John Kay

John reviews Joseph Stiglitz’s book on the financial crisis: Freefall: Free Markets and the Sinking of the Global Economy

Tailgaters think the view that their behaviour is dumb is based on a purely theoretical analysis, which is refuted by the tailgater’s practical experience. And so the culture of self-confident, self-congratulatory tailgaters perpetuates itself.

In the name of free markets, we created a monster that threatens to destroy the very free markets we extol.

Every era spawns financial follies. Every era spawns observations that, with hindsight, protagonists wish they had not made.

Processes matter to us as well as outcomes, and so we genuinely appreciate gifts even if we don’t really care for the item.

The most effective control is other parties’ diligence in assessing the businesses with which they deal.

When the next crisis hits, and it will, the frustrated public is likely to turn, not just on politicians who have been negligently lavish with public funds, or on bankers, but on the market system. What is at stake now may not just be the future of finance, but the future of capitalism.

Maintain a clear sense of long-term objectives but acknowledge the limits on your day-to-day actions.

Economics is not so much the queen of the social sciences but the servant, and needs to base itself on anthropology, psychology – and the sociology of ideologies.

Businesses are complex systems. We tend to infer design where there was only adaptation and improvisation, and to attribute successful business outcomes to the realisation of some deliberate plan.