John Kay

Consistency is the defining principle of rational choice theory. John looks instead to Ralph Waldo Emerson ‘a foolish consistency is the hobgoblin of little minds’.

What is important in billiards is the result, not the play: and what matters in business and finance is the outcome, not the process. In business and finance, as in billiards, the imperfections are critical and you can anticipate the result, or understand the outcome, only by appreciating these imperfections.

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.

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.

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.

Faced with the choice of over a hundred 100 jams, I reduced the number of alternatives to 30 or so, and then … well, I finally walked out of the shop without having bought any jam at all. People are overwhelmed by variety of choice.

Government spin is especially debilitating because government is a monopoly supplier of much of the information that an informed democracy requires.

There is no simple answer to the question: “How should capital gains be taxed?” So there are as many different regimes as there are national tax systems and they are often, as in Britain, in a state of seemingly endless flux.