Monthly Archives: December 2017

Selling the Yule Log

Author Gary Moreau, aka Avam Hale in fiction

In China Christmas Day is just another workday. Even the government offices and the banks are open.

The Chinese are aware that it is Christmas, of course, and merchants have started promoting the commercial aspect of the holiday. They get it. And many wealthy Chinese have bought in. They do it entirely by choice, however. The Chinese just aren’t very gullible when it comes to money.

For the first few years that my family and I lived in China I always took the day off, we had plenty of Christmas decorations (That’s where they’re all made, after all.), and we always had plenty of gifts for my young daughters. As luck would have it I had to come to the US each December to present the following year’s budget, so I inevitably lugged three large suitcases full of Wii consoles, or whatever was the popular toy of the year, back with me.

I was never once stopped by China Customs. The government is strict in some ways, but it understands priorities. I was a foreigner and they were happy to let me be one. (Unfortunately, we seem to have abandoned our own empathy on that front.)

When my family moved back to the States without me, however, I stopped celebrating Christmas. I went to work. It wasn’t just another day, but the difference was within.

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I still bought presents for my daughters, of course, but that wasn’t easy to do. You may not have heard this but if you want to shop online at an American retailer and the IP address you’re using originates in China, the store will automatically cancel your order. American business is a slave to process. China IP = cheating. They say that’s not profiling or racism, but that must be some kind of new math. (The same math, I suspect, that leads to the drug-related incarceration of African Americans at more than six times the rate of white incarceration despite comparable usage rates.)

I tried calling a couple of the biggest retailers on Skype and explained the situation. The people who answered were sympathetic, but in the end could do nothing. The computer just didn’t allow them the discretion to overrule my being blackballed. They did remind me, however, that a survey would be forthcoming and it would improve their Christmas if I could see my way to a good score. (It’s the commercialization of customer service, of course.)

I wasn’t deprived as a child, mind you. My mother loved Christmas. She worked on it for months. We went to church on Christmas Eve, my father took us caroling, my mother baked Christmas cookies, and we set out cookies and milk for Santa. I never saw Mommy kissing Santa Claus, but there were lots of hugs and the atmosphere was warm and loving.

This is my second Christmas back in the US. And my wife and I have consciously decided not to celebrate with decorations and gifts. We’re not atheists. We’re not even agnostics. We just don’t see the value in spending a lot of money on stuff we don’t need and destroying the environment in the process.

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Our leaders, of course, tell us that we have a duty as Americans to spend money. The economy depends on it. And if we don’t, American workers will suffer. And yet it is somehow uniquely American that we don’t even see the problem with that logic. (Or that we don’t recognize that it is foreign workers who will suffer since that’s where most of the stuff we buy as gifts is actually made now.)

It’s addiction logic. If I stop it’s going to hurt so I’ll just have another drink or snort another line of coke. Reminds me of the old joke about the Irish woman who took her husband up to the top of the hill overlooking the local brewery one night to prove to him that he couldn’t drink it dry. “No, but I got ‘em working three shifts,” he noted. (I’m Irish, if you want to skewer me on Twitter.)

It’s no surprise that Christmas has become so commercialized. We’ve commercialized everything in America. We’ve even commercialized waiting in line. Pay a premium and you can stand in a shorter line. And who needs net neutrality? Let ‘em pay. (Just remember to give those same big corporations a nice tax break for Christmas.)

The commercialization of American life really hit home for me on Christmas Eve, however. I was feeling a bit nostalgic and thought I’d find the tv channel that shows the Yule log burning. Talk about Christmas traditions.

I went through each of the 163 channels I now get but never watch. I found a whole bunch of channels that are a testament to how out of control we are commercially but I could not find the Yule log. Until, that is, I got to the 153rd channel or so. And there it was. But it was on a premium channel that I don’t subscribe to so it was blocked. The friggin’ Yule log is now pay to play, just like everything else.

The real problem I have with Christmas in America these days is that it is just another reminder of our social and economic division. The rich are hobnobbing in Aspen and the rest of us are watching them on Facebook and wondering why our lives are so boring.

The secular Christmas, of course, is a pretty crappy time for many Americans. The pressure to keep up is overwhelming to many. That’s not Santa shouting from the rooftops. It’s our neighbors telling the world how lame we are.

