The Best Business Books Of The Year

The office mailman stacks a small mountain of books outside my door virtually every day. Entreaties from authors and publicists pour in via mail and phone. The number of books submitted to BUSINESS WEEK for review is nearly overwhelming. And that's before we page through publishers' catalogs in search of the books we think our readers will need or want to know about.

Given our limited review space, some arbitrary constraints are applied. While we don't restrict ourselves to books on business--we also especially like politics, social issues, and science and technology--we only rarely review fiction.

And even among business books, we draw some lines. How-tos generally aren't our thing, be they how to beat the market, how to organize your time, or how to charm your boss. Those nitty-gritty, hands-on manufacturing guides, their titles laden with initials--TQM, TPM, SMED--unquestionably have their place. It just isn't here. Our prejudice is toward the business book that is a good read and of broad general interest. That can be a corporate saga, an analysis of an issue, an overview of an industry, a history, even the occasional lively reference book. From such works, we have selected the best business books mf 1992.

Among the corporate tales BUSINESS WEEK reviewers liked best this year is Richard M. Clurman's account of the Time Warner merger, To The End of Time: The Seduction and Conquest of a Media Empire (Simon & Schuster). Clurman, a 25-year Time Inc. veteran and one-time chief of correspondents at Time, doesn't hide his bias. His love for the old Time Inc. and his contempt for Warner boss Steven J. Ross and all he has wrought permeate his book.

"Clurman's thesis is that Ross romanced Time into making what amounted to the deal of the century for Warner," observed our reviewer, Media Editor Mark Landler. Time's executives and directors, as Clurman tells it, betrayed an astonishing lack of curiosity about Ross, with only 2 of 12 board members bothering to meet with him before signing off on the merger. Landler still longs for the book that plumbs the attributes that make Ross "a savvy dealmaker, media visionary, and everybody's favorite dinner partner." But Clurman's account of the stop-and-go merger talks, enlivened by details gleaned from his many inside contacts, is engrossing. Here's the definitive account, so far, of this most fascinating of the '80s deals.

In Merchants of Debt: KKR and the Mortgaging of American Business (Basic Books), George Anders of The Wall Street Journal explores not just Kohlberg Kravis Roberts & Co. but also the impact of the leveraged buyout deals it popularized. Reviewer Anthony Bianco found the book well-researched, fair-minded, and thorough in its history of transactions.

Discussing the $26.4 billion buyout of RJR Nabisco Inc., "Anders goes beyond what has been previously published," Bianco wrote, with his convincing assertion that RJR's post-deal crises pushed KKR close to ruin. Leveraged buyouts in general Anders terms "one of the most profoundly undemocratic ventures the United States had ever seen." Their only lasting impact, he says, was to shift wealth from the mass of corporate employees to a managerial elite allied with Wall Street.

Bianco faulted Anders for shying from sharp judgments and for failing to delve deeply into the motivations and character of KKR's dealmakers. But Anders won unparalleled access to Henry Kravis and his cousin and partner, George Roberts, Bianco noted. Crediting Anders with "devastating reportage," Bianco said, "His exhaustively researched book provides the closest look yet at KKR's inner workings."

James Grant endeavored to put such '80s phenomena as LBOs and junk bonds in historical context in his Money of the Mind: Borrowing and Lending in America from the Civil War to Michael Milken (Farrar Straus Giroux). Grant, editor of Grant's Interest Rate Observer, shows that the recklessness of the decade "was not aberrant behavior but part of a tradition hailing back a century or more," observed Associate Editor Jeffrey M. Laderman in his review. Grant sees the excesses of the '80s as a manifestation of a bull market in credit. Such markets occur periodically, he says, and inevitably lead to borrowing for ever more speculative purposes.

Grant documents how, since the mid-19th century, succeeding generations of lenders and investors have tripped themselves up. He does not neglect the government's influence. The "democratization of credit" has gone too far, he argues, when anyone can get a credit card, vanquish debts through a bankruptcy proceeding, and run up debts anew. He also attacks the "socialization of risk," arguing that federal deposit insurance has made depositors indifferent to banks' financial health.

The normally witty Grant has researched this material so painstakingly and documented it so meticulously that the book can be hard to read, Laderman said. But in the chapters covering recent times, the pace picks up. Money of the Mind, Laderman concluded, "should be required reading for bankers and bond investors."

A superb business history is Homestead: The Glory and Tragedy of an American Steel Town (Times Books) William Serrin, a former labor writer for The New York Times. Ostensibly, it's the tale of Homestead, Pa., home of the famous mill that made steel for the Empire State Building and World War II battleships, and one of the many towns outside Pittsburgh that thrived and died with the U.S. steel industry. But the book is more than that, wrote our reviewer, Hardy Green: "Serrin's nostalgic history of Homestead is wrapped around an account of the making of U.S. Steel Corp. and its partner in production, the United Steelworkers of America. Indeed, the vivid depiction of the growth of the company and the union--and the comfort and complacency that undid them--is Serrin's real achievement."

