Portal:Business/Selected quote

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Selected quote 1

Portal:Business/Selected quote/1 "As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the

merchants
, and very few words need be employed in dissuading them from it."

—Adam Smith, The Wealth of Nations, 1776
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Selected quote 2

Portal:Business/Selected quote/2 "The process of substitution, of which we have been discussing the tendencies, is one form of competition; and it may be well to insist again that we do not assume that competition is perfect.

free competition
" had become almost a catchword, partly because they had not sufficiently classified and conditioned their doctrines, they often seemed to imply that they did assume this perfect knowledge."

—
Principles of Economics
, 1890
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Selected quote 3

Portal:Business/Selected quote/3 "...The problem which we face in dealing with actions which have harmful effects is not simply one of restraining those responsible for them. What has to be decided is whether the gain from preventing the harm is greater than the loss which would be suffered elsewhere as a result of stopping the action which produces the harm. In a world in which there are costs of rearranging the rights established by the legal system, the courts, in cases relating to

statutory enactments. Here we also find evidence of an appreciation of the reciprocal nature of the problem. While statutory enactments add to the list of nuisances, action is also taken to legalize what would otherwise be nuisances under the common law
. The kind of situation which economists are prone to consider as requiring Government action is, in fact, often the result of Government action. Such action is not necessarily unwise. But there is a real danger that extensive Government intervention in the economic system may lead to the protection of those responsible for harmful being carried too far."

—Ronald Coase, The Problem of Social Cost, 1960
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Selected quote 4

Portal:Business/Selected quote/4 "This paper presents a critique of

isolation effect
, leads to inconsistent preferences when the same choice is presented in different forms."

—Daniel Kahneman and Amos Tversky, Prospect theory: An Analysis of Decision under Risk, 1979
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Selected quote 5

Portal:Business/Selected quote/5 " Monopolistic competition is a challenge to the traditional viewpoint of economics that competition and monopoly are alternatives and that individual prices are to be explained in terms of either the one or the other. By contrast, it is held that most economic situations are composites of both competition and monopoly, and that, wherever this is the case, a false view is given by neglecting either one of the two forces and regarding the situation as made up entirely of the other. This seems to be a very simple idea. Indeed if one is not quite set in the way of thinking which involves mutual exclusiveness, it is grasped at once."

—Edward Chamberlin, Monopolistic or Imperfect Competition?, 1937
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Selected quote 6

Portal:Business/Selected quote/6 The differential rate system of piece-work consists briefly, in offering two different rates for the same job, a high price per piece in case the work is finished in the shortest possible time and in perfect condition, and a low price if it takes a longer time to do the job, of if there are any imperfections in the work. (The high rate should be such that the workman can earn more per day than is usually paid in similar establishments.) This is directly the opposite of the ordinary plan of piece-work in which the wages of the workmen are reduced when they increase their productivity.

—Frederick Winslow Taylor, Piece-Rate System, 1896
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Selected quote 7

Portal:Business/Selected quote/7 "I will build a

multitude. It will be large enough for the family, but small enough for the individual to run and care for. It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise. But it will be so low in price that no man making a good salary
will be unable to own one — and enjoy with his family the blessing of hours of pleasure in God's great open spaces."

—Henry Ford, My Life and Work Chapter IV, 1922
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Selected quote 8

Portal:Business/Selected quote/8 "To take an example, therefore, from a very trifling

machinery employed in it (to the invention of which the same division of labour has probably given occasion), could scarce, perhaps, with his utmost industry, make one pin in a day, and certainly could not make twenty. But in the way in which this business is now carried on, not only the whole work is a peculiar trade, but it is divided into a number of branches, of which the greater part are likewise peculiar trades. One man draws out the wire, another straights it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head; to make the head requires two or three distinct operations; to put it on, is a peculiar business, to whiten the pins is another; it is even a trade by itself to put them into the paper; and the important business of making a pin is, in this manner, divided into about eighteen distinct operations, which, in some manufactories, are all performed by distinct hands, though in others the same man will sometimes perform two or three of them. I have seen a small manufactory of this kind where ten men only were employed, and where some of them consequently performed two or three distinct operations. But though they were very poor, and therefore but indifferently accommodated with the necessary machinery, they could, when they exerted themselves, make among them about twelve pounds
of pins in a day. There are in a pound upwards of four thousand pins of a middling size. Those ten persons, therefore, could make among them upwards of forty-eight thousand pins in a day. Each person, therefore, making a tenth part of forty-eight thousand pins, might be considered as making four thousand eight hundred pins in a day. But if they had all wrought separately and independently, and without any of them having been educated to this peculiar business, they certainly could not each of them have made twenty, perhaps not one pin in a day; that is, certainly, not the two hundred and fortieth, perhaps not the four thousand eight hundredth part of what they are at present capable of performing, in consequence of a proper division and combination of their different operations."

—Adam Smith, The Wealth of Nations, 1776
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Selected quote 9

Portal:Business/Selected quote/9 "In

beggar chuses to depend chiefly upon the benevolence of his fellow-citizens. Even a beggar does not depend upon it entirely. The charity
of well-disposed people, indeed, supplies him with the whole fund of his subsistence. But though this principle ultimately provides him with all the necessaries of life which he has occasion for, it neither does nor can provide him with them as he has occasion for them. The greater part of his occasional wants are supplied in the same manner as those of other people, by treaty, by barter, and by purchase. With the money which one man gives him he purchases food. The old cloaths which another bestows upon him he exchanges for other old cloaths which suit him better, or for lodging, or for food, or for money, with which he can buy either food, cloaths, or lodging, as he has occasion."

—Adam Smith, The Wealth of Nations, 1776
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Selected quote 10

Portal:Business/Selected quote/10 "But when the

exchange, except the different productions of their respective trades, and the butcher is already provided with all the bread and beer which he has immediate occasion for. No exchange can, in this case, be made between them. He cannot be their merchant, nor they his customers; and they are all of them thus mutually less serviceable to one another. In order to avoid the inconveniency of such situations, every prudent man in every period of society, after the first establishment of the division of labour, must naturally have endeavoured to manage his affairs in such a manner, as to have at all times by him, besides the peculiar produce of his own industry, a certain quantity of some one commodity
or other, such as he imagined few people would be likely to refuse in exchange for the produce of their industry."

—Adam Smith, The Wealth of Nations, 1776
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Selected quote 11

Portal:Business/Selected quote/11 "In all countries, however, men seem at last to have been determined by irresistible reasons to give the preference, for this employment, to metals above every other commodity.

perishable than they are, but they can likewise, without any loss, be divided into any number of parts, as by fusion those parts can easily be reunited again; a quality which no other equally durable commodities possess, and which more than any other quality renders them fit to be the instruments of commerce and circulation. The man who wanted to buy salt, for example, and had nothing but cattle to give in exchange for it, must have been obliged to buy salt to the value of a whole ox, or a whole sheep, at a time. He could seldom buy less than this, because what he was to give for it could seldom be divided without loss; and if he had a mind to buy more, he must, for the same reasons, have been obliged to buy double or triple the quantity, the value, to wit, of two or three oxen, or of two or three sheep. If, on the contrary, instead of sheep or oxen, he had metals to give in exchange for it, he could easily proportion
the quantity of the metal to the precise quantity of the commodity which he had immediate occasion for."

—Adam Smith, The Wealth of Nations, 1776
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Selected quote 12

Portal:Business/Selected quote/12 "The real price of every thing, what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it. What every thing is really worth to the man who has acquired it, and who wants to dispose of it or exchange it for something else, is the toil and trouble which it can save to himself, and which it can impose upon other people. What is bought with money or with goods is purchased by labour, as much as what we acquire by the toil of our own body. That money or those goods indeed save us this toil. They contain the value of a certain quantity of labour which we exchange for what is supposed at the time to contain the value of an equal quantity. Labour was the first price, the original purchase-money that was paid for all things. It was not by gold or by silver, but by labour, that all the wealth of the world was originally purchased; and its value, to those who possess it, and who want to exchange it for some new productions, is precisely equal to the quantity of labour which it can enable them to purchase or command."

—Adam Smith, The Wealth of Nations, 1776
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Selected quote 13

Portal:Business/Selected quote/13 "What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom. If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry employed in a way in which we have some advantage. The general industry of the country, being always in proportion to the capital which employs it, will not thereby be diminished, no more than that of the above-mentioned artificers; but only left to find out the way in which it can be employed with the greatest advantage. It is certainly not employed to the greatest advantage when it is thus directed towards an object which it can buy cheaper than it can make. The value of its annual produce is certainly more or less diminished when it is thus turned away from producing commodities evidently of more value than the commodity which it is directed to produce. According to the supposition, that commodity could be purchased from foreign countries cheaper than it can be made at home. It could, therefore, have been purchased with a part only of the commodities, or, what is the same thing, with a part only of the price of the commodities, which the industry employed by an equal capital would have produced at home, had it been left to follow its natural course. The industry of the country, therefore, is thus turned away from a more to a less advantageous employment, and the exchangeable value of its annual produce, instead of being increased, according to the intention of the lawgiver, must necessarily be diminished by every such regulation."

—Adam Smith, The Wealth of Nations, 1776
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Selected quote 14

Portal:Business/Selected quote/14 "Nothing, however, can be more

regulations of commerce are founded. When two places trade with one another, this doctrine supposes that, if the balance be even, neither of them either loses or gains; but if it leans in any degree to one side, that one of them loses and the other gains in proportion to its declension from the exact equilibrium. Both suppositions are false. A trade which is forced by means of bounties and monopolies
may be and commonly is disadvantageous to the country in whose favour it is meant to be established, as I shall endeavour to show hereafter. But that trade which, without force or constraint, is naturally and regularly carried on between any two places is always advantageous, though not always equally so, to both."

—Adam Smith, The Wealth of Nations, 1776
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Selected quote 15

Portal:Business/Selected quote/15 "The ideas of

academic
scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas."

—John Maynard Keynes, The General Theory of Employment, Interest and Money, 1936
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Selected quote 16

Portal:Business/Selected quote/16 "In most

employer is not sure of the productive capabilities of an individual at the time he hires him. Nor will this information necessarily become available to the employer immediately after hiring. The job may take time to learn. Often specific training is required. And there may be a contract period within which no recontracting is allowed. The fact that it takes time to learn an individual's productive capabilities means that hiring is an investment decision. The fact that these capabilities are not known beforehand makes the decision one under uncertainty. To hire someone, then, is frequently to purchase a lottery. In what follows, I shall assume the employer pays the certain monetary equivalent of the lottery to the individual as wage. If he is risk-neutral the wage is taken to be the individual's marginal
contribution to the hiring organization."

—Michael Spence, Job Market Signaling, 1973
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Selected quote 17

Portal:Business/Selected quote/17 "Gresham's law has made a modified reappearance. For most cars traded will be the "lemon", and good cars may not be traded at all. The"bad" cars tend to drive out the good (in much the same way that bad money drives out the good). But the analogy with Gresham's law is not quite complete: bad cars drive out the good because they sell at the same price as good can; similarly, bad money drives out good because the exchange rate is even. But the bad cars sell at the same price as good cars since it is impossible for a buyer to tell the difference between a good and a bad car; only the seller knows. In Gresham's law, however, presumably both buyer and seller can tell the difference between good and bad money. So the analogy is instructive, but not complete."

—George Akerlof, The Market for Lemons, 1970
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Selected quote 18

Portal:Business/Selected quote/18 "At the same time,

subsidies
) that can make everyone better off. Moreover, the distortions that arise from imperfect information or incomplete markets often look analytically like externalities of the familiar technological sort, and viewing them in this way helps identify the welfare consequences of government interventions."

—
Externalities
in economies with imperfect information and incomplete markets, 1986
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Selected quote 19

Portal:Business/Selected quote/19 "However no

utopian voting and signalling schemes can be imagined. ("Scandinavian consensus," Kant's "categorical imperative," and other devices meaningful only under conditions of "symmetry," etc.) The failure of market catallactics in no way denies the following truth: given sufficient knowledge the optimal decisions can always be found by scanning over all the attainable states of the world and selecting the one which according to the postulated ethical welfare function
is best. The solution "exists"; the problem is how to "find" it."

—
Public Expenditure
, 1954
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Selected quote 20

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Selected quote 21

Portal:Business/Selected quote/21 "But what all the

tenants or retainers. All for ourselves and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind. As soon, therefore, as they could find a method of consuming the whole value of their rents themselves, they had no disposition to share them with any other persons. For a pair of diamond buckles, perhaps, or for something as frivolous and useless, they exchanged the maintenance, or what is the same thing, the price of the maintenance of a thousand men for a year, and with it the whole weight and authority
which it could give them. The buckles, however, were to be all their own, and no other human creature was to have any share of them; whereas in the more ancient method of expence they must have shared with at least a thousand people. With the judges that were to determine the preference this difference was perfectly decisive; and thus, for the gratification of the most childish, the meanest, and the most sordid of all vanities, they gradually bartered their whole power and authority."

