Why Freakonomics is Such Fun

A Freakonomics podcast about family-owned businesses reports that passing on control of the business to the next generation–what Freakonomics calls “Scionology”–generally diminishes value.  It makes sense that passing control into a talent pool of limited size, whose members are determined by what Warren Buffet calls the “ovarian lottery,” would tend to yield less favorable results than merit-based succession to a larger and more diverse pool.  This is true in all developed countries–except Japan. Why? Because “Japanese families often adopt an adult to take over.”  98%–98%!!!!–of Japanese adoptees are males between the ages of 25 and 30.  Only 2% of Japanese adoptees are children.

Apology Without Responsibility

LONDON—News Corp. founder Rupert Murdoch forcefully apologized to victims of phone hacking by his employees but declared he was not to blame—deflecting the responsibility for the fiasco to other managers, saying “they behaved dreadfully” and “it’s for them to pay.”

Murdochs Are Grilled, The Wall Street Journal, 19 Jul 11

Rupert Murdoch earned some $22.7 million last year as chairman of News Corp.  His News Corp. stock is worth billions of dollars.  What does that compensate him for, if not control and responsibility?  How much more do those cost?

“Do you accept that ultimately you are responsible for this whole fiasco,” lawmaker Jim Sheridan asked.

“No,” Murdoch answered.

“You’re not responsible? Who is responsible?” Sheridan said, according to a Roll Call transcript.

“The people that I trusted to run [the tabloid], and then maybe the people that they trusted.”

When Murdoch was asked if he was guilty of “willful blindness” or ignoring “knowledge that you could have had and should have had,” he said: “We were not ever guilty of that.”

Murdoch’s Refusal to Take Responsibility May Undermine Credibility as CEO, Bloomberg, 20 Jul 11


As I write stories about Murdoch’s testimony before Parliament appear on the home pages of the Wall Street Journal, The New York Times, The Washington Post, The Boston Globe, The Hartford Courant . . . but not on News Corp.’s FoxNews.com.