Gregory Mark of Rutgers School of Law has been kind enough to contribute another review of Larry Mitchell's book, The Speculation Economy: How Finance Triumphed Over Industry:

It is a pleasure to see a fine mind at work.  Larry Mitchell, long known as something of an iconoclast among scholars of corporate law, has in recent years turned towards the history of corporate law.  This book represents what I, at least, hope is but the first of his book-length efforts in history, for it demonstrates the explanatory power of a deft mind with a talent for prose.  The book should also serve to remind the legal academy of one of its grandest traditions (and its attendant cautions), the law professor as autodidact.

Mitchell’s thesis, that finance has subsumed industry and that it is possible to identify a moment - really a moment crossing several years - when the conquest of commerce by finance took place, is one about which I have more than a little reservation.  But his identification of the thirty year period from 1890 to 1920 as somehow transformative is certainly correct, though not unique to him.  Mitchell’s contribution, and it is a major one, is to combine the business history of that period with the legal history of the period and to demonstrate that the two were intimately connected.  As with any fine work of history, however, even if the thesis is contestable, it provides an invaluable set of insights and explanations.  I wish to single out but one explanation and one insight built on a metaphor to demonstrate the virtues of the book, before delving into my quibble with the thesis.

Watered stock.  To a modern law student, a modern lawyer, or a modern person of business, that concept is utterly foreign.  When an occasional reference to watered stock appears in a casebook or history, by definition universally pejoratively, I would guess that most people read right over it, happy to know that it was bad but unconcerned about why that might be, or even what it is.  Yet, until roughly World War II, it was a concept that excited the imagination of financial manipulator and reformer alike.  Mitchell provides the definition, “stock [issued] at a par value higher than a corporation’s tangible economic value.  The difference was called ‘water.’” (59) The evil is seems clear.  The seller somehow cons the buyer into paying more than the stock is worth.  Of course, much depends on the concepts of “par value” and “tangible,” but the nature of the scam is clear.  Mitchell’s elaboration on the anxieties provoked by watered stock is nothing short of brilliant, the more so since he understands that modern finance simply scratches its head at such a notion.  To the modern market, assuming a reasonable flow of truthful information, the selling price is the price is the price, and a company is worth not its tangible assets, but the value of its projected income streams compared to other available investments, each valued the same way.  But, in eras when truthful flows of information were themselves rare, and legal protections relatively costly, reliance on “par” and “tangible” had meaning they lack today.  And, of course, the triumph of finance, Mitchell argues, is premised in part in a change in attitude, from regarding a company as a collection of assets to a mechanism for the production of income.  His explanation of watered stick is thus the best I have ever read, both for its clarity and for its significance historically.

Mitchell’s virtues as an author, however, are not limited to clarity of exposition.  He can turn a metaphor with the best of them.  What better metaphor than modern financial instruments as somehow agricultural to make the new understandable to citizens in a society in flux?  Watered stock is, after all, itself a metaphor for the dark side of the transformation.  The agricultural metaphor’s positive force, or at least its legitimating force is one that, to my knowledge at least, is best developed by Mitchell’s work.   And, he knows it.  With a becoming modesty he notes that, as a new form of property, the stock market could fill the evaporating role of the land ... in classical American life and thought. ...  I exaggerate only a little to say that this idea of corporate securities as the new family farm helped to legitimate the stock market as an American institution[.]” (4)  As an author he knows that the metaphor works its spell not just on the subjects about whom he writes, but on the reader as well, making smoothly understandable the jarring transitions of the era.