—Adam Smith, The Wealth of Nations, 1776
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Selected quote 22

Portal:Business/Selected quote/22 "In the progress of the division of labour, the employment of the far greater part of those who live by labour, that is, of the great body of the people, comes to be confined to a few very simple operations, frequently to one or two. But the understandings of the greater part of men are necessarily formed by their ordinary employments. The man whose whole life is spent in performing a few simple operations, of which the effects are perhaps always the same, or very nearly the same, has no occasion to exert his understanding or to exercise his invention in finding out expedients for removing difficulties which never occur. He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become. The torpor of his mind renders him not only incapable of relishing or bearing a part in any rational conversation, but of conceiving any generous, noble, or tender sentiment, and consequently of forming any just judgment concerning many even of the ordinary duties of private life. Of the great and extensive interests of his country he is altogether incapable of judging, and unless very particular pains have been taken to render him otherwise, he is equally incapable of defending his country in war. The uniformity of his stationary life naturally corrupts the courage of his mind, and makes him regard with abhorrence the irregular, uncertain, and adventurous life of a soldier. It corrupts even the activity of his body, and renders him incapable of exerting his strength with vigour and perseverance in any other employment than that to which he has been bred. His dexterity at his own particular trade seems, in this manner, to be acquired at the expence of his intellectual, social, and martial virtues. But in every improved and civilized society this is the state into which the labouring poor, that is, the great body of the people, must necessarily fall, unless government takes some pains to prevent it."

—Adam Smith, The Wealth of Nations, 1776
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Selected quote 23

Portal:Business/Selected quote/23 "The ordinary expence of the greater part of modern

taxes, would soon be disgusted with the war; and they are unable from not well knowing what taxes would be sufficient to produce the revenue wanted. The facility of borrowing delivers them from the embarrassment which this fear and inability would otherwise occasion. By means of borrowing they are enabled, with a very moderate increase of taxes, to raise, from year to year, money sufficient for carrying on the war, and by the practice of perpetually funding they are enabled, with the smallest possible increase of taxes, to raise annually the largest possible sum of money. In great empires the people who live in the capital, and in the provinces remote from the scene of action, feel, many of them, scarce any inconveniency from the war; but enjoy, at their ease, the amusement of reading in the newspapers
the exploits of their own fleets and armies. To them this amusement compensates the small difference between the taxes which they pay on account of the war, and those which they had been accustomed to pay in time of peace. They are commonly dissatisfied with the return of peace, which puts an end to their amusement, and to a thousand visionary hopes of conquest and national glory from a longer continuance of the war."

—Adam Smith, The Wealth of Nations, 1776
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Selected quote 24

Portal:Business/Selected quote/24 "Thus,

exportation
, and would grow wine for herself. The money price of these commodities would be regulated accordingly; wine would fall here while cloth continued at its former price, and in Portugal no alteration would take place in the price of either commodity. Cloth would continue for some time to be exported from this country, because its price would continue to be higher in Portugal than here; but money instead of wine would be given in exchange for it, till the accumulation of money here, and its diminution abroad, should so operate on the relative value of cloth in the two countries, that it would cease to be profitable to export it. If the improvement in making wine were of a very important description, it might become profitable for the two countries to exchange employments; for England to make all the wine, and Portugal all the cloth consumed by them; but this could be effected only by a new distribution of the precious metals, which should raise the price of cloth in England, and lower it in Portugal. The relative price of wine would fall in England in consequence of the real advantage from the improvement of its manufacture; that is to say, its natural price would fall; the relative price of cloth would rise there from the accumulation of money."

—David Ricardo, On the Principles of Political Economy and Taxation, 1817
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Selected quote 25

Portal:Business/Selected quote/25 "The

virgin forest, for example) does not attain value for men if large quantities of labor or other economic goods were applied to its production. Whether a diamond was found accidentally or was obtained from a diamond pit with the employment of a thousand days of labor is completely irrelevant for its value. In general, no one in practical life asks for the history of the origin of a good in estimating its value, but considers solely the services that the good will render him and which he would have to forgo if he did not have it at his command. Goods on which much labor has been expended often have no value, while others, on which little or no labor was expended, have a very high value. Goods on which much labor was expended and others on which little or no labor was expended are often of equal value to economizing men. The quantities of labor or of other means of production
applied to its production cannot, therefore, be the determining factor in the value of a good. Comparison of the value of a good with the value of the means of production employed in its production does, of course, show whether and to what extent its production, an act of past human activity, was appropriate or economic. But the quantities of goods employed in the production of a good have neither a necessary nor a directly determining influence on its value."

—
Principles of Economics
, 1871
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Selected quote 26

Portal:Business/Selected quote/26 "If

poets and dreamers may look forward. But in the responsible conduct of affairs, it is worse than folly to ignore the imperfections which still cling to human nature
.

History in general, and especially the history of

religious enthusiasts makes material concerns to count for nothing in comparison with the higher faith
."

—
Principles of Economics
, 1890
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Selected quote 27

Portal:Business/Selected quote/27 "

wellbeing
.

Thus it is on the one side a study of

artistic spirit has been for a while predominant: but religious and economic influences have nowhere been displaced from the front rank even for a time; and they have nearly always been more important than all others put together. Religious motives are more intense than economic, but their direct action seldom extends over so large a part of life. For the business by which a person earns his livelihood
generally fills his thoughts during by far the greater part of those hours in which his mind is at its best; during them his character is being formed by the way in which he uses his faculties in his work, by the thoughts and the feelings which it suggests, and by his relations to his associates in work, his employers or his employees."

—
Principles of Economics
, 1890
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Selected quote 28

Portal:Business/Selected quote/28 "The laws of

emotions that grow up around it. By the fundamental impulses of our nature we all—high and low, learned and unlearned—are in our several degrees constantly striving to understand the courses of human action, and to shape them for our purposes, whether selfish or unselfish, whether noble or ignoble. And since we must form to ourselves some notions of the tendencies of human action, our choice is between forming those notions carelessly and forming them carefully. The harder the task, the greater the need for steady patient inquiry
; for turning to account the experience, that has been reaped by the more advanced physical sciences; and for framing as best we can well thought-out estimates, or provisional laws, of the tendencies of human action.

The term "law" means then nothing more than a general proposition or statement of tendencies, more or less certain, more or less definite. Many such statements are made in every science: but we do not, indeed we can not, give to all of them a formal character and name them as laws. We must select; and the selection is directed less by purely scientific considerations than by practical convenience. If there is any general statement which we want to bring to bear so often, that the trouble of quoting it at length, when needed, is greater than that of burdening the discussion with an additional formal statement and an additional technical name, then it receives a special name, otherwise not."

—
Principles of Economics
, 1890
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Selected quote 29

Portal:Business/Selected quote/29 "Man cannot create material things. In the mental and moral world indeed he may produce new ideas; but when he is said to produce material things, he really only produces utilities; or in other words, his efforts and sacrifices result in changing the form or arrangement of matter to adapt it better for the satisfaction of wants. All that he can do in the physical world is either to readjust matter so as to make it more useful, as when he makes a log of wood into a table; or to put it in the way of being made more useful by nature, as when he puts seed where the forces of nature will make it burst out into life.

It is sometimes said that

retail trade
."

—
Principles of Economics
, 1890
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Selected quote 30

Portal:Business/Selected quote/30 "Human

quantities of the things he has been accustomed to consume, but better qualities
of those things; he desires a greater choice of things, and things that will satisfy new wants growing up in him.

Thus though the brute and the savage alike have their preferences for choice morsels, neither of them cares much for variety for its own sake. As, however, man rises in civilization, as his mind becomes developed, and even his animal passions begin to associate themselves with mental activities, his wants become rapidly more subtle and more various; and in the minor details of life he begins to desire change for the sake of change, long before he has consciously escaped from the yoke of custom. The first great step in this direction comes with the art of making a fire: gradually he gets to accustom himself to many different kinds of food and drink cooked in many different ways; and before long monotony begins to become irksome to him, and he finds it a great hardship when accident compels him to live for a long time exclusively on one or two kinds of food."

—
Principles of Economics
, 1890
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Selected quote 31

Portal:Business/Selected quote/31 "

economic policies
of governments have resulted, have been due to the want of statistical measurement. A few people who have been strongly interested on one side have raised their voices loudly, persistently and all together; while little has been heard from the great mass of people whose interests have lain in the opposite direction; for, even if their attention has been fairly called to the matter, few have cared to exert themselves much for a cause in which no one of them has more than a small stake. The few therefore get their way, although if statistical measures of the interests involved were available, it might prove that the aggregate of the interests of the few was only a tenth or a hundredth part of the aggregate of the interests of the silent many."

—
Principles of Economics
, 1890
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Selected quote 32

Portal:Business/Selected quote/32 "People of the same trade seldom meet together, even for merriment and

conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law
which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.

A regulation which obliges all those of the same trade in a particular town to enter their names and places of abode in a public register, facilitates such assemblies. It connects individuals who might never otherwise be known to one another, and gives every man of the trade a direction where to find every other man of it.

A regulation which enables those of the same trade to tax themselves in order to provide for their poor, their sick, their widows and orphans, by giving them a common interest to manage, renders such assemblies necessary.

An

penalties, which will limit the competition
more effectually and more durably than any voluntary combination whatever."

—Adam Smith, The Wealth of Nations, 1776
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Selected quote 33

Portal:Business/Selected quote/33 "The world economy, like the economy of a single country, can be visualized as a system of

interdependent processes. Each process, be it the manufacture of steel, the education of youth or the running of a family household, generates certain outputs and absorbs a specific combination of inputs. Direct interdependence between two processes arises whenever the output of one becomes an input of the other: coal, the output of the coal mining industry, is an input of the electric power generating sector. The chemical industry uses coal not only directly as a raw material but also indirectly in the form of electrical power. A network of such links constitutes a system of elements which depend upon each other directly, indirectly or both. The state of a particular economic system can be conveniently described in the form of a two-way input-output table showing the flows of goods and services among its different sectors, and to and from processes or entities (“value added” and “final demand”) viewed as falling outside the conventional borders of an input-output system
. As the scope of the inquiry expands, new rows and columns are added to the table and some of the external inflows and outflows become internalized. Increasing the number of rows and columns that describe an economic system also permits a more detailed description of economic activities commonly described in highly aggregative terms."

—Wassily Leontief, Structure of the World Economy, 1973
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Selected quote 34

Portal:Business/Selected quote/34 "This essay has been devoted to an exposition and elaboration of a single

economic agents, and that optimal decision rules vary systematically with changes in the structure of series relevant to the decision maker, it follows that any change in policy
will systematically alter the structure of econometric models.

For the question of short-term

sample
period or in ex-ante short-term forecasting."

—
Robert Lucas, Econometric Policy Evaluation: A Critique
, 1976
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Selected quote 35

Portal:Business/Selected quote/35 "Buy what thou hast no need of; and e'er long thou shalt sell thy necessaries."

—Benjamin Franklin, Poor Richard's Almanack, 1732-1758
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Selected quote 36

Portal:Business/Selected quote/36 "Corporate managers have directed a great deal of attention to defining their

businesses as a crucial step in strategy formulation. Theodore Levitt, in his classic 1960 article in HBR, argued strongly for avoiding the myopia of narrow, product-oriented industry
definition. Numerous other authorities have also stressed the need to look beyond product to function in defining a business, beyond national boundaries to potential international competition, and beyond the ranks of one’s competitors today to those that may become competitors tomorrow. As a result of these urgings, the proper definition of a company’s industry or industries has become an endlessly debated subject.

One motive behind this debate is the desire to exploit new

suppliers for bargaining power
. Meanwhile, they also neglect to keep a wary eye out for new entrants to the contest or fail to recognize the subtle threat of substitute products."

—
Competitive Forces
Shape Strategy, 1979
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Selected quote 37

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Selected quote 38

Portal:Business/Selected quote/38 "Consider the nature of past wars. The twentieth century was not the deadliest (in percentage of the total population), but it brought something new: the beginning of the Extremistan warfare-a small probability of a conflict degenerating into total decimation of the human race, a conflict which nobody is safe anywhere.

A similar effect is taking place in economic life. I spoke about

lending
policies, to a more homogeneous framework of firms that all resemble one another. True, we now have fewer failures, but when they occur...I shiver at the thought. I rephrase here: we will have fewer but more severe crises. The rarer the event, the less we know about its odds. It means that we know less and less about the possibility of a crisis."

—
The Black Swan
, 2007
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Selected quote 39

Portal:Business/Selected quote/39 "Production Cloning

On the

tennis match between the first- and second-ranked players in the world than it does to broadcast a match between the 101st and 102nd. If the best performers' efforts can be cloned at low marginal cost
, there is less room in the market for lower-ranked talents.