Wouldn’t it be nice if we had a collective Christmas for once? Wouldn’t it be nice if we just took a time out and devoted all of that effort and money to helping the people who need our help most? Christ knows (pun intended) there are enough of them.

I’m actually not a Grinch. I’m quite content with my life. China just gave me a different perspective. It helped me take “I” out of my life and replace it with “we.” It’s not as hard as you might think.

And you’ll feel better for it. Remember, “we” is just “me” with the first letter turned on its head. It’s all in the perspective.


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The Case for Collectivism

Author Gary Moreau, aka Avam Hale in fiction

In a recent survey reported by USA Today, one out of two American millennials preferred communism to capitalism, and 22% said they have a favorable impression of Karl Marx. For almost any American older than a millennial, this came as a complete shock, and, with few exceptions, has been characterized as a failure of the American education system to accurately portray history.

But is that a fair assessment?

I have a degree in Economics from Middlebury College, where I graduated with honors. I have spent an entire career in Corporate America, more than half of that in executive management. And I lived and worked for nine years in China, a collectivist state, where I managed a factory and a company, referred to as a Wholly-Owned Foreign Enterprise (WOFE), for a public American corporation. I believe, as a result, that I bring some experience and credibility to the topic.

Let’s start the assessment by dropping the labels. All of the relevant terms—democracy, capitalism, communism, socialism, and fascism—raise a lot of dust but have lost all of their original meaning. China is not a communist state. It is a collectivist state run by the Communist Party of China. The Chinese themselves refer to it as “socialism with Chinese characteristics.” I will refer to it simply as Chinese collectivism.

The United States, on the other hand, is not a pluralist democracy. The Founding Fathers went to great lengths to avoid the potential tyranny of the democratic majority. The three separate but equal branches of government (legislative, administrative, and judicial), the Electoral College, the unique structure of the US Senate, with two senators from each state regardless of population or economic strength, and the very specific and largely irreversible allocation of certain powers to state and local governments, all are designed to limit the power of the plurality.

Both China and the US allow free market forces to “manage” large parts of the economy. There are, however, two big differences. The first is that almost all property in the US, including intellectual property, is privately owned. In China, on the other hand, the government retains ownership of much of the common property, including all land and the natural resources it holds.

The Chinese collective also retains ownership and control of key strategic industries that have a broad social impact, including most of the banks and much of the energy sector. The Chinese government, moreover, maintains a well-defined national industrial and economic plan that guides public and private investment, in part through taxes, and provides strategic direction to the regulatory branches of government.

There are no government owned companies in the US, although the US Post Office and NASA are independent agencies of the US government. The General Services Administration (GSA), moreover, another independent agency of the federal government, oversees the expenditure of approximately $66 billion in government spending each year and manages about $500 billion of US property.

In total, government spending by the Chinese and US governments is about the same, at roughly $2.8 trillion per year; although the US economy is larger in total.

The US, however, has no national industrial policy, despite the amount of money spent by the government each year. While China targets key industries for development and protection in the interest of national security and social and economic development, the US, in theory, leaves such decisions up to the private sector.

That’s only in theory, however. In practice the US has a well-defined national industrial and economic policy. There has to be given the amount of money the government spends each year and the regulatory influence the government has over the economy. The real difference is that in the US government policy is left largely up to private individuals and corporations to define. Corporate lobbyists and corporate government relations staffers play an active role in actually writing government legislation and regulation, always, of course, in an attempt to promote the self-interests of their employers.

One of the primary vehicles for economic policy in the US is the US Tax Code. The Code itself, along with the supporting documentation and legal interpretation, runs to 70,000 pages in total, most of which is devoted to defining tax breaks and other financial considerations designed to favor one sector of the economy, or one segment of any given sector, over another. The 2017 Tax Reform recently approved by the US Senate itself required more than 400 pages to articulate what was supposed to be a simple reduction in tax rates. It wasn’t, of course.

That is why despite a top corporate tax rate of 35%, most large corporations pay considerably less. Google, in its last reported year, paid only 19%. Apple, one of the most profitable companies on the planet, and which holds $230 billion in cash in overseas accounts, paid only 25%. Asset rich ExxonMobil and GE both enjoyed tax credits, effectively sheltering all of their income from taxation, all based on provisions buried somewhere in those 70,000 pages.

