John Kay

By the time Stephen Byers could slip from one cabinet post to another without taking responsibility for any of the blunders that seemed to happen wherever he was in charge, ministerial accountability had been replaced by T.S. Eliot’s cat: “When a crime’s discovered, then Macavity’s not there.”

Crime often depends on a state of mind. An individual can be dishonest, or intend to kill. But to attribute these characteristics to a business, as distinct from the individuals in a business, is a metaphor too far.

Market economies are always vulnerable to chancers and spivs who sell overpriced goods to ill-informed customers and seem to promise things they do not intend to deliver.

Incentives and rewards are not the same thing, and people who complain that the spirit of Christmas is eroded by commercialisation are not simply priggish. The direct juxtaposition of the purely commercial exchange with the exchange based solely on mutual affection is offensive and unstable.

The interpretation of fairness is culturally specific but rarely does it correspond to measures of income inequality. Fairness is a perception, not a Gini coefficient.

At the medieval courts Shakespeare described, the exercise of power was not a means to an end, it was itself the end. The political and economic environment has been transformed. But human nature has not, and the factors that drive powerful men today are little different from those that drove them five centuries ago.

Today’s managers are victims of the tyranny of the quarterly earnings report. And that is why yesterday’s cost-savings are so often today’s corporate crisis.

Teachers and doctors strongly resist the introduction of a bonus culture: not just because they resent measurement of performance and accountability for their activities – although they do, and with little justification – but because they oppose importing the culture of assembly lines.

The political and regulatory incentives are either to downplay risks or exaggerate them – or to do each at different times.

In the unlikely event that the G20 leaders can spare a few moments between photo opportunities and ritual denunciation of greedy bankers, they might give urgent attention to the question of how to extricate themselves from the underwriting of failed banks.