More generally, whenever there are economies of scale in production or distribution, there is a natural tendency for one product, supplier, or service to dominate the market. The battle is to determine which one it will be.

Network Economies

On the demand side of many markets, a product becomes more valuable as greater numbers of consumers use it. A vivid illustration is VHS's defeat of the competing Beta format in home video recorders. VHS's defeat of the competing Beta format in home video recorders. VHS's attraction over the initial versions of Beta was that it permitted longer recording times. Thought Beta later corrected this deficiency and on most important technical dimensions came to be widely by experts as superior to VHS, the initial sales advantage of VHS proved insurmountable. Once the number of consumers owning VHS passed a critical threshold, the reasons for choosing it became compelling-variety and availability of tape rentals, access to repair facilities, the capability to exchange tapes with friends, and son on."

—Robert H. Frank, The Winner-Take-All Society, 1995
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Selected quote 40

Portal:Business/Selected quote/40 "One

economic fluctuations, such as the current recession-it was simply the efficient adjustment of the economy to shocks (such as changes in technology) coming from the outside. It was an approach that had strong policy
prescriptions-a minimal role for government.

Thought they based their analyses on the neoclassical (

information asymmetries, where one person knows something that someone else doesn't. Any information asymmetry would reflect intense schizophrenia, hardly consistent with their other assumptions of full rationality. Their models have nothing to say about the critical issues that are at play in the current crisis: so what if one gives the bankers an extra trillion dollars or two? In the model, the bankers and the workers are the same people. Key policy debates were simply assumed away. For instance, the representative agent model precludes any discussion of distribution
. In a sense, views of values (including the view that the distribution of income is not important) are embedded in the very formulation of their analyses."

—Joseph Stiglitz, Freefall, 2010
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Selected quote 41

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Selected quote 42

Portal:Business/Selected quote/42 "

Airbus 380. By 2008, Boeing had regained from Airbus its leading position in commercial aviation and the share price its earlier value. At Boeing, as at ICI, shareholder value
was most effectively created when sought obliquely.

That profit-seeking paradox, like the conundrum of

Jerry Porras undertook paired comparisons between outstanding ('visionary') companies and adequate, but less remarkable firms with similar operations. Merck and Pfizer was one such comparison. Collins and Porras compared oblique philosophy of George Merck-'We try never to forget that medicine is for the people. It is not for the profits
. The profits follow, and if we have remembered that, they have never failed to appear. The better we have remembered it, the larger they have been'-with the directness of John McKeen of Pfizer-'So far as humanly possible, we aim to get profit out of everything we do'."

—John Kay, Obliquity, 2010
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Selected quote 43

Portal:Business/Selected quote/43 Jesus Cleanses the Temple

"15 And they came to

robbers.” 18 And the chief priests and the scribes heard it and were seeking a way to destroy him, for they feared him, because all the crowd was astonished at his teaching
. 19 And when evening came they went out of the city."

—
Gospel According to Mark, 1st century CE
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Selected quote 44

Portal:Business/Selected quote/44 "There are rumors that the

bankruptcies in London have re-commenced with new force. There is no saying where this fire will end, perhaps in the conflagration of all their paper. If not now, it must erelong. With only twenty millions of coin, and three or four hundred millions of circulating paper, public and private, nothing is necessary but a general panic, produced either by failures, invasion, or any other cause, and the whole visionary fabric vanishes into air, and shows that paper is poverty, that it is only the ghost of money, and not money itself. One hundred years ago, they had twenty odd millions of coin. Since that they brought in from Holland by borrowing forty millions more, yet they have but twenty millions left, and they talk of being rich, and having the balance of trade
in favor."

—Thomas Jefferson, Letter to Colonel Carrington, 27 May 1788
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Selected quote 45

Portal:Business/Selected quote/45 "The hindrance that the monetary or

usurers
.

The wavelike movement affecting the economic system, the recurrence of periods of boom which are followed by periods of depression, is the unavoidable outcome of the attempts, repeated again and again, to lower the gross market rate of interest by means of credit expansion. There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

—
Ludwig Von Mises, Human Action
, 1949
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Selected quote 46

Portal:Business/Selected quote/46 "Instead, this 'loss out of nowhere' is hidden in the detail that

firms were to produce where marginal cost equals price, then they would be producing part of their output past the point at which marginal revenue equals marginal cost. They would therefore make a loss
on these additional units of output.

As I argued above, the demand curve for a single firm cannot be horizontal-it must slope downwards, because if it doesn't, then the market demand curve has to be horizontal. Therefore, marginal revenue will be less than price for the individual firm. However, by arguing that an infinitesimal segment of the market demand is effectively horizontal, economists have treated this loss as zero. Summing zero losses over all firms means zero losses in the aggregate. But this is not consistent with their vision of the output and price levels of the perfectly competitive industry.

The higher level of output must mean losses are incurred by the industry, relative to the profit-maximizing level chosen by monopoly. Losses at the market level must mean losses at the individual firm level- yet these are presumed to be zero by economic analysis, because it erroneously assumes that the perfectly competitive firm faces a horizontal demand curve."

—Steve Keen, Debunking Economics, 2011
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Selected quote 47

Portal:Business/Selected quote/47 "Since I entered

manufacture
, are afraid of somebody, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it.

They know that America is not a place of which it can be said, as it used to be, that a man may choose his own calling and pursue it just as far as his abilities enable him to pursue it; because to-day, if he enters certain fields, there are organizations which will use means against him that will prevent his building up a business which they do not want to have built up; organizations that will see to it that the ground is cut from under him and the markets shut against him. For if he begins to sell to certain retail dealers, to any retail dealers, the monopoly will refuse to sell to those dealers, and those dealers, afraid, will not buy the new man's wares.

And this is the country which has lifted to the admiration of the world its ideals of absolutely free opportunity, where no man is supposed to be under any limitation except the limitations of his character and of his mind; where there is supposed to be no distinction of

class, no distinction of blood, no distinction of social status
, but where men win or lose on their merits.

I lay it very close to my own conscience as a public man whether we can any longer stand at our doors and welcome all newcomers upon those terms. American

credit
are more and more difficult to obtain, unless you obtain them upon the terms of uniting your efforts with those who already control the industries of the country; and nobody can fail to observe that any man who tries to set himself up in competition with any process of manufacture which has been taken under the control of large combinations of capital will presently find himself either squeezed out or obliged to sell and allow himself to be absorbed"

—Woodrow Wilson, The New Freedom, 1913
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Selected quote 48

Portal:Business/Selected quote/48 "The

infant industries. They are not the products of the time, that old laborious time, when the great continent we live on was undeveloped, the young nation struggling to find itself and get upon its feet amidst older and more experienced competitors. They belong to a very recent and very sophisticated age, when men knew what they wanted and knew how to get it by the favor of the government
.

Did you ever look into the way a trust was made? It is very natural, in one sense, in the same sense in which human greed is natural. If I haven't efficiency enough to beat my rivals, then the thing I am inclined to do is to get together with my rivals and say: "Don't let's cut each other's throats; let's combine and determine prices for ourselves; determine the output, and thereby determine the prices: and dominate and control the market." That is very natural. That has been done ever since freebooting was established. That has been done ever since power was used to establish control. The reason that the masters of combination have sought to shut out competition is that the basis of control under competition is brains and efficiency. I admit that any large corporation built up by the legitimate processes of business, by economy, by efficiency, is natural; and I am not afraid of it, no matter how big it grows. It can stay big only by doing its work more thoroughly than anybody else. And there is a point of bigness,—as every business man in this country knows, though some of them will not admit it,—where you pass the limit of efficiency and get into the region of clumsiness and unwieldiness. You can make your combine so extensive that you can't digest it into a single system; you can get so many parts that you can't assemble them as you would an effective piece of machinery. The point of efficiency is overstepped in the natural process of development oftentimes, and it has been overstepped many times in the artificial and deliberate formation of trusts.

A trust is formed in this way: a few gentlemen "promote" it—that is to say, they get it up, being given enormous

securities of one kind or another. The argument of the promoters is, not that every one who comes into the combination can carry on his business more efficiently than he did before; the argument is: we will assign to you as your share in the pool twice, three times, four times, or five times what you could have sold your business for to an individual competitor who would have to run it on an economic and competitive basis. We can afford to buy it at such a figure because we are shutting out competition. We can afford to make the stock of the combination half a dozen times what it naturally would be and pay dividends on it, because there will be nobody to dispute the prices
we shall fix."

—Woodrow Wilson, The New Freedom, 1913
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Selected quote 49

Portal:Business/Selected quote/49 "Therefore, when a small group of men approach Congress in order to induce the committee concerned to concur in certain legislation, nobody knows the ramifications of the interests which those men represent; there seems no frank and open action of public opinion in public counsel, but every man is suspected of representing some other man and it is not known where his connections begin or end.

I am one of those who have been so fortunately circumstanced that I have had the opportunity to study the way in which these things come about in complete disconnection from them, and I do not suspect that any man has deliberately planned the system. I am not so uninstructed and misinformed as to suppose that there is a deliberate and malevolent combination somewhere to dominate the government of the United States. I merely say that, by certain processes, now well known, and perhaps natural in themselves, there has come about an extraordinary and very sinister concentration in the control of business in the country.

However it has come about, it is more important still that the control of

capitalists who wish to keep the economic development of the country under their own eye and guidance. The great monopoly in this country is the monopoly of big credits. So long as that exists, our old variety and freedom and individual energy of development are out of the question. A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men who, even if their action be honest and intended for the public interest, are necessarily concentrated upon the great undertakings in which their own money is involved and who necessarily, by very reason of their own limitations, chill and check and destroy genuine economic freedom
. This is the greatest question of all, and to this statesmen must address themselves with an earnest determination to serve the long future and the true liberties of men."

—Woodrow Wilson, The New Freedom, 1913
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Selected quote 50

Portal:Business/Selected quote/50 "It is maintained by some that the

mint to coin money and passed laws to regulate the value thereof. The money so coined, with its value so regulated, and such foreign coins as Congress may adopt are the only currency known to the Constitution. But if they have other power to regulate the currency, it was conferred to be exercised by themselves, and not to be transferred to a corporation. If the bank be established for that purpose, with a charter
unalterable without its consent, Congress have parted with their power for a term of years, during which the Constitution is a dead letter. It is neither necessary nor proper to transfer its legislative power to such a bank, and therefore unconstitutional.

By its silence, considered in connection with the decision of the

citizen
and every company of citizens in all of our States possessed the right until the State legislatures deemed it good policy to prohibit private banking by law. If the prohibitory State laws were now repealed, every citizen would again possess the right. The State banks are a qualified restoration of the right which has been taken away by the laws against banking, guarded by such provisions and limitations as in the opinion of the State legislatures the public interest requires. These corporations, unless there be an exemption in their charter, are, like private bankers and banking companies, subject to State taxation. The manner in which these taxes shall be laid depends wholly on legislative discretion. It may be upon the bank, upon the stock, upon the profits, or in any other mode which the sovereign power shall will."

—Andrew Jackson, VETO MESSAGE, 1832
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Selected quote 51

Portal:Business/Selected quote/51 "When I joined the conference, I was quite at sea as to what its outcome would be and frankly skeptical as to its prospects of success. During the first days sessions, Senator Aldrich was much inclined to discuss the possibilities of a full-fledged central bank on the European order-a model he seemed loath to abandon. But when the conference closed, after a week of earnest deliberation, the rough draft of what later became the Aldrich Bill had been agreed upon, and a plan had been outlined which provided for a "National Reserve Association", meaning a central reserve organization with an elastic note issue based on gold and commercial paper. This was not a central bank in the European sense. It was strictly a bankers' bank with branches under the control of separate directorates having superversion over the rediscount operations with member banks."

"In its main principles and in many important details the Aldrich Bill was closely akin to the plan proposed in the "United Reserve Bank of the United States," but there were quite a number of differences, with some of which I was in complete disagreement. For example, in regard to the question of control, I thought that somewhat large concessions should have been made to

reserve money when in the tills of member banks. The bill frankly followed the Republican
doctrine of "keeping the government out of business;" but, as a starter, it was encouraging beyond all expectation. Indeed, the highest hopes seemed warranted that a most satisfactory piece of legislation could eventually be developed from it.

The results of the conference were entirely

confidential
. Even the fact that there had been a meeting was not permitted to become public."

—
Paul M. Warburg
, The Federal Reserve System, 1930
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Selected quote 52

Portal:Business/Selected quote/52 "That is just what happened in 1893. Wall Street expected it and was ready with actual cash to buy in at nominal prices what the public was forced by the panic to sacrifice.

The

conspiracy. They stood with Wall Street in the campaign of 1896, and on March 14, 1900, Wall Street and its foreign bond-holding clients got their share of the plunder, the adoption by Congress
of the single gold standard.