Another way in which national policy is established in through government regulation and, once again, much of that has been turned over to the private sector, allowing business people and corporations to use regulation to benefit themselves and tilt the playing field in their favor. Many of these regulations are fraudulently sold to the public in the name of consumer protection, but the protection of certain businesses and their profits is the real objective.

In the state of California, for example, you cannot cut hair for a living unless you receive 5,000 hours of training at a state-accredited for-profit barber school. It’s doubtful that enough Californians complained about bad haircuts to push the state legislature into action. It’s far more likely, and almost certain, that the barber schools, in partnership with the existing barbers looking to sustain higher prices, lobbied for the legislation and were readily obliged.

In my own state of Michigan Tesla cannot sell its cars directly to consumers utilizing the business model it has built its business on. And the reason is not Ford, GM, or Chrysler. The reason is the independent automobile dealers association that has used its political muscle in Lansing to push for such protection. Michigan is not alone. Independent dealers in many states have successfully lobbied their state legislators for protective legislation that goes well beyond any legitimate consumer interest.

The list is endless. It was recently announced that a common medication for erectile dysfunction may soon be available over the counter in the UK, thus reducing its price and freeing up doctors to spend their time on more pressing health matters and thus reducing health care costs. In China, many common medicines, except narcotics, are available directly from pharmacists without a doctor’s prescription.

The US, on the other hand, has one of the most restrictive set of pharmaceutical regulations on the planet. It’s one of the reasons the US spends more on healthcare than any other nation despite the lack of universal insurance coverage. It’s all justified on the basis of consumer protection, of course, but it coincidentally maximizes the profit of the big pharmaceutical companies and, by the way, we have a huge opioid epidemic anyway. (Why don’t we treat prescription drugs like guns? Opioids don’t cause addiction. The people who abuse them do.)

In the end, as I’ve noted, the biggest difference between Chinese collectivism and what I will call Americanism is in who defines government policy and who owns the country’s collective assets.

No individual or corporation owns land in China. It’s owned collectively by all of the people of China and managed on their behalf by the Communist Party. As a practical matter, the distinction doesn’t have much impact on daily life. The feel is the same. Both my home in China and the factory I managed sat on land owned by the people of China but managing either one felt pretty much the same as it does here. As they say, possession is nine-tenths of the law.

If the day to day difference between collective ownership and private ownership of property is immaterial, it has a huge impact on who decides how to use that property. In the US, that right resides with the individual and the private corporation. In a collectivist state, that right resides with society at large.

Over time, of course, the US has discovered the inherent weakness in private ownership of property and has sought to restrict usage through zoning laws. The local zoning board, however, is entirely local and fairly easily swayed in favor of development by their aligned interests and political pressure, so the practical effect has been very limited. Wealthy developers still have the power to do what they want in the pursuit of profit.

What we can’t do as a country, however, is build new airports, new train systems, or more efficient highways. And that’s because the rights of the individual, the cornerstone of Americanism, are protected by a strong judicial system. Large infrastructure projects can be tied up in the courts for years, if not decades, effectively prohibiting the kind of large infrastructure projects that the Chinese excel at. (Many experts believe that this deficiency alone, will ultimately compromise America’s global leadership.)

America can’t, in other words, adapt to technological innovation. We didn’t have airplanes, automobiles, or high-speed trains, all of which require land-intensive infrastructure, at the time of the nation’s birth when the principle of private ownership of land was established. We had canals and roads and harbors, but these were easily accommodated through the legal concept of eminent domain. Even that collective protection, however, has been severely eroded by the courts and the politicians, both of which are easily exploited by wealthy developers and other corporate interests.

In theory, of course, the American government is accountable to the people. That theory, however, has been severely tested by the passage of time and the steep cost of running a successful modern political campaign. Money, not ideology, now controls the American political process. If there is anything to be learned by the recent rash of political resignations and decisions not to seek re-election it is that political power does not accrue to the men and women of the highest integrity and civic mindedness. It accrues to those who can harness the most money and power.

