Freakonomics Radio

The firm was immortalized in the 1989 book, Barbarians at the Gate, about their leveraged buyout of RJR Nabisco.

Just to be clear, KKR were the barbarians.

Kelly is also the author of a book called Wealth Supremacy, how the extractive economy and the biased rules of capitalism drive today's crises.

When Kelly says extractive economy, she is talking about the private equity industry.

The claim is as much a provocation as the claim. It grabs the reader's interest. It's worked on you.

To hold that a European capital in the banks of the Danube lit the spark for most of Western intellectual and cultural life in the 20th century may sound like an absurdly extravagant claim.

And yet, Richard, this is the flame that you choose to chase in this book. So persuade me in just a minute or two that this claim is indeed neither absurd nor extravagant.

To support the claim, there are three main arguments. One is the breadth of the Viennese contribution. Other cities and other places produced outstanding achievements in certain fields, but it was the breadth of contribution that struck me about Vienna.

The big lesson for me, the thing that really changed my thinking, was a realization of just how fragile a society can be and how the arrival of nationalism and fascism can ruin in a short time what took generations to build.

The great Viennese writer, Steffen Zweig who killed himself in 1942 left behind a memoir called The World of Yesterday. It is a heartbreaking book about Vienna that in retrospect didn't stand a chance.

It was a city built on modern thinking. In its art and its politics, in its embrace of science as a foundation of society, it was more modern than many places today.

Here is a passage from The World of Yesterday by Stefan Zweig which he finished just before he and his wife killed themselves in 1942. In its liberal idealism, the 19th century was honestly convinced that it was on the straight and unfailing path toward being the best of all worlds.

Vince Packard did a famous book on this called The Hidden Persuaders, arguing that the Viennese, with all their new fangled psychological methods, etc., were manipulating you into buying stuff that you didn't really need.

Several important books above all, Cal Poppers, The Open Society and Its Enemies.

In 2014, just before running for Prime Minister the first time, he published a memoir called Common Ground.

He writes about the jobs he had before his political career.

Whether you are trying to assert your will in a bar room confrontation or a political altercation, he writes, The biggest obstacle to overcome is the human ego.

Common Ground reads primarily like a book designed to launch a successful political campaign, which it was and which it did.

But it's also interesting and thoughtful.

The Peter Principle states very simply that in any hierarchy an employee tends to rise to his level of incompetence.

I'm sorry. As many times as I've heard that phrase, I still laugh at it just because it sounds like it's going to be not irreverent and then it turns immediately irreverent, which makes me chuckle.

Oh, exactly. I think it's a funny idea, but it also rings true. And it's funny in an unpleasant way because it reminds people how much they dislike their bosses.

I saw that very often the competent individual was promoted to something he couldn't do.

The book he wrote with Raymond Hull was called The Peter Principle, Why Things Always Go Wrong. It wound up selling millions of copies.

In 2003 I wrote that book the future of freedom about a liberal democracy I basically made the case that the Arab world was fundamentally unready for liberal democracy because of oil wealth it had been able to stop the process of modernization economic modernization social modernization to an extent that no other part of the world had been able to.