Writer is not hereby attacking the gold standard or advocating its repeal. That law is an accomplished fact. Nor is he favoring free and unlimited coinage of silver at sixteen to one. He is a republican, and never believed free silver coinage to be the proper remedy. But he is trying plainly to state without political bias certain historic facts and seemingly fair deductions of great significance because such facts have a most important bearing tending to reveal the true character and methods of the national banking system and Wall Street and throw a flood of needed light upon the present attempt of these interests to still further increase their profits and power at the expense of the people."

—Alfred Owen Crozier, U.S. Money Vs. Corporation Currency, "Aldrich Plan.", 1930
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Selected quote 53

Portal:Business/Selected quote/53 "The proletariat will use its political supremacy to wrest, by degree, all capital from the bourgeoisie, to centralise all instruments of production in the hands of the State, i.e., of the proletariat organised as the ruling class; and to increase the total productive forces as rapidly as possible.

Of course, in the beginning, this cannot be effected except by means of

rights of property, and on the conditions of bourgeois production; by means of measures, therefore, which appear economically insufficient and untenable, but which, in the course of the movement, outstrip themselves, necessitate further inroads upon the old social order, and are unavoidable as a means of entirely revolutionising the mode of production
.

These measures will, of course, be different in different countries.

Nevertheless, in most advanced countries, the following will be pretty generally applicable.

1. Abolition of property in land and application of all rents of land to public purposes.

2. A heavy progressive or graduated income tax.

3. Abolition of all rights of inheritance.

4. Confiscation of the property of all

emigrants and rebels
.

5. Centralisation of

credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly
.

6. Centralisation of the means of communication and transport in the hands of the State.

7. Extension of

factories and instruments of production owned by the State; the bringing into cultivation of waste-lands, and the improvement of the soil generally in accordance with a common plan
.

8. Equal liability of all to work. Establishment of industrial armies, especially for agriculture.

9. Combination of agriculture with manufacturing industries; gradual abolition of all the distinction between town and country by a more equable distribution of the populace over the country.

10. Free education for all children in public schools. Abolition of children’s factory labour in its present form. Combination of education with industrial production, &c, &c. "

—
Manifesto of the Communist Party
, English edition of 1888
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Selected quote 54

Portal:Business/Selected quote/54 " OUR leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.

While the poor and

investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest
,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.

These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.

Last year my federal

payroll taxes
paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.

If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot."

—Warren Buffett, Stop Coddling the Super-Rich, 2011
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Selected quote 55

Portal:Business/Selected quote/55 "The type of fallacy involved in projecting loss experience from a universe of non-insured bonds onto a deceptively-similar universe in which many bonds are insured pops up in other areas of finance. “Back-tested” models of many kinds are susceptible to this sort of error. Nevertheless, they are frequently touted in financial markets as guides to future action. (If merely looking up past financial data would tell you what the future holds, the Forbes 400 would consist of librarians.)

Indeed, the stupefying

home prices rose only moderately and speculation in houses was negligible. They then made this experience a yardstick for evaluating future losses. They blissfully ignored the fact that house prices had recently skyrocketed, loan
practices had deteriorated and many buyers had opted for houses they couldn’t afford. In short, universe “past” and universe “current” had very different characteristics. But lenders, government and media largely failed to recognize this all-important fact.

Investors should be skeptical of history-based models. Constructed by a nerdy-sounding priesthood using esoteric terms such as beta, gamma, sigma and the like, these models tend to look impressive. Too often, though, investors forget to examine the assumptions behind the symbols. Our advice: Beware of geeks bearing formulas."

—
Berkshire Hathaway Inc.
, 2009
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Selected quote 56

Portal:Business/Selected quote/56 " My dear Bowley,

I have not been able to lay my hands on any notes as to Mathematico-economics that would be of any use to you: and I have very indistinct memories of what I used to think on the subject. I never read mathematics now: in fact I have forgotten even how to integrate a good many things.

But I know I had a growing feeling in the later years of my work at the subject that a good mathematical theorem dealing with economic hypotheses was very unlikely to be good economics: and I went more and more on the rules---(1) Use mathematics as a short-hand language, rather than as an engine of inquiry. (2) Keep to them till you have done. (3) Translate into English. (4) Then illustrate by examples that are important in real life. (5) Burn the mathematics. (6) If you can't succeed in 4, burn 3. This last I did often.

I believe in Newton's Principia Methods, because they carry so much of the ordinary mind with them. Mathematics used in a Fellowship thesis by a man who is not a mathematician by nature---and I have come across a good deal of that---seems to me an unmixed evil. And I think you should do all you can to prevent people from using Mathematics in cases in which the English language is as short as the Mathematical. ....

I find mathematicians almost invariably follow what I regard as

Arithmetic Mean
. I always have to spend some time in convincing them of the danger.

Your emptyhandedly,"

—Alfred Marshall, Letter to A. L. Bowley, 1906
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Selected quote 57

Portal:Business/Selected quote/57 "In early September we wrote about the (ir)relevance of oil to

U.S. is a Plutonomy - a concept that generated great interest from our clients. As global strategists, this got us thinking about how to buy stocks based on this plutonomy thesis, and the subsequent thesis that it will gather strength and amass breadth. In researching this idea on a global level and looking for stock ideas we also chanced upon some interesting big picture implications. This process manifested itself with our own provocative thesis: that the so called “global imbalances
” that worry so many of our equity clients who may subsequently put a lower multiple on equities due to these imbalances, is not as dangerous and hostile as one might think. Our economics team led by Lewis Alexander researches and writes about these issues regularly and they are the experts. But as we went about our business of finding stock ideas for our clients, we thought it important to highlight this provocative macro thesis that emerged, and if correct, could have major implications in terms of how equity investors assess the risk embedded in equity markets. Sometimes kicking the tires can tell you a lot about the car-business.

Well, here goes. Little of this note should tally with conventional thinking. Indeed, traditional thinking is likely to have issues with most of it. We will posit that: 1) the world is dividing into two blocs - the plutonomies, where economic growth is powered by and largely consumed by the wealthy few, and the rest. Plutonomies have occurred before in sixteenth century

immigrants and overseas conquests invigorating wealth creation, the rule of law, and patenting inventions
. Often these wealth waves involve great complexity, exploited best by the rich and educated of the time."

—Ajay Kapur, Niall Macleod, Narendra Singh, Plutonomy: Buying, Explaining Global Imbalances, 2005
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Selected quote 58

Portal:Business/Selected quote/58 " Until the latest of our world conflicts, the

plowshares could, with time and as required, make swords as well. But now we can no longer risk emergency improvisation of national defense; we have been compelled to create a permanent armaments industry of vast proportions. Added to this, three and a half million men and women are directly engaged in the defense establishment. We annually spend on military security more than the net income
of all United States corporations.

This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence -- economic, political, even spiritual -- is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

In the councils of government, we must guard against the acquisition of unwarranted

military industrial complex
. The potential for the disastrous rise of misplaced power exists and will persist.

We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together

Akin to, and largely responsible for the sweeping changes in our industrial-military posture, has been the technological revolution during recent decades.

In this revolution, research has become central; it also becomes more formalized, complex, and costly. A steadily increasing share is conducted for, by, or at the direction of, the

Federal government
."

—Dwight D. Eisenhower, Farewell Address, 1961
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Selected quote 59

Portal:Business/Selected quote/59 "A fully free

credit expansion, banks became loaned up to the limit of their gold reserves, interest rates rose sharply, new credit was cut off, and the economy went into a sharp, but short-lived recession
. (Compared with the depressions of 1920 and 1932, the pre-World War I business declines were mild indeed.) It was limited gold reserves that stopped the unbalanced expansions of business activity, before they could develop into the post-World War I type of disaster. The readjustment periods were short and the economies quickly reestablished a sound basis to resume expansion.

But the process of cure was misdiagnosed as the disease: if shortage of bank reserves was causing a business decline — argued economic interventionists — why not find a way of supplying increased reserves to the banks so they never need be short! If banks can continue to loan money indefinitely — it was claimed — there need never be any slumps in business. And so the

federal government. Technically, we remained on the gold standard; individuals were still free to own gold, and gold continued to be used as bank reserves. But now, in addition to gold, credit extended by the Federal Reserve banks ("paper reserves") could serve as legal tender
to pay depositors.

When business in the United States underwent a mild contraction in 1927, the Federal Reserve created more paper reserves in the hope of forestalling any possible bank reserve shortage. More disastrous, however, was the Federal Reserve's attempt to assist Great Britain who had been losing gold to us because the Bank of England refused to allow interest rates to rise when market forces dictated (it was politically unpalatable). The reasoning of the authorities involved was as follows: if the Federal Reserve pumped excessive paper reserves into American banks, interest rates in the United States would fall to a level comparable with those in Great Britain; this would act to stop Britain's gold loss and avoid the political embarrassment of having to raise interest rates. The "Fed" succeeded; it stopped the gold loss, but it nearly destroyed the economies of the world, in the process. The excess credit which the Fed pumped into the economy spilled over into the stock market, triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in braking the boom. But it was too late: by 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence. As a result, the American economy collapsed. Great Britain fared even worse, and rather than absorb the full consequences of her previous folly, she abandoned the gold standard completely in 1931, tearing asunder what remained of the fabric of confidence and inducing a world-wide series of bank failures. The world economies plunged into the Great Depression of the 1930's."

—Alan Greenspan, Gold and Economic Freedom, 1966
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Selected quote 60

Portal:Business/Selected quote/60 "With a logic reminiscent of a generation earlier, statists argued that the gold standard was largely to blame for the credit debacle which led to the

taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds
, to finance welfare expenditures on a large scale.

Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government's promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which — through a complex series of steps — the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold. The holder of a government bond or of a bank deposit created by paper reserves believes that he has a valid claim on a real asset. But the fact is that there are now more claims outstanding than real assets. The law of supply and demand is not to be conned. As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy's books are finally balanced, one finds that this loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion.

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves."

—Alan Greenspan, Gold and Economic Freedom, 1966
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Selected quote 61

Portal:Business/Selected quote/61 "In all of the fields where individual

selling
outlays are invited by the fact that the market of each seller is limited, whereas the very nature of a purely competitive market precludes a selling problem. The theory of pure competition, in explaining the adjustment of economic forces in such an industry, is a complete misfit.

Because most prices involve monopoly elements, it is monopolistic competition that most people think of in connection with the simple word "competition". In fact, it may almost be said that under pure competition the

sellers
do not really compete in the sense in which the word is currently used. One never hears of "competition" in connection with the great markets, and the phrases "price cutting", "underselling", "unfair competition", "meeting competition", "securing a market", etc., are unknown. No wonder the principles of such a market seem so unreal when applied to the "business" world where these terms have meaning. They are based on the supposition that each seller accepts the market price and can dispose of his entire supply without materially affecting it. Thus there is no problem of choosing a price policy, no problem of adapting the product more exactly to the buyers (real or fancied) wants. The theory of pure competition could hardly be expected to fit facts so far different from its assumptions. But there is no reason why a theory of value cannot be formulated which will fit them - a theory concerning itself specifically with goods which are not homogeneous. This is the purpose of the later chapters of this book. We turn first to the theory of pure competition."

—
Monopolistic Competition
, 1933
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Selected quote 62

Portal:Business/Selected quote/62 "Yet I must confess that if I had been consulted whether to establish a

Nobel Prize in economics
, I should have decidedly advised against it.

One reason was that I feared that such a prize, as I believe is true of the activities of some of the great scientific foundations, would tend to accentuate the swings of scientific fashion.

This apprehension the selection committee has brilliantly refuted by awarding the prize to one whose views are as unfashionable as mine are.

I do not yet feel equally reassured concerning my second cause of apprehension.

It is that the Nobel Prize confers on an individual an authority which in economics no man ought to possess.

This does not matter in the

natural sciences
. Here the influence exercised by an individual is chiefly an influence on his fellow experts; and they will soon cut him down to size if he exceeds his competence.

But the influence of the economist that mainly matters is an influence over laymen:

civil servants
and the public generally.

There is no reason why a man who has made a distinctive contribution to economic science should be omnicompetent on all problems of society - as the press tends to treat him till in the end he may himself be persuaded to believe"

—
Friedrich August von Hayek
, Banquet Speech, 1974
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Selected quote 63

Portal:Business/Selected quote/63 " I have already quoted in

Marx
's own words the passages relative to the subject. The line of argument divides itself clearly into three steps.

First step. Since in exchange two goods are made equal to one another, there must be a common element of similar quantity in the two, and in this common element must reside the principle of Exchange value.

Second step. This common element cannot be the Use value, for in the exchange of goods the use value is disregarded.