While many of the anecdotes comprising that larger story have been told before, Serrin relates them with fresh detail and drama. He also draws compelling biographies of U.S. Steel's successive chieftains, including Andrew Carnegie, and their varying approaches to industrial relations.

By the 1950s and '60s, as Serrin tells it, company and union leaders alike were mired in self-indulgence, and workers were following suit. Innovation was ignored, quality suffered, waste was huge, and pay was high. The mills closed and were dismantled in the late 1980s, and U.S. Steel is now USX Corp. Here's why Homestead is becoming a ghost town.

There's history, too, in Baseball and Billions: A Probing Look Inside the Big Business of Our National Pastime by Smith College economics Professor Andrew Zimbalist (Basic Books). But more impressive than the overview that opens the book is Zimbalist's discussion of baseball economics. "Although owners and officials in Major League Baseball's central office treat their financial statements like state secrets, Zimbalist has gathered hard data on stadium revenues, local TV deals, and merchandising money," wrote Sports Business Editor Harris Collingwood. "What he discovered is eye-popping." Example: Average team revenues went from $5.7 million a year in 1970 to $58 million in 1991.

Zimbalist manages a coherent, convincing discussion of profitability, said Collingwood, despite owners' tendency to post sorry results even in banner years--in part to turn public opinion against highly paid players. "What Zimbalist's book demonstrates is that owners' greed, pettiness, and arrogance have featured prominently in the sport's landscape almost as long as pitchers' duels and well-turned double plays."

The Japanese--their culture and their business practices--remained a prominent theme in business books through 1992. (And not just business books: This was the year of Michael Crichton's remarkably polemical thriller, Rising Sun.) The competitive threat posed by Germany appears to be gaining ground as a topic. One of the year's best books blends these concerns and explores the increasingly popular notion that the U.S. is at a disadvantage in its competition with these and other global rivals because the U.S. approach to education and worker training is inferior.

Global competition requires quality, service, and speed, observe former Labor Secretary Ray Marshall and think-tanker Marc Tucker in Thinking for a Living: Education and the Wealth of Nations (Basic Books). Workers at the point of production must be able to think and act for themselves. But the U.S. has failed to develop a coherent high-skills strategy, as have Germany and Japan. Our frontline workers, the authors say, "may be the least skilled among those of all major industrial countries."

To extend post-high-school education, Marshall and Tucker call for a national employment and training board to set broad labor-market policies. Local boards would adapt these policies and build training, apprenticeship, and employment systems around community colleges and vocational schools.

Workplace Editor Aaron Bernstein judges this the best book yet on the educational aspect of global competition. President-elect Bill Clinton drew many of his training-program ideas from theories espoused by Marshall and Tucker.

The Overworked American: The Unexpected Decline of Leisure, by Juliet B. Schor (Basic Books), takes up another issue involving the U.S. labor force. Schor, an economics professor at Harvard University, says that, contrary to expectations, and reversing a century-long trend, the average American works more hours today than 20 years ago. Looking at patterns in both housework and paid work, she concludes that hours have grown by the equivalent of one month per year. "Other writers have sounded the theme of an increasingly harried population--and some have disputed it," noted reviewer Troy Segal, BUSINESS WEEK's social issues editor. "But Schor . . . backs it up in effectively empirical--and alarming--terms."

Schor blames the work crunch on technology, which has increased expectations about what we can produce; employers' strong preference for longer hours; the addictive nature of consumption, which traps people in a work-and-spend cycle; and tough economic times.

Schor calls for giving white-collar workers a defined workday and paying them overtime--if not in the form of money, then in extra hours or days off. Her statistical analysis, which comes early, is heavy going, said Segal. "But bear with it: The Overworked American becomes a fascinating blend of social observation and economic theory."

Rounding out our choices of the year's best business books is a reference work of extraordinary proportions. The New Palgrave Dictionary of Money and Finance, edited by Peter Newman, Murray Milgate, and John Eatwell (Stockton Press), is a business buff's bonanza. Just published, and not previously reviewed here, it's more an encyclopedia than a dictionary in the conventional sense. Its three volumes contain 1,008 articles by 803 distinguished authors including economists, journalists, and working executives. The entries range from "risk" and "float" to "vector autoregression methods" and "Arrow-Debreu model of general equilibrium." This monumental work is descended from the famous Dictionary of Political Economy edited by R.H. Inglis Palgrave and first published in 1894. According to Senior Editor Chris Welles, it neatly balances theory with practice, opinion with fact, and history with topicality--though some essays on such market-related topics as junk bonds are already verging on obsolescence. At $595, The New Palgrave is no steal. But you just might decide you can't live without it.

    Before it's here, it's on the Bloomberg Terminal.