Alas, however much I admire the work, I simply cannot bring myself to subscribe to its ultimate thesis, that somewhere between 1890 and 1930 finance came to dominate industry.  I am perfectly prepared to believe, and do believe, that Mitchell demonstrates that this era represents such a shift, but that it represents the shift is something else again.  The capacity of finance to dominate industry has been a perpetual fear that has reared its head episodically throughout the history of the republic.  The fear of foreign financiers dominated much of the early nineteenth century.  The first national bank’s charter was allowed to lapse because of such fears.  The prevalence of those fears was not without cause.  The industry of America was commercial agriculture in that era, and the indebted farmer’s perpetual plight is a standard trope of the period’s politics and literature.  The farmers whose land was seized in foreclosure, and then sold off by financiers at their profit, was but a precursor to the railroad and industrial reorganizations in Mitchell’s decades.  And in the decades after Mitchell’s era corporate managers fought, and largely succeeded, in keeping finance at bay, financing growth through retained earnings and dipping into capital markets as lightly as possible.  Managers, always accused after Berle and Means of not wanting to answer to shareholders, shared a palpable aversion to answering to financiers also.  If one is to believe the work of people like Ron Chernow, for example, investment banks moved from financing and reorganizing industries to countries at the end of Mitchell’s period.  For a variety of reasons, some legal, some macroeconomic, and some political, financial institutions played second fiddle to the companies for which they raised money for some time after the Second World War.  While anecdote is of limited evidentiary value in contending with a thesis as sweeping as Mitchell’s, allow me to proffer two: IBM and Barbarians at The Gate.  IBM, an industrial icon, borrowed no money on the bond markets in its computer manufacturing days until the last few years of the twentieth century.  The story of Ross Johnson’s corporate folly is the story of a man who invited the financial community in because he succumbed to the siren song of the buyout, not because he was not having fun and living well running the company (shareholder welfare to one side).  All this is to suggest not that Mitchell is wrong in the story he tells, but rather in the significance he attributes to it.  American business history is, it seems to me, better described the story of a tension between financial and commercial/industrial entities.  In some periods, for some reasons, finance dominates.  In other periods, it does not - it is sleepy.  In some years Harvard Business School graduates flock to industry.  In some years they do not.  Mitchell tells the story of an era better than any I know, combining technical legal expertise with a nuanced understanding of finance, commerce, and industry developed from prodigious research and the realism of someone who sends lawyers from law school into the trenches.  The transformation he interprets is vital, but hardly final.  In history, as in ideas, there are no final victories.

Thus, my final comment, not really on the book but on the project.  The legal academy is undergoing a profound change, in which the profession is being sliced up into turfs dominated by individuals with additional professional training, be it economics, history, philosophy, medicine, what have you.  An unfortunate by-product of this otherwise salutary intellectual development, is a kind of balkanization of the collective endeavor and a concomitant tendency to devalue the work of those without the formal training.  Mitchell reminds us that important contributions can come from those who master material, whether they burnish their resume with academic epaulettes or not.

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Like the other reviewers, I quite enjoyed Larry's detailed description of the "formative era of American corporate capitalism" from 1897-1919. While Larry obviously is concerned about some of the effects of American corporate capitalism -- most importantly, the ways in which industry responds to the demands of finance -- this book is not a polemic. In the end, the power of Larry's telling lies in the simplicity of his thesis: "The speculation economy was a common stock economy." (193)

Larry sets the stage in Chapter 1 with an account of the founding of the American Economic Association as an attempt to encourage "perfect freedom in all economic discussion." The founders were breaking away from what Larry calls the "orthodoxy of laissez-faire," and the proposed platform -- drafted by Richard T. Ely, who as a professor at the University of Wisconsin was the object of a "trial" that became one of the great landmarks in academic freedom in the United States -- read as follows:

We regard the state as an educational and ethical agency whose positive aid is an indispensable condition of human progress. While we recognize the necessity of individual initiative in industrial life, we hold that the doctrine of laissez-faire is unsafe in politics and unsound in morals; and that it suggests an inadequate explanation of the relations between the state and the citizens.

Even though the condemnation of laissez-faire did not survive the inaugural meeting of the AEA, this proposed platform sets up the tension that Larry wants to explore: the role of the state in channeling the market. He spoils the punchline in the Preface: "The story of the formative period is a story of problems misperceived, transformations not yet understood and misguided regulation."

The portion of Larry's story that most fascinated me was the merger wave of the 1890s, which made "the business of America into the business of finance." (56) Contemporary observers were consumed by the issue of "overcapitalization," though the nature of that problem is difficult to pin down. As Larry reminds us, "capitalization" was a formal concept, referring to the nominal value of the stocks and bonds issued by the corporation. "Overcapitalization" meant simply that "the corporation was capitalized in an amount that was greater than the cash value of the assets that appeared on its balance sheet." (58) To modern eyes, this seems like a rather silly thing to be worried about because modern theories of valuation make the nominal values of value of stocks and bonds irrelevant. Larry acknowledges this, but notes that he is not much concerned about the substance of overcapitalization. Instead, he is interested in the fact that legislators believed that is was a real economic problem.