Third step. If the use value of commodities be disregarded there remains in them only one common property—that of being products of labour. Consequently, so runs the conclusion, Labour is the principle of value; or, as Marx says, the use value, or "good," only has a value because human labour is made objective in it, is materialised in it.

I have seldom read anything to equal this for bad reasoning and carelessness in drawing conclusions.

The first step may pass, but the second step can only be maintained by a

logical fallacy of the grossest kind. The use value cannot be the common element because it is "obviously disregarded in the exchange relations of commodities, for"—I quote literally—"within the exchange relations one use value counts for just as much as any other, if only it is to be had in the proper proportion
." What would Marx have said to the following argument?

In an

opera company there are three celebrated singers—a tenor, a bass, and a baritone—and these have each a salary
of £1000. The question is asked, What is the common circumstance on account of which their salaries are made equal? And I answer, In the question of salary one good voice counts for just as much as any other—a good tenor for as much as a good bass or a good baritone—provided only it is to be had in proper proportion; consequently in the question of salary the good voice is evidently disregarded, and the good voice cannot be the cause of the good salary.

The fallaciousness of this argument is clear. But it is just as clear that Marx's conclusion, from which this is exactly copied, is not a whit more correct. Both commit the same fallacy. They confuse the disregarding of a genus with the disregarding of the specific forms in which this genus manifests itself. In our illustration the circumstance which is of no account as regards the question of salary is evidently only the special form which the good voice assumes, whether tenor, bass, or baritone. It is by no means the good voice in general. And just so is it with the exchange relations of commodities. The special forms under which use value may appear, whether the use be for food, clothing, shelter, or any other thing, is of course disregarded; but the use value of the commodity in general is never disregarded. Marx might have seen that we do not absolutely disregard use value from the fact that there can be no exchange value where there is not a use value—a fact which Marx himself is repeatedly forced to admit."

—
Eugen Böhm von Bawerk
, Capital and Interest, 1884
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Selected quote 64

Portal:Business/Selected quote/64 The author is far from taking the view held by many manufacturers that

labor unions
are an almost unmitigated detriment to those who join them, as well as to employers and the general public.

The labor unions — particularly the

trades unions of England — have rendered a great service, not only to their members, but to the world, in shortening the hours of labor and in modifying the hardships and improving the conditions of wage
workers.

In the writer's judgment the system of treating with labor unions would seem to occupy a middle position among the various methods of adjusting the relations between employers and men.

When

employers
herd their men together in classes, pay all of each class the same wages, and offer none of them any inducements to work harder or do better than the average, the only remedy for the men lies in combination; and frequently the only possible answer to encroachments on the part of their employers is a strike.

This state of affairs is far from satisfactory to' either employers or men, and the writer believes the system of regulating the wages and conditions of employment of whole classes of men by conference and agreement between the leaders of unions and manufacturers to be vastly inferior, both in its moral effect on the men and on the material interests of both parties, to the plan of stimulating each workman's ambition by paying him according to his individual worth, and without limiting him to the rate of work or pay of the average of his class.

—Frederick Winslow Taylor, Shop Management, 1911
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Selected quote 65

Portal:Business/Selected quote/65 The attempt which extreme radicals all over the world are making to get control of both the political and business systems on the theory that they would make the industrial and business system serve the community, is a real danger so long as our present system does not accomplish that end; and this danger is real irrespective of the fact that they have as yet nowhere proved their case.

Is it possible to make our present system accomplish this end! If so, there is no excuse for such a change as they advocate, for the great industrial and business system on which our modem civilization depends is essentially sound at bottom, having grown up because of the service it rendered. Not until it realized the enormous power it had acquired through making itself indispensable to the community did it go astray by making the community serve it. It then ceased to render service democratically, but demanded autocratically that its will be done. It made tools and weapons of cities, states, and empires. Then came the great catastrophe.

In order to resume our advance toward the development of an unconquerable democratic civilization, we must purge our economic system of all

autocratic
practices of whatever kind, and return to the democratic principle of rendering service, which was the basis of its wonderful growth.

Unless within a short time we can accomplish this result, there is apparently nothing to prevent our following Europe into the economic confusion and welter which seem to threaten the very existence of its civilization.

—Henry Gantt, Organizing for Work, 1919
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Selected quote 66

Portal:Business/Selected quote/66 Again,

Presbyterian church
, etc. All these things influenced him.

—Mary Parker Follett, Creative experience, 1924
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Selected quote 67

Portal:Business/Selected quote/67 At this point in the inquiry relation had established itself between the "interview programme" and the results obtained in the experimental rooms. The source of those constraints, relief from which the relay assemblers had so freely expressed, had, at least in part, revealed itself. Human collaboration in work, in primitive and developed societies, has always depended for its perpetuation upon the evolution of a non-logical social code which regulates the relations between persons and their attitudes to one another. Insistence upon a merely economic logic of production-especially if the logic is frequently changed-interferes with the development of such a code and consequently give rise in the group to a sense of human defeat. This human defeat results in the formation of a social code at a lower level and in opposition to the economic logic. One of its symptoms is "restriction". In its devious road to this enlightenment, the research division had learned something of the personal exasperation caused by a continual experience of incomprehension and futility. It had also learned how serious a consequence such experience carries for industry and for the individual.

—Elton Mayo, The Human Problems of an Industrial Civilization, 1933
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Selected quote 68

Portal:Business/Selected quote/68

Heroism and the respect it commands is a form of compensation by society for those who take risks for others. And entrepreneurship
is a risky and heroic activity, necessary for growth or even the mere survival of the economy.

It is also necessarily collective on

expertise. Someone who did not find something is providing others with knowledge, the best knowledge, that of absence (what does not work)-yet he gets little or no credit for it. He is a central part of the process with incentives
going to others and, what is worse, gets no respect.

I am an ingrate toward the man whose overconfidence caused him to open a restaurant and fail, enjoying my nice meal while he is probably eating canned tuna.

In order to progress, modern society should be treating ruined entrepreneurs in the same way we honor dead

scientific researcher
, any more than there is a successful babbler, philosophaster, commentator, consultant, lobbyist, or business school professor who does not take personals risks. (Sorry.)

Psychologists label "

Fukushima reactor
. In the case of the former, what they call overconfidence is a good thing, not something to medicate.

—
Nassim Taleb, Antifragile
, 2012
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Selected quote 69

Portal:Business/Selected quote/69 "

scalar chain is interposed between manager and lower grades, orders and counterinformation, too, have to go through a series of intermediaries. Each employee, intentionally or unintentionally, puts something of himself into the transmission and execution of orders and of information received, too. He does not operate merely as a cog in a machine. What appropriate share of initiative may be left to intermediaries depends on the personal character of the manager, on his moral
worth, on the reliability of his subordinates, and also on the condition of the business. The degree of centralization must vary according to different cases. The objective to pursue is the optimum utilization of all faculties of the personnel."

—
Henry Fayol
, General and Industrial Management, 1949
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Selected quote 70

Portal:Business/Selected quote/70 "The trade of a

proprietors. But the greater part of those proprietors seldom pretend to understand anything of the business of the company, and when the spirit of faction happens not to prevail among them, give themselves no trouble about it, but receive contentedly such half-yearly or yearly dividend as the directors think proper to make to them. This total exemption from trouble and from risk, beyond a limited sum, encourages many people to become adventurers in joint stock companies, who would, upon no account, hazard their fortunes in any private copartnery. Such companies, therefore, commonly draw to themselves much greater stocks than any private copartnery can boast of. The trading stock of the South Sea Company, at one time, amounted to upwards of thirty-three millions eight hundred thousand pounds. The divided capital of the Bank of England
amounts, at present, to ten millions seven hundred and eighty thousand pounds. The directors of such companies, however, being the managers rather of other people's money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own. Like the stewards of a rich man, they are apt to consider attention to small matters as not for their master's honour, and very easily give themselves a dispensation from having it. Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company. It is upon this account that joint stock companies for foreign trade have seldom been able to maintain the competition against private adventurers. They have, accordingly, very seldom succeeded without an exclusive privilege, and frequently have not succeeded with one. Without an exclusive privilege they have commonly mismanaged the trade. With an exclusive privilege they have both mismanaged and confined it."

—Adam Smith, The Wealth of Nations, 1776
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Selected quote 71

Portal:Business/Selected quote/71 "Even apart from the

probabilities. Enterprise only pretends to itself to be mainly actuated by the statements in its own prospectus, however candid and sincere. Only a little more than an expedition to the South Pole, is it based on an exact calculation of benefits to come. Thus if the animal spirits are dimmed and the spontaneous optimism falters, leaving us to depend on nothing but a mathematical expectation, enterprise will fade and die; -- though fears of loss may have a basis no more reasonable than hopes of profit
had before.

It is safe to say that enterprise which depends on hopes stretching into the future benefits the community as a whole. But individual initiative will only be adequate when reasonable calculation is supplemented and supported by animal spirits, so that the thought of ultimate loss which often overtakes pioneers, as experience undoubtedly tells us and them, is put aside as a healthy man puts aside the expectation of death.

This means, unfortunately, not only that

depressions are exaggerated in degree, but that economic prosperity is excessively dependent on a political and social atmosphere which is congenial to the average business man. If the fear of a Labour Government or a New Deal depresses enterprise, this need not be the result either of a reasonable calculation or of a plot with political intent; -- it is the mere consequence of upsetting the delicate balance of spontaneous optimism. In estimating the prospects of investment, we must have regard, therefore, to the nerves and hysteria
and even the digestions and reactions to the weather of those upon whose spontaneous activity it largely depends."

—John Maynard Keynes, The General Theory of Employment, Interest and Money, 1936
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Selected quote 72

Portal:Business/Selected quote/72 "And out of the delusion that

progress
is going to fling him off."

—Henry Ford, My Life and Work Chapter II, 1922
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Selected quote 73

Portal:Business/Selected quote/73 "The money influence—the pressing to make a profit on an "investment"—and its consequent neglect of skimping of work and hence of service showed itself to me in many ways. It seemed to be at the bottom of most troubles. It was the cause of low wages—for without well-directed work high wages cannot be paid. And if the whole attention is not given to the work it cannot be well directed. Most men want to be free to work; under the system in use they could not be free to work. During my first experience I was not free—I could not give full play to my ideas. Everything had to be planned to make money; the last consideration was the work. And the most curious part of it all was the insistence that it was the money and not the work that counted. It did not seem to strike any one as illogical that money should be put ahead of work—even though everyone had to admit that the profit had to come from the work. The desire seemed to be to find a short cut to money and to pass over the obvious short cut—which is through the work."

—Henry Ford, My Life and Work Chapter II, 1922
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Selected quote 74

Portal:Business/Selected quote/74 "There used to be a lot of advice given to officials not to hide behind their titles. The very necessity for the advice showed a condition that needed more than advice to correct it. And the correction is just this—abolish the titles. A few may be legally necessary; a few may be useful in directing the public how to do business with the concern, but for the rest the best rule is simple: "Get rid of them."

As a matter of fact, the record of business in general just now is such as to detract very much from the value of titles. No one would boast of being

bankrupt bank. Business on the whole has not been so skillfully steered as to leave much margin for pride
in the steersmen. The men who bear titles now and are worth anything are forgetting their titles and are down in the foundation of business looking for the weak spots. They are back again in the places from which they rose—trying to reconstruct from the bottom up. And when a man is really at work, he needs no title. His work honours him.

All of our people come into the factory or the offices through the

Harvard and we do not even inquire from which place he has graduated. All that he needs is the desire to work. If he does not desire to work, it is very unlikely that he will apply for a position, for it is pretty well understood that a man in the Ford
plant works."

—Henry Ford, My Life and Work Chapter VI, 1922
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Selected quote 75

Portal:Business/Selected quote/75 "Repetitive labour—the doing of one thing over and over again and always in the same way—is a terrifying prospect to a certain kind of mind. It is terrifying to me. I could not possibly do the same thing day in and day out, but to other minds, perhaps I might say to the majority of minds, repetitive operations hold no terrors. In fact, to some types of mind thought is absolutely appalling. To them the ideal job is one where the creative instinct need not be expressed. The jobs where it is necessary to put in mind as well as muscle have very few takers—we always need men who like a job because it is difficult. The average worker, I am sorry to say, wants a job in which he does not have to put forth much physical exertion—above all, he wants a job in which he does not have to think. Those who have what might be called the creative type of mind and who thoroughly abhor monotony are apt to imagine that all other minds are similarly restless and therefore to extend quite unwanted sympathy to the labouring man who day in and day out performs almost exactly the same operation.

When you come right down to it, most jobs are repetitive. A business man has a routine that he follows with great exactness; the work of a bank president is nearly all routine; the work of under officers and clerks in a bank is purely routine. Indeed, for most purposes and most people, it is necessary to establish something in the way of a routine and to make most motions purely repetitive—otherwise the individual will not get enough done to be able to live off his own exertions. There is no reason why any one with a creative mind should be at a monotonous job, for everywhere the need for creative men is pressing. There will never be a dearth of places for skilled people, but we have to recognize that the will to be skilled is not general. And even if the will be present, then the courage to go through with the training is absent. One cannot become skilled by mere wishing.