So, in the US, in theory, we have a paragon of free market capitalism and democratic freedoms. And in China we have the last remaining socialist superpower, where the press is censored, there are no free elections except at the local level, the government retains ownership of key industries and the country’s largest companies, and there is no private ownership of land.

In practice, however, the US, by its own admission, suffers from ongoing sexism, racism, and religious prejudice. Mass murder is almost a daily event. Drug addiction is rampant, wages are stagnant and have been for decades, inequity in wealth and income is expanding, and social unrest and general disillusionment is now the standard.

China, on the other hand, in practice, has raised 300 million people out of poverty in one generation, violent crime and mass murders are rare, the best schools are equally accessible to everyone, virtually everyone is employed, wages have been rising at rates far above the GDP, and the President’s approval rating is among the highest in the world, many times that of our own American president.

Why the disconnect? In a word, context.

Personal freedom and economic well-being do not exist in a vacuum. They exist in the context of a complex web of political, social, technological, and economic conditions that, in the case of the US, have changed dramatically since the country’s founding.

Consider this small sampling of facts:

  • There were 2.5 million people living in the US in 1776. There are 315 million people here today.
  • The entire landmass of the original thirteen colonies was 339,000 sq miles. The US today covers 3,678,000 sq. miles.
  • The only guns available when the Second Amendment was ratified in 1791 were the single fire musket and the flintlock pistol. In the hands of the most skilled operators they had a capacity of about three rounds per minute and were accurate only at very short distances. The Las Vegas shooter, who killed 58 and left 546 injured, by comparison, was able to fire 1,100 rounds in under ten minutes, massacring innocent civilians at a range of almost 500 yards.
  • The first train locomotive to run on US rails did not go into operation until 1829. The first American car was not built until 1893. The first commercial flight did not take place until 1914.
  • The pharmaceutical industry, as we know it today, did not come into existence until the mid-20th Century.
  • The Internet has been in widespread existence for less than thirty years.
  • The 16th Amendment, legalizing the income tax and creating a powerful tool for social and economic engineering, was not ratified until 1913. The tax system we know today did not come into existence until 1954.

In short, our world, and the context in which our political and economic systems operate, has changed dramatically. Yet we still attempt to manage it all with political and economic systems that are built on the ideological premise of the supremacy of the individual over the collective.

Advances in technology drove much of this change. Technology has entirely transformed how we work, how we live, how we travel, and how we communicate.

At the time of our founding, our news was limited to the local newspaper and the men and women motivated enough to grab a soapbox and stand on a street corner. Politics was a part-time profession carried on by people moved by a sense of civic duty. The world of the average American, in short, was a decidedly local world and he or she lived and worked with relative autonomy.

Technology, both directly and indirectly, has made the world both bigger and smaller, connecting us all in real-time. It has also, however, driven the commercialization of every aspect of our lives. It is no longer possible to live a dignified life of poverty, even if you so choose. There is virtually no alternative to money. Even the original social safety net—nature—has been taken away. Living as a self-sufficient farmer or hunter-gatherer in the wilderness is no longer an option. The socio-economic complex in which we live forces everyone into the economic game. Compete or perish, with perhaps a short and undignified stay in government entitlement along the way.

As America grew and prospered, however, an unintended consequence began to emerge. Most of the wealth creation went to a relatively small segment of the population. As time went by, moreover, the system was incapable of correcting itself. The rich, now called the 1%, continue to get richer while the other 99% struggles to get by. Many, in fact, have failed in their quest and are either homeless, addicted, or both. And, most importantly, their hope is lost.

There are more than 540 billionaires in the US today, who share a collective net worth of $2.4 trillion, more than the total GDP of India, a country of 1.3 billion people. Half of Americans, however, make less than $30,000 per year and have virtually no personal savings and sizable amounts of debt. (Student debt is a national crisis.)

Another unintended consequence of this massive wealth creation and its concentration is the creation of a permanent political class. An economy this big and a society this large require full time management.

The two developments—the enrichment of the economy and the creation of a professional political class—were fundamentally inter-related. Modern politics takes a lot of money and the Founding Fathers made no provision to provide it. The need for private funding, in turn, further embedded private citizens of wealth into the political process. And when, in 1886, the U.S. Supreme Court applied the 14th Amendment to give corporations the same legal rights, other than voting, of the individual citizen, the modern era of politics was born.