This belief led to an exaggerated concern over the potential for monopoly because, the reasoning goes, only through monopolization could promoters obtain the profits necessary to support their excessive issuances of stock. By focusing on the potential for monopolization, rather than on the market's need for information to produce accurate valuations, regulators encouraged expansive issuances of stock. Thus, "corporate promoters introduced the new middle class to the stock market, and it is here that both investor and market were transformed."

This is a bizarre tale, but one that must be understood to fathom capitalism as it is currently practiced in the United States and, increasingly, elsewhere in the world.

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"We are all capitalists now," I like to tell my students.  Our savings, our mortgages, our retirements, our insurance policies--literally, our futures--are all tied up with the capital markets.  The mortgage meltdown offers a timely illustration:  even financially conservative homeowners are suffering harm, as real estate speculation, overbuilding, and foreclosures push up the supply of housing stock and deflate the value of all the houses in the neighborhood, not just the ones in foreclosure.

Larry Mitchell's book The Speculation Economy:  How Finance Triumphed Over Industry explains how we got here.  The book offers a rich historical account of the Merger Movement, the growth of big business in America, the popularization of stock market investment beyond elites, and regulatory failings all along the way.  Larry identifies several important trends in the early decades of the twentieth century that together created the Speculation Economy--the switch from balance sheet firm valuation to valuation based on capitalized earnings; the popularizing of stock investing to the middle class; the gradual inclusion of common stock in the investment portfolios of average investors, who at the turn of the century were generally willing to hold only corporate bonds, and possibly some preferred stock for the true risk lovers.  These trends together ultimately enabled finance to triumph over industry.  Firm managers came under new pressures from the stock market to produce short-term profits, so that they could meet their dividend obligations or show consistent stock price appreciation.  These demands of the stock market, increasingly populated by diversified small holders who cared more about stock performance than the business of the corporation, would eventually create incentives for corporate managers systematically to sacrifice long-term goals in order to pursue quarterly earnings targets.

Larry's analysis of the interplay of these various trends, along with the federal government's inability to effect regulation to stabilize the economy, is interesting and provocative.  I loved the book, but I have a serious quibble over--of all things--the title. 

The title oversells in some sense.  Larry's focus is not on promoter fraud or market manipulation or frenzied bubble activity--what we ordinarily might think of as speculation, and episodes of which all occur in Larry's telling.   Instead, Larry's focus is on the normal, mundane operation of financial markets, independent of any scandal or panic.  His view, which he makes explicit in his epilogue, is that "the American economy is intrinsically  speculative even under normal conditions."  For Larry, what is intrinsically speculative is--please correct me, Larry, if I overstate--that individual middle class investors would invest in common stock and accept discounted cash flow valuation as a meaningful analytical tool.  Valuing stock based on what a company might earn--as opposed to its liquidation value--necessarily involves some subjectivity, which means that to some extent, stock investors are all guessing what other stock investors think a stock is worth.  But this happens in any liquid market. 

"Speculation" is of course a disparaging term for Larry, but his essential discontent is a discontent with modern finance.  To be fair, Larry offers careful description of the historical context in which common stock investing becomes widely accepted, and seen in this context, it does seem kinda wild.  On the other hand, the same historical progression could as readily be seen as a triumph of financial progress--both technical progress in terms of valuation and portfolio theory, and social progress in terms of the democratization of investment markets.

Related to the title is--of course--the subtitle:  How Finance Triumphed Over Industry.  Finance did not triumph over Industry in Larry's story.  And though I was waiting for the conflict and triumph for several hundred pages, no such tension or resolution occurred.  Instead, as the Epilogue eventually makes clear, the period Larry covers--through 1919--merely sets the stage for an eventual triumph of Finance over Industry, when CAPM and the takeover boom of the 1980s really push corporate managers to short-termism.

Regardless of titular quibbles, I thoroughly enjoyed the book.  I learned a great deal about historical episodes I knew nothing about, as well as historical episodes I knew something about.  Anyone interested in US corporate history should read this book.