There are far too many assumptions about what human nature ought to be and not enough research into what it is. Take the assumption that creative work can be undertaken only in the realm of vision. We speak of creative "artists" in music, painting, and the other arts. We seemingly limit the creative functions to productions that may be hung on gallery walls, or played in concert halls, or otherwise displayed where idle and fastidious people gather to admire each other's culture. But if a man wants a field for vital creative work, let him come where he is dealing with higher laws than those of sound, or line, or colour; let him come where he may deal with the laws of personality. We want artists in industrial relationship. We want masters in industrial method—both from the standpoint of the producer and the product. We want those who can mould the political, social, industrial, and moral mass into a sound and shapely whole. We have limited the creative faculty too much and have used it for too trivial ends. We want men who can create the working design for all that is right and good and desirable in our life. Good intentions plus well-thought-out working designs can be put into practice and can be made to succeed. It is possible to increase the well-being of the workingman—not by having him do less work, but by aiding him to do more. If the world will give its attention and interest and energy to the making of plans that will profit the other fellow as he is, then such plans can be established on a practical working basis. Such plans will endure—and they will be far the most profitable both in human and financial values. What this generation needs is a deep faith, a profound conviction in the practicability of righteousness, justice, and humanity in industry. If we cannot have these qualities, then we were better off without industry. Indeed, if we cannot get those qualities, the days of industry are numbered. But we can get them. We are getting them."

—Henry Ford, My Life and Work Chapter VII, 1922
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Selected quote 76

Portal:Business/Selected quote/76 "Who provides the

Liberty Bonds at $100.00 and sold them back at $84 or $86 to the bankers. These bankers collected $100 plus. It was a simple manipulation. The bankers control the security marts. It was easy for them to depress the price
of these bonds. Then all of us -- the people -- got frightened and sold the bonds at $84 or $86. The bankers bought them. Then these same bankers stimulated a boom and government bonds went to par -- and above. Then the bankers collected their profits.

But the soldier pays the biggest part of the bill.

If you don't believe this, visit the American cemeteries on the battlefields abroad. Or visit any of the veteran's hospitals in the United States. On a tour of the country, in the midst of which I am at the time of this writing, I have visited eighteen government hospitals for veterans. In them are a total of about 50,000 destroyed men -- men who were the pick of the nation eighteen years ago. The very able chief surgeon at the government hospital; at Milwaukee, where there are 3,800 of the living dead, told me that mortality among veterans is three times as great as among those who stayed at home.

Boys with a normal viewpoint were taken out of the fields and offices and factories and classrooms and put into the ranks. There they were remolded; they were made over; they were made to "about face"; to regard murder as the order of the day. They were put shoulder to shoulder and, through

mass psychology
, they were entirely changed. We used them for a couple of years and trained them to think nothing at all of killing or of being killed.

Then, suddenly, we discharged them and told them to make another "about face" ! This time they had to do their own readjustment, sans [without] mass psychology, sans officers' aid and advice and sans nation-wide

Liberty Loan
" speeches or parades. Many, too many, of these fine young boys are eventually destroyed, mentally, because they could not make that final "about face" alone."

—Smedley Butler, War Is a Racket, 1935
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Selected quote 77

Portal:Business/Selected quote/77 "In the United States, there is a union for each job function with many unions in each company. Lathe operators are allowed to operate only lathes. A drilling job must be taken to a drilling operator. And because the operators are single-skilled, a welding job required at the lathe section cannot be done there but must be taken to a welding operator. As a consequence, there are a large number of people and machines. For American industries to achieve cost reduction under such conditions, mass production is the only answer.

When large quantities are produced, the labor cost per car and depreciation burden are reduced. This requires high-performance, high-speed machines that are both large and expensive.

This type of production is a planned mass production system in which each process makes many parts and forwards them to the next process. This method naturally generates an abundance of waste. From the time it acquired this American system until 1973 oil crisis, Japan had the illusion that this system fit their needs."

—Taiichi Ohno, Toyota Production System, English edition of 1988
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Selected quote 78

Portal:Business/Selected quote/78 "WHEN CONFRONTED WITH a problem, have you ever stopped and asked why five times? It is difficult to do even though it sounds easy. For example, suppose a machine stopped functioning:

1.Why did the machine stop? There was an overload and the fuse blew.

2.Why was there an overload? The bearing was not sufficiently lubricated.

3.Why was it not lubricated sufficiently? The lubrication pump was not pumping sufficiently.

4.Why was it not pumping sufficiently? The shaft of the pump was worn and rattling.

5.Why was the shaft worn out? There was no

strainer
attached and metal scrap got in.

Repeating why five times, like this, can help uncover the root problem and correct it. If this procedure were not carried through, one might simply replace the fuse or the pump shaft. In that case, the problem would recur within a few months.

To tell the truth, the Toyota production system has been built on the practice and evolution of this

scientific approach
. By asking why five times and answering it each time, we can get to the real cause of the problem, which is often hidden behind more obvious symptoms."

—Taiichi Ohno, Toyota Production System, English edition of 1988
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Selected quote 79

Portal:Business/Selected quote/79 "

drilled
by one worker, but how many products were completed by the line as a whole.

Years ago, I used to tell production workers one of my favorite stories about a boat rowed by eight men, four on the left side and four on the right side. If they do not row correctly, the boat will zigzag erratically.

One

rower
might feel he is stronger than the next and row twice as hard. But this extra effort upsets the boat's progress and moves it off course. The best way to propel the boat faster is for everyone to distribute force equally, rowing evenly and at the same depth.

Today a volleyball team has six players; previously there were nine. If a nine-member team tried to play a six-member team using the same plays, players might be injured bumping into one another. They would probably lose also because having more players is not necessarily an advantage.

Teamwork combined with other factors can allow a smaller team to win. The same is true in a work environment."

—Taiichi Ohno, Toyota Production System, English edition of 1988
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Selected quote 80

Portal:Business/Selected quote/80 "Unfortunately, however,

Lord Rothschild. The old fables of mankind are, indeed, unfathomably wise; but we must not have them expurgated in the interests of Mr. Vanderbilt. We must not have King Midas represented as an example of success; he was a failure of an unusually painful kind. Also, he had the ears of an ass. Also (like most other prominent and wealthy persons) he endeavoured to conceal the fact. It was his barber (if I remember right) who had to be treated on a confidential footing with regard to this peculiarity; and his barber, instead of behaving like a go-ahead person of the Succeed-at-all-costs school and trying to blackmail King Midas, went away and whispered this splendid piece of society scandal to the reeds, who enjoyed it enormously. It is said that they also whispered it as the winds swayed them to and fro. I look reverently at the portrait of Lord Rothschild; I read reverently about the exploits of Mr. Vanderbilt. I know that I cannot turn everything I touch to gold; but then I also know that I have never tried, having a preference for other substances, such as grass, and good wine. I know that these people have certainly succeeded in something; that they have certainly overcome somebody; I know that they are kings in a sense that no men were ever kings before; that they create markets and bestride continents
. Yet it always seems to me that there is some small domestic fact that they are hiding, and I have sometimes thought I heard upon the wind the laughter and whisper of the reeds.

At least, let us hope that we shall all live to see these absurd books about Success covered with a proper derision and neglect. They do not teach people to be successful, but they do teach people to be

Lord Mayors
. This was fallacious, but it was manly, and had a minimum of moral truth. In our society, temperance will not help a poor man to enrich himself, but it may help him to respect himself. Good work will not make him a rich man, but good work may make him a good workman. The Industrious Apprentice rose by virtues few and narrow indeed, but still virtues. But what shall we say of the gospel preached to the new Industrious Apprentice; the Apprentice who rises not by his virtues, but avowedly by his vices?"

—G. K. Chesterton, All Things Considered, 1908
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Selected quote 81

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Selected quote 82

Portal:Business/Selected quote/82 "At Toyota, we began to think about how to install an autonomic nervous system in our own rapidly growing business organization. In our production plant, an autonomic nerve means making judgments autonomously at the lowest possible level; for example, when to stop production, what sequence to follow in making parts, or when overtime is necessary to produce the required amount.

These discussions can be made by factory

engineering departments that correspond to the brain in the human body
. The plant should be a place where such judgments can be made by workers autonomously.

In

just-in-time
penetrated broadly and deeply into the production field, and as adherence to the rules increased through the use of kanban. As I thought about the business organization and the autonomic nerves in the human body, the concept began to interconnect, overlap, and stir my imagination."

—Taiichi Ohno, Toyota Production System, English edition of 1988
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Selected quote 83

Portal:Business/Selected quote/83 "In a

Toyota production system
can be realized only when all the workers become tortoises.

High-performance machines were in demand for a long time before the term "high performance" was thoroughly examined. When we say high performance, we may mean high-precision

finishing
, low energy consumption, or even high-precision finishing, low energy consumption, or even trouble-free machines. Each can be correct. However, a frequent mistake is to regard high-productivity and high-speed machines as being the same.

If we can raise the speed without lowering the operable rate or shortening the life of the equipment, if a higher speed will not change the manpower requirements or produce more products than we can sell - then we can say high speed means high productivity.

continuity. Just remember the tortoise and the hare. Moreover, we cannot fail to notice that machines not designed for endurance at high speeds will have shortened lifespans
if we speed them up."

—Taiichi Ohno, Toyota Production System, English edition of 1988
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Selected quote 84

Portal:Business/Selected quote/84 "Sloan grabbed hold of this important modification in the marketplace and began to offer more and more different models. This "full-line" policy was General Motor's unique strategy to answer public demands. How did the automobile industry as a whole respond to this diversification?

In the transition from

standard parts had to be developed for use in different models. The Ford system
, however, was not modified to any great extent.

At about this time, pricing policies were actively studied and employed in response to the wide variations resulting from diversification in the marketplace. I think that in production, however, the unfinished Ford system changed little and became deeply rooted.

When building up the

Toyota production system
, I always kept in mind the Japanese market and its demands for many types of cars in small quantities - different from American demands for a few types in large quantities.

The Toyota production system helps production meet market demands. We now know that producing many types of cars in large quantities is economically desirable, even though the Toyota system was built on the premise of many types in small quantities for the Japanese environment. Thus, the system is proving its effectiveness in the mature Japanese market. At the same time, I think the Toyota production system can be applied in America where the market for many types in large quantities has existed since Sloan's time."

—Taiichi Ohno, Toyota Production System, English edition of 1988
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Selected quote 85

Portal:Business/Selected quote/85 "The public services to which the yeomanry were bound were not less arbitrary than the private ones. To make and maintain the high roads, a servitude which still subsists, I believe, every-where, though with different degrees of oppression in different countries, was not the only one. When the king's troops, when his household or his officers of any kind passed through any part of the country, the yeomanry were bound to provide them with horses, carriages, and provisions, at a price regulated by the purveyor. Great Britain is, I believe, the only monarchy in Europe where the oppression of purveyance has been entirely abolished. It still subsists in France and Germany.

The public taxes to which they were subject were as irregular and oppressive as the services. The ancient lords, though extremely unwilling to grant themselves any pecuniary aid to their

burgher
, and whoever rents the lands of another becomes subject to it. No gentleman, nor even any burgher who has stock, will submit to this degradation. This tax, therefore, not only hinders the stock which accumulates upon the land from being employed in its improvement, but drives away an other stock from it. The ancient tenths and fifteenths, so usual in England in former times, seem, so far as they affected the land, to have been taxes of the same nature with the taille."

—Adam Smith, The Wealth of Nations, 1776
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Selected quote 86

Portal:Business/Selected quote/86 "All

economic theory
; and has been precipitated by different writers into various hard and fast distinctions by which certain trades have been marked off as productive and certain others as unproductive."

—
Principles of Economics
, 1890
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Selected quote 87

Portal:Business/Selected quote/87 "That part of the thing which he is only just induced to

purchase may be called his marginal purchase, because he is on the margin of doubt whether it is worth his while to incur the outlay required to obtain it. And the utility of his marginal purchase may be called the marginal utility
of the thing to him. Or, if instead of buying it, he makes the thing himself, then its marginal utility is the utility of that part which he thinks it only just worth his while to make. And thus the law just given may be worded:

—The marginal utility of a thing to anyone diminishes with every increase in the amount of it he already has.

There is however an implicit condition in this law which should be made clear. It is that we do not suppose

drunkenness
alike grow on what they feed upon. For in such cases our observations range over some period of time; and the man is not the same at the beginning as at the end of it. If we take a man as he is, without allowing time for any change in his character, the marginal utility of a thing to him diminishes steadily with every increase in his supply of it."

