I’ve read Barbarians at the Gate before. Or I thought I had. I have an entry here, from five or six years ago, but when I started rereading the book, I barely remembered a thing. Thinking back, I might have skipped or skimmed at least some parts, which partly explains why the material seemed so new. Another reason is that Barbarians at the Gate is so teeming with side characters, sub plots and detours that it’s difficult to retain all of the information in one go. My Kindle version didn’t warn me that there are more than 500 dense pages in this opus. No wonder that Andrew Ross Sorkin, author of Too Big to Fail, aspires to write something as thorough.
Barbarians at the Gate is the story of RJR Nabisco, famed producer (at the time) of Oreo’s, Nutter Butters and Winston cigarettes. At the height of the wheeling dealing Wall Street 80’s, it tried to take itself private only to be bought by KKR, a private equity behemoth. Its CEO, Ross Johnson made a fool of himself by very publicly bumbling his way into a takeover battle, making very questionnable statements about his motives for doing so and then spectacularly failing to retain the company that he had personally put in play. The RJR Nabisco debacle came to symbolize different things for different people. For Wall Street, it was the apex of an explosion of new financial instruments, bigger and bigger acquisitions and increasing returns for bankers. For Main Street, it showed that greed had run amok and that bankers had lost touch with what actually created wealth in the country: the real economy.
Burrough and Helyar approach the topic as if it was a sequel to James Joyce’s Ulysses (disclaimer: I haven’t actually read Ulysses and don’t know anyone who has). Each individual negotiation, every meeting and every twist in the unlikely story is recounted in painstaking detail. I applaude their effort and tenacity, and appreciate their commitment to high quality journalism, but I can’t help feel out of breath every time I open my Kindle and see the cover. It’s so amazingly detailed that every time you think that the story is converging into its final act, a new player appears on the scene and the story resets. The most obvious example is First Boston’s desperate last-minute bid. The First Boston detour did happen in real life, so some may argue it should be included in the book too, but here it dissipates any sense of momentum.
It’s easy to fault Barbarians at the Gate for being so exhaustive. However, that may be a distraction from its true value. It’s a portrait of a time more than almost any book on finance. Most non-fiction finance sagas (Liar’s Poker, The Smartest Guys in the Room and the like) adjust and omit - as good books do - to a degree that those who disagree with their world view can relatively easily dismiss them. Its love of the finer points of finance make it almost unassailable.