample of US non-profits and part-profits had fewer than 25 employees. But the ideal of idealistic capitalism stands and it’s the source of true change.

The (mis) behaviour of markets 
By Benoit B Mandelbrot and Richard L Hudson , Profile Books,  €15, ISBN 9781846682629 
Rushed out in October, this ‘new edition’ of a book originally published in 2004 is really a new Preface lasting 4.5 pages. However, ‘The International Bestseller that Foreshadowed a Market Crash’ is worth revisiting if you are not already familiar with Chaos Theory. And the Preface isn’t bad either. It argues that unlike previous, greed-induced manias, the recent one rested on misplaced confidence concerning our understanding of how markets work. Markets are mad and chaotic like the weather. Never did bankers look less substantial than after this