Tag: General

The mistake both authors and publishers of business books make is to confuse a book about “what I did” with a book about “how to do it”.

Active financial systems don’t build more schools and factories, shops and offices. They are associated with higher shares of consumption and lower shares of investment in national income.

What mattered to Richard Rorty was not the search for what is true, but the search for what works. And that is what economists can learn from him. The test of a model, a way of thinking, or a theory, is not truth, but usefulness.

Environmentalism offers an alternative account of the natural world to the religious and an alternative anti-capitalist account of the political world to the Marxist. The rise of environmentalism parallels in time and place the decline of religion and of socialism.

Every business tells you that its economics is unique, and it’s rarely true. But for television in the twentieth century, it was true. But today this is no longer the case and like in any other market, people pay for what they want and show great diversity in what they do want.

Every model of an imperfectly known environment must contemplate two kinds of risk: that incorporated within the model and the risk of failure of the model itself.

It will rarely, if ever, be the case in economics that an old account of the economic world will be shown to be simply wrong, like the mediaeval account of planetary motion, or the phlogiston theory of heat.

Probability theory works well for a limited class of problems, but the real world is much more open-ended and there is usually fundamental uncertainty about both the nature of the outcomes and the process that gives rise to them.

The value of counterfactual history lies not in the questions it raises about the past, but the questions it raises about the present and future, and in the reminder that there is nothing inevitable about the world we observe.

Just as in football, business success is not simply a matter of acquiring the best people, or the best technology, or the best resources. It is the team that wins and in this year’s World Cup it was the Italian team being more than the sum of its parts.