—
Principles of Economics
, 1890
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Selected quote 88

Portal:Business/Selected quote/88 "What can the world, or any nation in it, hope for if no turning is found on this dread road?

The worst to be feared and the best to be expected can be simply stated.

The worst is

atomic war
.

The best would be this: a life of perpetual fear and tension; a burden of arms draining the wealth and the labor of all peoples; a wasting of strength that defies the American system or the Soviet system or any system to achieve true abundance and happiness for the peoples of this earth.

Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed.

This world in arms is not spending money alone.

It is spending the sweat of its

children
.

The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities.

It is two electric

power plants
, each serving a town of 60,000 population.

It is two fine, fully equipped hospitals.

It is some 50 miles of concrete highway.

We pay for a single fighter with a half million bushels of wheat.

We pay for a single destroyer with new homes that could have housed more than 8,000 people.

This, I repeat, is the best way of life to be found on the road the world has been taking.

This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron."

—
The Chance for Peace
, 1953
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Selected quote 89

Portal:Business/Selected quote/89 "Have you ever witnessed the anger of the good shopkeeper, James B., when his careless son happened to break a square of glass? If you have been present at such a scene, you will most assuredly bear witness to the fact, that every one of the spectators, were there even thirty of them, by common consent apparently, offered the unfortunate owner this invariable consolation—"It is an ill wind that blows nobody good. Everybody must live, and what would become of the glaziers if panes of glass were never broken?"

Now, this form of condolence contains an entire theory, which it will be well to show up in this simple case, seeing that it is precisely the same as that which, unhappily, regulates the greater part of our economical institutions.

Suppose it cost six francs to repair the damage, and you say that the accident brings six francs to the glazier's trade—that it encourages that trade to the amount of six francs—I grant it; I have not a word to say against it; you reason justly. The glazier comes, performs his task, receives his six francs, rubs his hands, and, in his heart, blesses the careless child. All this is that which is seen.

But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of

industry
in general will be the result of it, you will oblige me to call out, "Stop there! your theory is confined to that which is seen; it takes no account of that which is not seen."

It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way, which this accident has prevented."

—Frédéric Bastiat, That Which Is Seen and That Which Is Not Seen, 1850
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Selected quote 90

Portal:Business/Selected quote/90 The majority of these men beheve that the fundamental interests of

labor cost
— for his manufactures.

It is hoped that some at least of those who do not sympathize with each of these objects may be led to modify their views; that some employers, whose attitude toward their workmen has been that of trying to get the largest amount of work out of them for the smallest possible wages, may be led to see that a more liberal policy toward their men will pay them better; and that some of those workmen who begrudge a fair and even a large profit to their employers, and who feel that all of the fruits of their labor should belong to them, and that those for whom they work and the capital invested in the business are entitled to little or nothing, may be led to modify these views.

No one can be found who will deny that in the case of any single individual the greatest prosperity can exist only when that individual has reached his highest state of efficiency; that is, when he is turning out his largest daily output.

—Frederick Winslow Taylor, The principles of scientific management, 1911
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Selected quote 91

Portal:Business/Selected quote/91 It is the business of the

production engineer
to know every single item that constitutes his finished product, and every step involved in the handling of every piece. He must know what is the most advantageous manufacturing quantity of every single item so as to secure uniformity of flow as well as economy of manufacture. He must know how long each step ought to take under the best attainable working conditions. He must be able to tell at any time the exact condition as regards quantity and state of finishedness of every part involved in his manufacturing process.

The engineer must be able not only to design, but to execute. A

statistical, accounting
, and " system" methods to any particular production work he may undertake.

With regard to men, he must know how to stimulate ambition, how to exercise discipline with firmness, and at the same time with sufficient kindness to insure the good-will and cooperation of all. The more thoroughly he is versed in questions of

wage systems
, he must be able to discriminate in regard to which wage system is best applicable to certain classes of product.

—Hugo Diemer, Factory Organization and Administration, 1910
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Selected quote 92

Portal:Business/Selected quote/92 The

production costs
as low as possible.

Not many years ago, when cost reductions were necessary for one reason or another, they were obtained by reducing wages. The possibilities of obtaining cost reductions by increasing the production of the workers were not at the time generally recognized. Recently, however, there has been a marked change. The employer has come to realize that the

worker is also a consumer and that, if wages are reduced, purchasing power is reduced. Therefore, a better way toward cost reduction lies in waste
elimination so that greater production is secured with less effort.

Methods engineering is primarily concerned with devising methods that increase production and reduce costs. Hence, it plays an important role in determining the competitive position of a plant. As competition appears to be becoming keener, it is probable that methods engineering will become increasingly important.

Methods engineering in an industrial unit can never be considered as completed. Costs that are satisfactory and competitive today become excessive in a comparatively short time because of the improved developments of other units of the industry. If the producer who is in a good competitive position today decides that his costs have reached rock bottom and that no further attempt to improve them is necessary, within a short while he is likely to find himself facing loss of his commercial standing as owner of an efficiently managed plant. Only by constantly seeking to improve can any unit safeguard its competitive position. Conditions in industry are never static, and steady progress is the only sure way to success.

—Harold Bright Maynard, Operation Analysis, 1939
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Selected quote 93

Portal:Business/Selected quote/93 Again, if

workman, but with the management
. Managers rarely seem to suspect that, if the workmen were more intelligently directed, the output per man might be largely increased without a corresponding increase in expense.

Those who have given even superficial study to the subject are beginning to realize the enormous gain that can be made in the efficiency of workmen, if they are properly directed and provided with proper appliances. Few, however, have realized another fact of equal importance, namely, that to maintain permanently this increase of efficiency, the workman must be allowed a portion of the benefit derived from it.

To obtain this high degree of efficiency successfully, however, the same careful scientific analysis and investigation must be applied to every labor detail as the

employee
.

The great difficulty in instituting this method of dealing with labor questions is that usually neither employer nor employee has sufficient knowledge of the scientific method to realize either the amount of detail work necessary, or the extent of the benefits to bo derived from it. In general, their inclination is to adhere to the methods with which they are familiar, and to distrust all others, even though their methods have failed to bring them appreciably nearer the solution of their problems, and the newer methods have produced results far more satisfactory than they even hoped for. A scientific investigation into the details of a condition that has grown up unassisted by science has never yet failed to show that economies and improvements are feasible that benefit both parties to an extent unsuspected by either.

—Henry Gantt, Work, wages, and profits, 1913
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Selected quote 94

Portal:Business/Selected quote/94 "So it was

Dad the motion study man and general contractor, who decided to look into the new field of the psychology of management, and the old field of psychologically managing a houseful of children. They believed that what would work in the home would work in the factory
, and what would work in the factory would work in the home."

—
Frank Bunker Gilbreth, Jr. and Ernestine Gilbreth Carey, Cheaper by the Dozen
, 1948
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Selected quote 95

Portal:Business/Selected quote/95 It can readily be seen that such a

co-operation as would no other plan; and it should be stated here emphatically that there is nothing that can permanently bring about results from scientific management, and the economies that it is possible to effect by it, unless the organization
is supported by the hearty co-operation of the men. Without this there is no scientific management.

Moreover, since the conditions which bring about the cooperation are

standardized, the result is stable. Co-operation without standardization is a most unstable thing, likely to disappear at any moment with a change of the individuals
supposed to co-operate.

—
Frank Bunker Gilbreth, Sr.
, Units, Methods, and Devices of Measurement Under Scientific Management, 1913
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Selected quote 96

Portal:Business/Selected quote/96 "The

process chart
is a record of present conditions. It presents, in simple, easily understood, compact form, data which must be collected and examined before any improvement in existing conditions and methods is undertaken. Even if existing conditions are apparently satisfactory, the chart is useful as presenting much information in condensed form.

The process chart serves as an indicator of profitable changes. It assists in preventing "inventing downward," and stimulates invention that is cumulative and of permanent value. It is not only the first step in visualizing the one best way to do work, but is useful in every stage of deriving it.

This paper presents established working data used successfully in numerous installations for many years."

—
Lillian Gilbreth
, Process Charts, 1921
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Selected quote 97

Portal:Business/Selected quote/97 Every

judgment
will be assisted by a knowledge of the general solution.

The writer has seen the practical workings of a first-class stock system and does not wish to be understood as claiming that any mere mathematical formula should be depended upon entirely for determining the amount of stock that should be carried or put through on an order. This is a matter that calls, in each case, for a trained judgment, for which there is no substitute.

There are many other factors of even more importance than those given in this discussion. But in deciding on the best size of order, the man responsible should consider all the factors that are mentioned. While it is perfectly possible to estimate closely enough what effect these factors will have, the chances are many mistakes costing money will be made. Hence, using the formula as a check, is at least warranted. Given the theoretically correct result, it is easy to apply such correction factors as may be deemed necessary.

—Ford Whitman Harris, How many parts to make at once, 1913
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Selected quote 98

Portal:Business/Selected quote/98 "You may think, perhaps, that a little

clothes a little finer, and a little more entertainment now and then can be no great matter but remember what Poor Richard says "Many a little makes a mickle; beware of little expense for a small leak will sink a great ship
"."

—Benjamin Franklin, Poor Richard's Almanack, 1732-1758
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Selected quote 99

Portal:Business/Selected quote/99 "For a long time men failed to realize that the transition from the classical theory of value to the subjective theory of value was much more than the substitution of a more satisfactory theory of market exchange for a less satisfactory one. The classical economists met in the pursuit of their investigations an obstacle which they failed to remove, the apparent antinomy of value. Their general theory of choice and preference goes far beyond the horizon which encompassed the scope of economic problems as circumscribed by the economists from Cantillon, Hume and Adam Smith down to John Stuart Mill. It is much more merely a theory of the "economic side" of human endeavors and of man's striving for commodities and an improvement in his material well-being. It is the science of every kind of human action. Choosing determines all human decisions. In making his choice man chooses not only between various material things and services. All human values are offered for option. All ends and all means, both material and ideal issues, the sublime and the base, the noble and the ignoble, are ranged in a single row and subjected to a decision which picks out one thing and sets aside another. Nothing that men aim at or want to avoid remains outside of this arrangement into a unique scale of gradation and preference. The modern theory of value widens the scientific horizon and enlarges the field of economic studies. Out of the political economy of the classical school emerges the general theory of human action, praxeology. The economic or catallactic problems are embedded in a more general science, and can no longer be severed from this connection. No treatment of economic problems proper can avoid starting from acts of choice; economics becomes a part, although the hitherto best elaborated part, of a more universal science, praxeology."

—
Ludwig Von Mises, Human Action
, 1949
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Selected quote 100

Portal:Business/Selected quote/100 "We have no intention, however, of making a

totalitarian regime. A true "dictatorship of the proletariat," even if democratic in form, if it undertook centrally to direct the economic system
, would probably destroy personal freedom as completely as any autocracy has ever done.

The fashionable concentration on democracy as the main value threatened is not without danger. It is largely responsible for the misleading and unfounded belief that, so long as the ultimate source of power is the will of the majority, the power cannot be

arbitrary
. The false assurance which many people derive from this belief is an important cause of the general unawareness of the dangers which we face. There is no justification for the belief that, so long as power is conferred by democratic procedure, it cannot be arbitrary; the contrast suggested by this statement is altogether false: it is not the source but the limitation of power which prevents it from being arbitrary. Democratic control may prevent power from becoming arbitrary, but it does not do so by its mere existence. If democracy resolves on a task which necessarily involves the use of power which cannot be guided by fixed rules, it must become arbitrary power."

—Friedrich Hayek, The Road to Serfdom, 1944
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Selected quote 101

Portal:Business/Selected quote/101 "The greatest man of all on my horizon at this time was

telegraph
instrument and greeted me as "Scott's Andy". But I learned afterwards that he had heard of my train-running exploit. The battle of life is already half won by the young man who is brought personally in contact with high officials; and the great aim of every boy should be to do something beyond the sphere of his duties-something which attracts the attention of those over him."

—Andrew Carnegie, Autobiography of Andrew Carnegie, 1920
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Selected quote 102

Portal:Business/Selected quote/102 "Since the

end. The real end of the state thus appears to the bureaucracy as an end opposed to the state. The mind of the bureaucracy is the formal mind of the state. It therefore makes the formal mind of the state, or the real mindlessness of the state, a categorical imperative. The bureaucracy asserts itself to be the final end of the state. Because the bureaucracy makes its formal aims its content, it comes into conflict everywhere with the real aims. Hence it is obliged to present what is formal for the content and the content for what is formal. The aims of the state are transformed into aims of bureaus, or the aims of bureaus into the aims of the state. The bureaucracy is a circle from which no one can escape. Its hierarchy is a hierarchy of knowledge
. The highest point entrusts the understanding of particulars to the lower echelons, whereas these, on the other hand, credit the highest with an understanding in regard to the universal; and thus they deceive one another.

