The Truth About Markets Quotes

“The disparities of income and wealth in the world today are an affront to any reflective person.”
― John Kay, The Truth About Markets: Why Some Nations are Rich But Most Remain Poor

“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. Such hopes are always disappointed. Most of Thomas Edison’s inventions did not work, Ford, Morris and Mao ended their careers as sad, even risible figures. Bill Gates missed the significance of the Internet, Mrs Thatcher introduced the poll tax, and Napoleon died in exile on St Helena. Even extraordinarily talented people make big mistakes.”
― John Kay, The Truth About Markets: Why Some Nations are Rich But Most Remain Poor

“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. That is why there are subsidies to pensions and compulsory contributions; taxes on things we know we ought not to indulge in, like alcohol, tobacco and gambling; and subsidies to things we think we should engage in, like libraries, concerts and adult education. Social norms and legislation define the nature of adaptive behaviour in economic life; and we favour norms and legislation which change economic behaviour, including our own. Odysseus would not have been impressed by the argument that the behaviour he fears, being irrational, will not happen, and nor are we.”
― John Kay, The Truth About Markets: Why Some Nations are Rich But Most Remain Poor

“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. This is the system that worked so badly in the Soviet Union. 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.”
― John Kay, The Truth About Markets: Why Some Nations are Rich But Most Remain Poor