And it’s not working. And it’s not working because the context has changed. We live in a very different world than we did in 1776 and yet we are attempting to manage it with the same individual-centric political and economic systems developed more than two centuries ago.

The People’s Republic of China, on the other hand, has been in existence for a little over 60 years. And while the Communist Party of China is still in charge, the economic and social management systems have been entirely transformed. Chairman Mao himself would surely not recognize the modern China.

By adapting to change, however, China has emerged as a global superpower and many are predicting that the American Century will soon give way to the Chinese Century.

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Many in America, of course, will argue that China transformed itself by following the example of the US and adopting many of the provisions of free market capitalism. It is these same people, moreover, who believe that the path forward should be to double down on what has worked in the past. We don’t need to adapt, in other words, so much as we need to go back to the perceived purity of the political and economic systems we employed two centuries ago.

It is pure folly, of course. Even if we could turn back the clock, which we can’t, those systems and ideals would no longer work. The result, in fact, would be disastrous; on a par with asking corporations to live without computers or teenagers to live without smart phones.

Technology has so empowered the individual that no single individual can be given the kind of power historically granted to the individual American. It is simply unworkable. What worked when we were few and largely isolated and spent our days farming and hunting, will simply not work today. It would be like giving every colonial soldier a nuclear bomb and telling them to go win the war. They would ultimately win the war, but like the 1%, would dramatically transform the country itself.

In the end, the millennials are right. They may have the details wrong. (The referenced study’s sponsor noted that most of the millennials who voted for communism were unable to define it correctly.) They are, however, right in their instinctive belief that in the modern world in which we live and work, the collective society, not the individual, must reign supreme.

Let’s not call it communism, or fascism, or any of the traditional –isms, because their critics are right; they didn’t work either. And libertarianism, the system of choice for both the alt-right and Silicon Valley, won’t work any better. That would be just doubling down on what we already have and would simply accelerate our decline.

And I am not suggesting we simply imitate the Chinese or try Marxism yet again. The former, for a lot of social and cultural reasons I don’t have space for here, won’t work in America. And Marxism, while ideologically attractive at some level, simply isn’t tenable.

What we need instead is a new form of collective governance that puts the interests of the collective society above the liberties of the individual and manages our collective interests and assets in a way that allows some level of individualism without allowing it to suppress or circumvent the collective good.

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You may contact the author at
Visit my personal blog at

Follow on Twitter @gmoreaubooks

Here’s what legendary Kirkus Reviews has to say about the author’s new book: “More than a guidebook for managers, this is a manifesto for an intellectually deeper – and happier – world of business.” Kirkus Reviews (starred review)
click here

The latest in the Understanding Series is now available.
click here

What Would Sun Tzu Do?

Author Gary Moreau, aka Avam Hale in fiction

With North Korea’s recent successful test of a Hwasong-15 missile that reached an altitude of 2,800 miles, more than ten times the altitude of the International Space Station, Kim Jong-un is back on the front page. This, experts suggest, gives the hermit nation the established ability to strike Washington, D.C. with a pre-emptive nuclear strike launched from within its own borders.

When confronted with the issue by reporters, Trump, characteristically, was dismissive: “We will take care of it.” How, exactly, no one knows. Sanctions clearly haven’t worked and whatever diplomacy Secretary Tillerson has been pursuing behind the scenes apparently hasn’t either. (Adding even more urgency to the issue, Tillerson, the one politician even broaching diplomacy, is rumored to be on the way out.)

According to The Washington Post, “A growing chorus of voices in Washington is calling for serious consideration of military action against North Korea,” although it is inconceivable that such options have not already been considered and ruled out as impractical. The loss of life, particularly in South Korea, would easily rival the 20 million Russians who perished during World War II, redefining the geopolitical landscape for decades to come.

China has clearly noted that it would consider any pre-emptive strike by the US to be an intolerable violation of sovereignty. Such military aggression, moreover, would be senseless unless the US was willing to follow its ordnance into the country to pick up the pieces and reshape the nation, and there is virtually no way the Chinese would allow this to happen without their strongest possible resistance.