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First, thank you to everyone participating in the book club.  I had the chance to read Larry Mitchell’s book, The Speculation Economy, on the train to and from New York and I found it to be a fascinating read.  I thought it was gong to be a journey into the economic history of the stock market—and it was.  However, what grabs the reader’s attention is the colorful and clearly well documented stories about this era (such as the back and forth between President Teddy Roosevelt and Maine Representative Charles Littlefield with respect to the attempts at federal incorporation).  In this regard, the book was an economic and social history lesson.  For me, the various personal stories behind the shifting economic landscape and the level of detail within those stories were critical to understanding how the era took shape and for telling a cautionary tale about the modern market.  Indeed, to the extent that similar influential players have emerged in today’s market (with similar colorful stories), The Speculation Economy underscores the importance of recognizing those players and their potential impact on the direction of our economy and society.  In this regard, the book suggests the need for greater attention to the social, political, and economic forces that mold the market.  At bottom, one critical lesson is that the structure of the market is not the inevitable result of efficiency, but the result of complex factors that can be manipulated (even at the risk of efficiency) and need to be controlled.

As the title suggest, the main theme of the book is to demonstrate the manner in which what Larry calls the “speculation economy” emerged, and also to indicate some of the drawbacks of such an economy.  In this regard, the book pinpoints the myriad factors that emerged so that investors shifted their investment strategy from buying bonds and preferred stock to being speculators—or widespread purchasers of common stock.  Within this context, I found the discussion about dividends intriguing. As Steven Banks points out, the dividends issue may be subject to different interpretations.  Yet I found it illuminating, particularly as it relates to broader observations about the merits of short-term and long-term investment horizons often seen in corporate scholarship. The book uses historical data to reveal that investors went from expecting regular dividend payments to an investment strategy that focused on price appreciation, pursuant to which dividend payments were not expected; instead the expectation was that earnings would be retained and reinvested to spur growth and appreciation.  In this way, the book uses the treatment of dividends to show that investors changed from viewing their investment as a form of guarantee to an investment that was focused on more speculative and uncertain price appreciation.  However, what is the meaning of this change? 

On the one hand, this shift can be interpreted as a positive development, reflecting the American investors’ change toward a long-term investment horizon without a focus on short-term profit.  Indeed, presumably the investor that demands dividends has an interest in ensuring that a corporation meets it financial expectations on a regular, and hence, short-term basis.  By contrast, an investor concerned with price appreciation cares less about the short-term and more about the business specific advances that will lead to long-term appreciation.  In this regard, one can view the story about dividends as in conflict with the story of short-termism.  On the other hand, later portions of the book underscore the notion that short-termism is not an inevitable result of the speculation economy.  More importantly, it seems that the crux of the shift as it related to dividend expectations was not one that focused on the distinction between a short-term investor and a long-term investor, suggesting that such dichotomy in the literature may not be as useful as some scholars believe.  Rather, the shift relates to investor expectation.  The investor focused on dividends has a specific and fixed expectation.  While the investor focused on price appreciation does not.  Moreover, the investor focused on price expectation is encouraged to believe that the sky is the limit with regard to profit.  This in turn generates pressure not only to show appreciation (sometimes by whatever means necessary), but also to pursue as much profits as possible without any other clear guiding principle.  From this perspective, the book does a good job of pointing out that the shift from a fixed payment investment regime to speculation caused a shift in expectations that needs to be better managed. 

Importantly, the book does not indicate that the speculation economy is inherently bad.  Instead, Larry refers to such economy as a “neutral fact.”  In this regard, he acknowledges that the market produces benefits and that there are positive aspects of the market that we should embrace.  In fact, the triumph of finance over industry does not mean that we inevitably ignore all industry-specific concerns in favor of profit.  However, the triumph does suggest that the speculative market is capable of exploitation in ways that other markets may not be.   

Then too, the book’s account also has implications for those interested in corporate social responsibility.  Such advocates may find these remarks in the book’s preface disheartening.  It is there that the book notes, “our speculation economy. . .has pushed American social norms from a vision of collective life that achieved currency during the Progressive Era to a more atomistic form of individualism that has both recalled an earlier American ideal and driven the future.”  On the one hand, this may suggest that the pressure to focus on profit and ignore issues of social responsibility may be deeply embedded and hence especially difficult to counteract.  On the other hand, the book suggests that there is room for socially responsible behavior.  However, the book also suggests that such behavior will not emerge as a natural result of individual altruism, but must somehow be affirmatively fostered.  In this regard, the book encourages the work of those seeking to shape the behaviors of corporate managers, while validating its importance. 

Ultimately, the book adds an important piece to the puzzle of our economic markets, and has implications for a variety of different corporate law debates.

