John Kay is considered one of Britain’s leading economics. Specializing on the relationship between business and economics, Kay is not short of being in demand by many company directors and investment firms. With decades of experience and research, here is a look at some of the most notable John Kay quotes to document.
“Because behaviour is adaptive, not rational, we support social institutions that interfere with our freedom of choice. Odysseus had himself tied to the mast to resist siren voices.”
“Guide the people by law, subdue them by punishment; they may shun crime, but will be void of shame. Guide them by example, subdue them by courtesy; they will learn shame, and come to be good.”
“In war, resources lead to success: in business, success leads to resources. This is a fundamental difference between the processes of war and competition.”
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
“It worked badly for two main reasons. One was that the centre did not have sufficient local information to set the targets effectively. The other was that the targets could only imperfectly reflect the centre’s real objectives.”
“Lending to firms and individuals engaged in the production of goods and services – which most people would imagine was the principal business of a bank – amounts to about 3 per cent of that total.”
“Most decisions are wrong. Most experiments fail. It is tempting to believe that if we entrusted the future of our companies, our industries, our countries, to the right people, they would lead us unerringly to the promised land.”
“No one within the businesses themselves was willing to challenge Dick Fuld or Fred Goodwin—including the genuinely distinguished figures who sat on the RBS board.”
“Organisers of weight-guessing competitions and advisers helping people to refine their guesses.”
“People who applaud traders for providing liquidity to markets are often saying little more than that trading facilitates trading.”
“Stock markets are not a way of putting money into companies, but a means of taking it out.”
Great to join @FinanceYF talk by @JohnKayFT on the state of the financial market with @youngfabians pic.twitter.com/g99ZXMWhVn
— Kuba Stawiski (@kayes67) July 5, 2016
“The attempt to manage conflicts through regulation has failed because it has spawned complex rules without achieving its underlying objective.”
“The claim that the only constraints on our success are the limits of our imagination, although generally false, has lifted hearts for millennia. Grand visions take precedence over prosaic numbers.”
“The criteria that determine artistic success are ultimately determined by artists, not critics, and great art itself changes what these criteria are.”
“The disparities of income and wealth in the world today are an affront to any reflective person.”
“The effective application of principles of loyalty and prudence towards clients, and insistence that conflicts of interest be avoided, puts an end to the current business model of the investment bank, which relies on its multiplicity of activities to provide ‘the Edge’.”
“The financial conglomerates that dominate finance today are, to households and businesses in the real economy, largely indistinguishable from each other.”
“The use of capital markets by large companies today is mainly driven by tax and regulatory arbitrage, and undertaken by corporate treasurers with other people’s money.”
“The use of leverage can promote efficiency by enabling risk to be held and managed more efficiently. But the use of leverage provides opportunities for tailgaters and gamblers with other people’s money, and creates many opportunities to fall victim to the winner’s curse.”
“There is a role for carrots and sticks, but to rely on carrots and sticks alone is effective only when we employ donkeys and we are sure exactly what we want the donkeys to do.”
“We incline to see history through the lives of great men. That inclination blinds us to the real complexity.”
“What is it all for? What is the purpose of this activity? And why is it so profitable? Common sense suggests that if a closed circle of people continuously exchange bits of paper with each other, the total value of these bits of paper will not change much, if at all.”
“Whenever competitive mechanisms are not available, or not used, there are potential problems of incentive compatibility. The common response is to set targets, and reward or punish by reference to the targets.”
Here is a Ted Talk featuring John Kay, a Visiting Professor of Economics at the London School of Economics as he goes on to speak on the topic of obliguity.
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