John Kay

Currency is a confidence trick: its value depends entirely on the belief that it has value.

Adam Smith had not imagined a world in which the Wealth of Nations would cross the world digitally at the click of a mouse. Nor had he envisaged one in which legislation would be drafted by paid lobbyists.

Our intuition is that a centrally planned allocation of resources will be more efficient than an uncoordinated one. In a market economy, that error constantly leads us to overestimate the economic advantages, and longevity, of large companies.

Modern titans derive their authority and influence from their position in a hierarchy, not their ownership of capital.

Good strategy begins with diagnosis. And diagnosis is analysis, not a description of symptoms. You don’t go to your doctor to be told you have a sore throat.

This year I wrote that if men think about sex on average every seven seconds, the average man last thought about sex three and a half seconds ago. But neither love nor equity markets are so predictable.

Thirty years before Havel, George Orwell identified the corrupting influence of discourse based on the repetition of pre-packaged phrases. A corrupting influence not just on language but on society itself.

Financial markets are an effective discipline on profligate individuals and states because markets cannot easily be bullied or lobbied, and their threat to make the cost of funds prohibitive is effective.

What would an economist do if he wanted to study horses? He would go to his study and think “what would I do if I were a horse?”

Good models are simplifications, not black boxes whose workings are incomprehensible even to their operators.