John Kay

Your country of residence is where you buy your clothes, eat your meals, draw up your accounts and write your board minutes. But the volume and value of all these domestic operations depends on the role the country’s producers play in the global economy.

Socialist planning requires that those who would undertake it hold information that they do not have and to which they cannot realistically aspire. In an uncertain world, successful economic development – whether directed towards economic growth or environmental friendliness – is piecemeal, tentative and adaptive.

The market economy promotes diversification when the future is uncertain and there are differences of view. This is one of its fundamental strengths. But the market economy does not achieve enough diversification when the future is uncertain and there is commonality of view. This is one of its fundamental weaknesses.

We should eschew forecasts, acknowledge unresolvable uncertainty and plan accordingly. The right energy policy is one of diversification – developing as many uncorrelated options as possible.

Congestion charging can have a substantial effect on behaviour, but busy commercial centres tend to derive their advantages from the clustering of business activities, which cannot function without large-scale transport of people and goods.

Every business tells you that its economics is unique, and it’s rarely true. But for television in the twentieth century, it was true. But today this is no longer the case and like in any other market, people pay for what they want and show great diversity in what they do want.

Natural monopolies – industries in which it is difficult for more than one firm to survive – seem the easiest, most rewarding of business opportunities. It’s not as easy as you think.

Consumer goods markets are fickle and in a standards war, the best man does not necessarily, or often, win. Victory goes to the company that achieves a large installed base quickly.

The protracted battles to provide internet access or control the obsessions of players of computer games are the Thirty Years Wars of the business world, with advantage switching frequently among shifting alliances.

The battle for the London Stock Exchange has all the structure of a Jane Austen novel. Miss L.S.E., – a great name and the inheritor of a great tradition. It wouldn’t be the first time though that a suitor has to pay a high price for little more than a grand title. But such purchasers often do not regret their choice.