The bureaucracy is the imaginary state Alonso de the real state; it is the

Jesuitism
. While the bureaucracy is on one hand this crass materialism, it manifests its crass spiritualism in its will to do everything, i.e., in its making the will the causa prima, for it is pure active existence which receives its content from without; thus it can manifest its existence only through forming and restricting this content. The bureaucrat has the world as a mere object of his action."

—Karl Marx, Critique of Hegel's Philosophy of Right, 1843
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Selected quote 103

Portal:Business/Selected quote/103 "From a passage in the letter of the

credit
as any private draft, or bank note, or bill, and would give us the same facilities which we derive from the banks? I pray you to turn this subject in your mind, and to give it the benefit of your knowledge of details; whereas, I have only very general views of the subject. Affectionate salutations."

—Thomas Jefferson, Letter to Albert Gallatin, 13 December 1803
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Selected quote 104

Portal:Business/Selected quote/104 "When the Aldrich-Vreeland Emergency Currency Bill was sprung on the House in its finished draft and ready for action to be taken, the debate was limited to three hours and Banker Vreeland placed in charge. It took so long for copies of the bill to be gotten that many members were unable to secure I copy until within a few minutes of the time to vote. No member who wished to present the people's side of the case was given sufficient time to enable him to properly analyze the bill. I asked for time and was told that if would vote for the bill it would be given to me, but not otherwise. Others were treated in the same way.

Accordingly, on June 30th, 1908, the

Money Trust won the first fight and the Aldrich-Vreeland Emergency Law was placed on the statute books. Thus the first precedent was established for the people's guarantee of the rich man’s watered securities, by making them a basis on which to issue currency. It was the entering wedge. We had already guaranteed the rich men's money, and now, by this act, the way was opened, and it was intended that we should guarantee their watered stocks and bonds. Of course, they were too keen to attempt to complete, in a single act, such an enormous steal
as it world have been if they had included all they hoped ultimately to secure. They knew that they would be caught at it if they did, and so it was planned that the whole thing should be done by a succession of acts. The first three have taken place.

Act No. 1 was the manufacture, between 1896 and 1907, through stock gambling, speculation and other devious methods and devices, of tens of billions of watered stocks, bonds, and securities.

Act No. 2 was the panic of 1907, by which those not favorable to the Money Trust could be squeezed out of business and the people frightened, into demanding changes in the banking and currency laws which the Money Trust would frame.

Act No. 3 was the passage of the Aldrich-Vreeland Emergency Currency Bill, by which the Money Trust interests should have the privilege of securing from the

bank notes
which were issued for the banks on government bonds. These notes had hitherto had printed on them, “This note is secured by bonds of the United States.” He changed it to read as follows: “This note is secured by bonds of the United States or other securities.” “Or other securities” is the addition that was secured by the special interests. The infinite care the Money Trust exercises in regard to important detail work is easily seen in this piece of management. By that change it was enabled to have the form of the money issued in its favor on watered bonds and securities, the same as bank notes secured on government bonds, and, as a result the people do not know whether they get one or the other. None of the $500,000,000 printed and lying in the U. S. Treasury ready to float on watered bonds and securities has yet (April, 1913) been used. But it is there, maintained at a public charge, as a guarantee to the Money Trust that it may use it in case it crowds speculation beyond the point of its control. The banks may take it to prevent their own failures, but there is not even so much as a suggestion that it may be used to help keep the industries of the people in a state of prosperity"

—Charles August Lindbergh, Banking and Currency and the Money Trust, 1913
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Selected quote 105

Portal:Business/Selected quote/105 "I have not set forth any

traitors
and then presume through selfish influence to convert many of those who honestly started the movement. “Temptation thou art a mighty power in the hands of those who hold the seductive bait.” The interests base their hope of victory upon the temptation furnished, by that "bait" Their first hope was to win by ridiculing the progressives and taking patronage from those whom the people had elected, but this proved a failure."

—Charles August Lindbergh, Banking and Currency and the Money Trust, 1913
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Selected quote 106

Portal:Business/Selected quote/106 "

selfish viewpoint which prevails among the men who had a personal financial interest in the result of the Committee's investigation, such as the banker members of the Banking and Currency Committee
may be expected to have. Mr. Schiff, under oath, told the committee in substance that:

If individuals can accomplish a

laws of nature, he told the committee, are best for preventing too gigantic projects; and he cited the fall of the Tower of Babel as in example of the futility of human effort extended too far. Among the articles expounded by Schiff in his creed of business and finance
was the assertion that the minority in all corporations should not be allowed representation among the officers and directors by law. ‘The majority should always rule.’ he said, 'and the minority should protect their rights as best they can.’

Is it not easy to see by this statement of Mr. Schiff's that it is preposterous for

bankers, their agents and attorneys
on its Banking and Currency Committee? Mr. Schiff is not cut from a different cloth, nor by a different pattern than the rest of humanity. Acting in our individual capacity, we look after our own interests, but in a collective sense we have not carried this interest far enough, and, consequently, we have such financial wizards as Mr. Schiff."

—Charles August Lindbergh, Banking and Currency and the Money Trust, 1913
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Selected quote 107

Portal:Business/Selected quote/107 "It is not

Marconi; it was Lincoln, it was Rockefeller, Carnegie, J. J. Hill and Harriman with their ideas, it was Roosevelt with the Panama Canal, that have made the United States what it is. All these men used labor and capital to uncover and develop the hitherto unutilized resources of the universe
.

The Dutch and the Huguenots settled in South Africa about the same time North America above the gulf was colonized. The United States grew on account of ideas; South Africa remained undeveloped because of paucity of ideas, paucity of energy. The blacks had to do the work. There was no use for steam engines.

Muscular effort can be stimulated by the lash intelligent supervision, intellectual production, never! One single

men, animals, and engines for a century. The age of muscular human effort and of the lash is passing away, and the old morality with it; the age of supervision, of co-operative stimulus, is in full advance; and with it comes a new morality, under which the Golden Rule
can be extended from the relations between individuals to those between classes, nationalities, and races. The highest official cannot dictate to the youngest apprenticed worker. Both are creatures of the machine, but both in turn must serve it, for unless its every law and need is lived up to, it will refuse to work efficiently, often reuse to work at all. With these new duties and privileges of men toward each other old truths become fallacies and paradoxes become the basic truths of tomorrow.

To forward the new morality, to extend the dominion of man over uncarnate energy and its use, to substitute highly paid thinkers and supervisors for devitalized toilers, to help each individual, each corporation, each government to meet its part of the obligation, above all to inspire those executives on whose skill all progress and all wise performance depends, is the justification of these essays."

—Harrington Emerson, The twelve principles of efficiency, 1924
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Selected quote 108

Portal:Business/Selected quote/108 "Men who promoted these large

employer
, taking advantage of his necessity, gives him the smallest hourly rate he can be hired for, he naturally does only just enough work to hold his job.

Moreover, there has seldom been any attempt to keep a record of the work any man did in order that a more equitable compensation might be accorded him; and, whether he did much or little, he was accorded the hourly rate of

railroad companies, perhaps more than any other organizations, have offended in this manner, and the rates of wages, which they were willing to pay for different classes of workmen were not only fixed by employers, but maintained with all their power. A mechanic
, therefore, had but little chance of getting a higher compensation than his class rate, no matter how industrious or conscientious he might be.

The introduction of piece work, by which the workman was paid for the work he did, instead of the time he worked, promised better results; but, as piece prices were commonly set on a basis of what had been done by a man dissatisfied with his daily wage, it soon became clear that the men could do much more work than had been done, and earned correspondingly higher wages, with the result that the employer reduced the price per piece. This "cutting" of piece prices was common practice whenever the workman earned much more than his class rate; and the capable workman, recognizing the impossibility of increasing his compensation through more, or better work, soon ceased to make any effort in that direction, and devoted his spare time to the organization of a union with the object of advancing the class rate."

—Henry Gantt, Industrial Leadership, 1916
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Selected quote 109

Portal:Business/Selected quote/109 "Two fundamental questions that must be answered in controlling the

industry, and the military
.

We shall concentrate on showing how mathematical analysis can be used to help develop operating rules for controlling inventory systems. When mathematics is applied to the solution of inventory problems, it is necessary to describe mathematically the system to be studied. Such a description is often referred to as a mathematical model. The procedure is to construct a mathematical model of the system of interest and then to study the properties of the model. Because it is never possible to represent the real world with complete accuracy, certain approximations and simplifications must be made when constructing a mathematical model. There are many reasons on this. One is that it is essentially impossible to find out what the real world is like. Another is that a very accurate model the real world can become impossibly difficult to work with mathematically. A final reason is that accurate models often cannot be justified on economic grounds. Simple approximate ones will yield results which are good enough so that the additional improvement obtained from a better model is not sufficient to justify its additional cost."

—
Thomson McLintock Whitin
and George F. Hadley, Analysis Of Inventory Systems, 1963
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Selected quote 110

Portal:Business/Selected quote/110 "On the economic front we have been warned by major independent institutions — the

GDP in the UK could be more than 3 per cent lower as a result. It believes that the UK’s economic dynamism and productivity
will suffer and that the net effect on living standards will be strongly negative. It goes so far as to estimate that by 2030 UK GDP could be more than 5 per cent lower than if exit had not occurred."

—Jacob Rothschild, All the evidence shows that Brexit would be a disaster, The Times, 2016
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Selected quote 111

Portal:Business/Selected quote/111 "There is one sure mark of the coming

Capitalists trust the saving man. For every hundred dollars you can produce as the result of hard-won savings, Midas, in search of a partner, will lend or credit a thousand; for every thousand, fifty thousand. It is not capital that your seniors require, it is the man who has proved that he has the business habits which create capital, and to create it in the best of all possible ways, as far as self-discipline is concerned, is, by adjusting his habits to his means. Gentlemen, it is the first hundred dollars saved which tells. Begin at once to lay up something. The bee
predominates in the future millionnarie."

—Andrew Carnegie, The Empire of Business, 1908
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Our wants are various, and nobody has been found able to acquire even the necessaries without the aid of other people, and there is scarcely any Nation that has not stood in need of others. The Almighty himself has made our race such that we should help one another. Should this mutual aid be checked within or without the Nation, it is contrary to Nature.

—Anders Chydenius, The National Gain, 1765

When national debts have once been accumulated to a certain degree, there is scarce, I believe, a single instance of their having been fairly and completely paid. The liberation of the public revenue, if it has ever been brought about at all, has always been brought about by a bankruptcy; sometimes by an avowed one, but always by a real one, though frequently by a pretended payment. The raising of the denomination of the coin has been the most usual expedient by which a real public bankruptcy has been disguised under the appearance of a pretended payment.

—Adam Smith, The Wealth of Nations, 1776

Can such a system conceivably deal with the problems we are now having to face? The answer is self-evident: greed and envy demand continuous and limitless economic growth of a material kind, without proper regard for conservation, and this type of growth cannot possibly fit into a finite environment. We must therefore study the essential nature of the private enterprise system and the possibilities of evolving an alternative system which might fit the new situation.

—
Small is Beautiful, 1973

The social object of skilled investment should be to defeat the dark forces of time and ignorance which envelope our future.

—John Maynard Keynes, The General Theory of Employment, Interest and Money, 1936

The problems raised by a conscious direction of economic affairs on a national scale inevitably assume even greater dimensions when the same is attempted internationally. The conflict between planning and freedom cannot but become more serious as the similarity of standards and values among those submitted to a unitary plan diminishes.

—Friedrich Hayek, The Road to Serfdom, 1944

The most successful supporters of tyranny are without doubt those general declaimers who attribute the distresses of the poor, and almost all evils to which society is subject, to human institutions and the iniquity of governments.

—Thomas Robert Malthus, An Essay on the Principle of Population, 1798

The more opportunities there are in a Society for some persons to live upon the toil of others, and the less those others may enjoy the fruits of their work themselves, the more is diligence killed, the former become insolent, the latter despairing, and both negligent.

—Anders Chydenius, The National Gain, 1765

All varieties of interference with the market phenomena not only fail to achieve the ends aimed at by their authors and supporters, but bring about a state of affairs which - from the point of view of their authors' and advocates valuations - is less desirable than the previous state of affairs which they were designed to alter.

—Ludwig von Mises

It is almost a cliché to describe India as rich in institutional infrastructure and poor in physical infrastructure.

—
Paliniappan Chidambaram

If we stop thinking of the poor as victims, or as a burden, and start recognising them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity will open up.

—
C K Prahalad

The only function of economic forecasting is to make astrology look respectable.

—John Kenneth Galbraith

It has long been my view that there is no economic process or problem that cannot be put in clear language - can not be made accessible to the literate and interested reader. Such effect does not, however, justify error or oversimplification.

—John Kenneth Galbraith, "A Journey Through Economic Time".
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