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Even a filthy habit deserves a fair hearing

Sophistication of method is used to torture data to reveal conclusions that do not obviously follow from them, but which fit either the researchers’ preconceptions or the sponsor’s policy objectives, or both.

Bookreview: Uncommon Sense

Bookreview: Uncommon Sense: economic insights, from marriage to terrorism by Gary Becker and Richard Posner

Chaotic evolution defines the market economy

Markets are not a well-oiled machine: they are a constantly changing, adaptive biological system.

‘Too big to fail’ is too dumb an idea to keep

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.

The Future of Markets

Markets are not a well oiled physical machine: they are a constantly changing, adaptive biological system. Pluralism is their motive force, their essence chaotic, their development inherently uncertain. If we could predict the evolution of markets, we would not need markets in the first place.

Evolution is the real hidden hand in business

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.

Do not discount what you cannot measure

Bogus quantification attempts to compress complex problems and analyses into single observations.

Undone, but still not understood

One lesson of recent events is that there seem to be no limits to the greed of the greedy. But perhaps the explanation is simply the one Madoff gave to the judge who sentenced him: “I made a mistake.”

George Eliot wrote the book on moral hazard

Do not waste any time on sermons and the prohibition. Even if the Good Lord himself were to deliver the Sermon on the Mount, He would be ignored. Hardened gamblers only give up when they have made the resolution to quit themselves.

First-class driving makes little economic sense

The benefit of road improvements is principally the reduced time and strain on private motorists, not the economic advantages to road transport operators: that lesson should influence the way we plan our road networks. Fast roads for light traffic are much cheaper to build than superhighways.