Beach reading

It’s that slow time of the year, and for you boundary-less worker bees who just can’t leave the idea of business behind, here are a few great beach reads.

First off, what’s not to love about Ponzi: The Incredible True Story of the King of Financial Cons, by Donald Dunn? Many of us have heard of Charles Ponzi, the master swindler who set the bar for subsequent scams. In fact he gave fiscal pyramiding its very name. This Italian immigrant earned his infamy for bilking thousands of Boston-based investors in 1920. What began as a dicey financial promise involving the redemption of international postal coupons got out of hand for Ponzi, who discovered a simple, albeit dishonest, way to deliver on his promise of huge returns. Ponzi paid off existing investors with the money coming in from new suckers, thereby creating an illusion of success sufficient to generate favorable publicity and hordes of huge new investors. Until of course it all came crashing down.

Dunn’s book tells the Ponzi tale with baroque detail. While his device of recreating dialogue in scenes feels contrived at times, his overall attention to detail and character makes for an entertaining read. Besides, this tale of manic American chicanery merits stylized story-telling. And Dunn’s careful attention to the rosy economic mood of American investors that formed a context for Ponzi’s story is fascinating.

By the way, this book is part of a extremely cool Library of Larceny series from Broadway Books that also includes Where the Money Was: The Memoirs of A Bank Robber by Willie Sutton and McGoorty: A Pool Room Hustler by Robert Byrne. These books feature sepia-tone covers that perfectly convey a pulp-y feel to the series, a great design choice that speaks to the high quality of these perfectly realized paperbacks. Highly recommended.

Next tout: The Land That Never Was: Sir Gregor MacGregor and the Most Audacious Fraud in History by David Sinclair. Published earlier this year to insufficent acclaim, this gem of a book shares the tale of a man whose financial fraud was so great and elaborate he makes guys like Ken Lay look like someone who fudges their expense account.

The book’s opening chapter sets the tone perfectly. A boatload of several hundred British citizens approach the land of Poyais in 1820, ready to work the land they have purchased, to set up new and prosperous lives in this Central American country with fertile soil, cheap labor, and endless opportunity. The only problem is that the country doesn’t exist. Everything about it was an invention of one of the great scam artists of all time.

The enterprise behind Sir Gregor MacGregor’s phantom venture is stunning. The man who called himself the Cazique of Poyais wrote a 350 page guidebook to his mythical land detailing climate and crops. He had currency printed for Poyais. So complete was his ruse that he not only persuaded hundreds of investors to buy property, but he convinced leading London banks to underwrite 200,000 pounds of commercial bonds to finance his venture!

This book is absurdly readable. My cover blurb would read “Business readers will have more trouble putting this book down than resisting the temptation to purchase IPO shares in eBay.” Like Dunn, the author manages to do more than tell a great story in isolation. By illuminating the cultural and economic context he shows how financial fraud, like great entrepreneurial success, needs the right opportunity in terms of timing and market and climate for optimization.

Finally, the MacGregor fable brings to mind one more book in the category of business fiction: Ricardo Semler’s The Seven-Day Weekend: Changing the Way Work Works. You may have heard of this ode to a kind of vocational joie de vivre, a fable by the CEO of a Brazilian company named Semco that has, he writes, grown from $35 million to $212 million in the past 6 years, due in large part to his ability to tell a story about the unconventional practices of the company, where workers set their own hours and salaries.

Semler’s book raises many interesting questions, but overall, I’d like to suggest that Sinclair’s title—The Land That Never Was—be used as a viable alternative to the current one. That’s because despite the reams of favorable coverage of his book, I have yet to read a story by a journalist who has actually visited the fabled Semco plant. And while many of his stories are engaging, to me they feel entirely apocryphal, and not transferable.

I promise a more in-depth post on this book soon. I have asked a Brazilian colleague of mine to look deeper into this story, and will post his findings when I get them. But in the meantime, sure, his book does make for entertaining reading. And I offer grains of salt to any readers who purchase it.

Posted by tom at 02:03 PM