John Kay

The SNP’s victory in the 5th May elections, which delivered an overall majority of 69 out of the 129 seats, means that the party can now fulfil its commitment to push for a referendum on independence. But independence, if achieved, would bring complications—both political and economic.

So does tentative adolescence give way to independent adulthood? The likely SNP victory does not alter the fact there is no majority in Scotland for independence and little chance of one.

The value of Modigliani-Miller – like any good model in physics or economics – lies as much in the questions it raises as in the truths it reveals.

The theory that the right answer to the gap in information and knowledge between the investment bank’s structured products division and the person in the street is to give the person in the street more information is absurd.

There is a loss of intimacy in knowledge and understanding, and a reduction in subtlety and flexibility of approach that comes from insistence on judicable principles and rigid rules. But the prevalence of regulatory capture is such that it is often a price well worth paying.

Good quangos have specific technical expertise and their purpose is to take issues out of politics. Bad quangos have no distinctive skills and are designed to put issues into politics.

The defining characteristic of civilisation is the complexity of its organisation. But complexity breeds complexity, and is subject to diminishing returns. Eventually the costs of increased complexity exceed the benefits.

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.

The Independent Commission on Banking headed by Sir John Vickers which the coalition Government has established will be told that such a separation between utility and casino can’t be done – although it was done in Britain for most of the 20th century.

We do need to increase the scope for structured and independent inquiry outside government, but with the kind of authority that only official status can confer.