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Welcome to the Conglomerate Book Club! As we announced in October, we will be focusing today on  Larry Mitchell's new book, The Speculation Economy: How Finance Triumphed Over Industry. We will be posting reviews throughout the day, and we encourage our readers to join the discussion in the comments. For our first review, we are grateful to Steven Bank, Vice Dean and Professor of Law, UCLA Law School:

Larry Mitchell’s latest book, The Speculation Economy: How Finance Triumphed Over Industry, is an impressive tour through an important period in the history of American business and financial history.  As Mitchell describes in fine detail, the emergence of the modern large corporation, the separation of ownership and control, and the expansion of the stock market, all occurred or accelerated during the end of the nineteenth century and the first two decades of the twentieth century.  While each of these developments has been studied in the past, Mitchell’s book may be the first to tackle all of them in an attempt to locate the birth of the modern corporate economy.

Moreover, Mitchell manages the difficult task of providing the type of detail and citation sufficient for scholars while still maintaining the readability and accessibility important for reaching a broader population.  While I wouldn’t exactly call it beach reading, I read the book cover-to-cover on an airplane while on a round trip flight to the East Coast.  Mitchell accomplishes this balancing act in part by collecting a number of interesting anecdotes about this period, such as the origin of the term “watered stock” (think thirsty cows being driven to market for weighing), and by profiling some of the oft-forgotten lawyers who facilitated the great wealth accumulation, such as James B. Dill of New Jersey.

But the folks here at Conglomerate aren’t paying me to just praise the book (actually, they aren’t paying me at all, but that’s another story).  It’s clearly worth a read, but that isn’t to say there aren’t things that struck me as odd or as missing.  Perhaps most fundamentally, the title reveals an interpretation of the period that is overstated, if not exactly backwards.  Mitchell’s claim is that this period was the dawn of something called “The Speculation Economy.”  He argues that ordinary people for the first time began to speculate by buying stock in corporations with which they had no connection or intimate knowledge.  These corporations were often the result of great mergers designed to produce marketable stock more than actual products.  This is certainly one sense of the word “speculate” and Mitchell adequately documents the term’s use by some contemporary commentators to describe the expansion of the stock market.  Nevertheless, in another sense this was the end of the speculation economy.  While individuals were surely primed to take more risks, the simple fact was that corporate stocks had become less speculative despite the fact that some of those companies focused more on Wall Street than Main Street.   The early corporate venture was akin to a voyage of the British East India Company.  If the venture was successful and the ship returned, everyone received huge returns on their investment.  More than likely, however, the venture did not pan out, either because of troubles on the seas or in the far-flung lands, in which case everything was lost.  The nineteenth-century corporation frequently operated under a similar model.  Dividend payout rates were extremely high and most corporations distributed all of their profits as dividends each year.  Conversely, there was no return on the investment or the investment was lost entirely in down years.  Moreover, in the absence of an actively traded stock market for non-railroad companies, the stock was effectively illiquid.   In the twentieth century, this corporate finance model began to change.  Dividend payout rates dropped substantially as companies recognized the value of retained earnings as a protection against panics and as a cheaper form of financing.  The concept of the “regular dividend” emerged as many corporations sought to attract stockholders seeking to hold shares for income rather than simply for speculation.  This regular dividend permitted more objective valuation by outsiders, especially in the absence of financial reporting, which in turn facilitated trading in the stock among dispersed investors on a public exchange.  In effect, corporate stock became more plausible as an investment for outsiders not simply because investor attitude had changed toward speculation, but also because the underlying corporation had changed into a more solid, albeit still risky, business investment.

One other oddity of the book is that it only devotes part of one chapter to the crucially important influence of World War I.  Mitchell concedes on p. 103 (citing Warshow) that the most dramatic expansion of the stockholder ownership base took place between 1917 and 1920.  This was no mere coincidence.  As Mitchell relates in some detail, the Liberty Bond drives introduced an entire new class of individuals to the advantages of investing.  An entire market of brokers developed to serve these new investors and as those bonds came due, those brokers convinced the individuals to put that money into the stock market.  Moreover, corporations plowed back their high earnings during the war into their businesses, which may have further stabilized corporate stock after an initially rocky transition to the post-war economy.  All of this probably deserves more attention in Mitchell’s story.