Depending on whether Trump or China is higher on their derisory priority list on any given day, many Western media outlets have attempted to position the latest missile test as either indicative of China’s failure to follow through on the perceived commitment to resolve the Korean Peninsula issue, or Trump’s foolhardiness for believing he had that kind of personal pull in Beijing.

Personally, I think there is little incentive for China to do anything except sit back and watch. If it believes that Kim’s regime will ultimately collapse, it has little to gain by getting its hands dirty now, short of preventing the US from establishing a US military presence on the 880-mile border China shares with North Korea. Let it collapse and then step in to either push for a unification of the Korean Peninsula, with security and political assurances from the current South Korean government, or turn North Korea into an autonomous Chinese political zone not unlike Hong Kong, Macau, or Tibet. (The latter, I believe, is the more likely scenario, all things considered.)

Two things, I believe, we can say with certainty:

1. Given any say in the matter, the people of North Korea will choose a Chinese protectorate over a US protectorate. Unless South Korea takes significant steps to distance itself from the US they will not, in all likelihood, even choose unification over China. Dennis Rodman’s diplomacy aside, the North Koreans do not see the US as Donald Trump sees us.

2. China will do nothing to give Trump face. In other words, he will accomplish nothing with China’s help if they believe he stands ready to take credit for it. He is quite literally shooting himself in the foot by touting his relationship with Xi Jinping in the context of his great self-acclaimed negotiating skills. To give Trump credit would be to compromise the Chinese Dream that is at the heart of Xi’s political agenda and legacy. He won’t do it; he has no incentive to.

To this latter point, I am quite confident that China did not release LiAngelo Ball and his UCLA basketball teammates after being arrested for shoplifting in Hangzhou because Trump asked them to. They did so because they concluded that it was in their best interest. It may, in fact, have been a simple test to see how Trump would respond.

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Trump’s reaction, in fact, could not have been worse in terms of his future ability to influence Chinese behavior. In his willingness to start a Twitter feud with LaVar Ball, Trump demonstrated beyond a doubt that he has no understanding of Chinese culture and the importance of face, particularly in the political arena. Certainly someone in Washington understands this.

I believe the most effective option for the US and the world remains the same. The US must withdraw its military presence from the Korean Peninsula unilaterally, while maintaining its commitment to protect South Korea from aggression using all of its resources, including nuclear weapons, if necessary.

Given the unlikelihood that a contained exchange of cannon fire along the 38th parallel will be sufficient to convince Kim Jong-un to dismantle his nuclear capabilities, it is hard to see how a military withdrawal from the Korean Peninsula would materially compromise the US’ treaty obligations to South Korea or Japan.

Nor would it, in fact, cause a US loss of face in the region. As famous Chinese military general Sun Tzu is often quoted to have said, “The supreme art of war is to subdue the enemy without fighting.” In the eyes of Asia, it would take a strong and courageous America to unilaterally to pursue such a strategy, putting the clear burden for resolution of the North Korean problem at the doorstep of Beijing’s leadership.

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The proof is in the rhetoric. Why has China not seen fit to rattle its sword to the extent President Trump has? Why are there no anonymous quotes coming out of the Great Hall of the People? Is it because China is afraid? Or is it because China is clever and understands the importance of face in true diplomacy?

China can resolve the North Korean problem. And it will, if we allow them to solve it at their own pace and in their own way. In the meantime, North Korea is contained. There is no way that China will allow Kim Jong-un to unleash a single nuclear device on Guam, Japan, or the US. And there is no way that China would not know of such an attack long before the missile leaves the ground.

What is it that American diplomats are so afraid of? Does the Munich Pact still haunt the souls of our diplomatic core? The times and the circumstances could not be more different.

This would not be peace through appeasement. This would be peace through strength and confidence and a willingness to put humanity above any one individual’s standing in the polls. This is not an issue for Twitter. This is an issue for men and women of greatness to take the lead in the name of peace and stability.

If they fail to do so, history will not remember them kindly.

You may contact the author at
Visit my personal blog at

header photo credit:

Follow on Twitter @gmoreaubooks

Here’s what legendary Kirkus Reviews has to say about the author’s new book: “More than a guidebook for managers, this is a manifesto for an intellectually deeper – and happier – world of business.” Kirkus Reviews (starred review)
click here

The latest in the Understanding Series is now available.
click here