Part of the reason Mitchell may have decided to spend less time on World War I is that his focus is not on taxation, which is a significant omission.  This is true throughout the book and not just during the World War I discussion.  In his discussion of disclosure efforts, there is no mention of the 1909 corporate excise tax provision mandating corporate publicity for returns.  Although this was a flawed provision and was repealed within two years, Taft had trumpeted it as partial fulfillment of his pledge to continue Roosevelt’s pursuit of corporate reforms.  The absence of tax discussion is particularly glaring though during World War I.  A fundamental question lurking in Mitchell’s story (but largely unanswered) is why the wealthy blockholders sought to sell their stock and some of their control in the first place.  Tax played a huge role in this during the war.  Top marginal rates climbed from 7 percent in 1915 to 77 percent in 1918.  Wealthy investors sought relief.  Retained earnings avoided those high rates, but Congress responded by imposing excess profits taxes on corporations.  Middle class investors were not subject to the income tax or those high marginal rates.  Thus, they were willing buyers.  Tax-exempt Liberty Bonds provided a refuge for the wealthy and tax-free reorganizations (first permitted in 1918) provided a method of diversifying without realizing gain.  Of course, arguably this is all an entirely separate paper or book, but nevertheless it is hard to appreciate the significance of World War I, or indeed to fully understand the transition described in the book, without it. 

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We are pleased to announce the next installment of the Conglomerate Book Club ...

Last year we inaugurated the Conglomerate Book Club with a discussion of In the Shadow of Law, a novel by Kermit ("Kim") Roosevelt of the University of Pennsylvania School of Law. Since that debut, we have been searching for just the right opportunity to stage another session. We have found that opportunity in Larry Mitchell's new book, The Speculation Economy. Many of our readers will know Larry. who is the Theodore Rinehart Professor of Business Law at the George Washington University Law School, and is widely recognized for his work on issues of "progressive corporate law."

The Speculation Economy addresses this question: "When did the stock market become the driver of the American economy?" As you might infer from the question, we need to explore of bit of American business history to discover an answer, so we have enlisted Greg Mark and Steve Bank to comment on the book. Glommers Lisa Fairfax, Fred Tung, and I will also offer some brief thoughts.

All of this will happen on December 10. Each of the reviewers will write a brief review of the book, about the length of a typical blog post. And we will post those reviews on the blog. Larry will respond to the reviews, and then we will carry on the discussion in the comments. Please make some time in your schedule to read the book and join us for the discussion.

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Welcome to the inaugural edition of the Conglomerate Book Club. Today we are pleased to be discussing In the Shadow of Law, a novel by Kermit ("Kim") Roosevelt, Associate Professor at the University of Pennsylvania School of Law. Below the fold are four brief comments on the book and Kim's responses. (Beware of spoilers!) Please feel free to join the discussion.

Over the past couple of months, I have been tinkering with an application at Ning, and this seems like an appropriate moment to unveil the Conglomerate Bookshelf. People who hang around Conglomerate do a fair amount of reading, and this seemed like a nice way to build a repository of book recommendations from the community. Check it out and let me know what you think. If you would like to rate Kim's book, you can find it here. At the moment, only the Conglomerate bloggers are authorized to add books to the Bookshelf, but if people are interested in this idea, we'll consider expanding.

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Mark your calendars!

On August 16, we will inaugurate the Conglomerate Book Club with a discussion of In the Shadow of Law, a novel by Kermit ("Kim") Roosevelt. Kim is an Associate Professor at the University of Pennsylvania School of Law, where he specializes in constitutional law and conflict of laws. Prior to entering academe, Kim clerked with Associate Justice David Souter and worked as an associate at Mayer, Brown and Platt in Chicago. Kim will join us on August 16 for a discussion of his debut novel ... and perhaps some discussion of his next novel.

The Conglomerate Book Club will be an occasional feature on the blog, held whenever we find a book -- fiction or nonfiction -- that interests several of the bloggers and, we hope, our readers. In the Shadow of Law is such a book, focusing on the lawyers in Morgan Siler, a fictional Washington, D.C. law firm. Kim offers some nice background on the novel in this guest-blogging post over at Eric Muller's Is That Legal? (Though I have read Kim's novel, it didn't occur to me until I read his post that "you can more or less map the characters from In the Shadow of the Law onto the characters of Star Wars." But now that he mentions it ...)

Here's how the Conglomerate Book Club will work. Each of the reviewers -- including some of us here at Conglomerate and some guest reviewers -- will write a brief review of the book, about the length of a typical blog post. And we will post those reviews on the blog. Kim will respond to the reviews, and then we will carry on the discussion in the comments.

Any questions?

Ok, then go buy a copy of the book and read it before August 16! We look forward to hearing from you.

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