Quotes
These are quotes that we like and have had the time to mention. Most of them appear elsewhere on the site.
Our General Philosophy: We particularly like this 750-year-old quote and we try to live by it. As we understand it, it seems to come from the first chapter of the Gospel of St. John.
“The final happiness of man consists in the contemplation of truth…. This is sought for its own sake, and is directed to no other end beyond itself.”
— Saint Thomas Aquinas, Summa Contra Gentiles
Our Business Decision Philosophy: in certain circles, we’re often labeled a “quant,” but cringe at that description. We think it is a perjorative for someone who can calculate but is clueless and impractical. We like this quote from Albert Einstein because it wraps measurement within a framework of common sense.
Unfortunately, not everyone shares our perspective; so we see a multitude of silly calculations, particularly in finance.
“Not everything that counts can be counted, and not everything that can be counted counts.”
— Albert Einstein
Our Working Assumption for Managerial Control & Incentive Issues, particularly within firms, but not limited to only for-profit organizations: From the first man, Adam, to the last baby born this morning, who is crying for warmth, food or his or her mother, we want what we want and should consider that others aren’t that different than us.
“Little is gained from becoming indignant about self-seeking behavior by managers. It is only human for managers to have their own goals and ambitions… A more productive response is to take as given the manager’s aims, and ask how to design institutions that work as well as possible…”
— John McMillan, Games, Strategies, & Managers, 1992.
Our Model-building & Model Validation Philosophy: We like this quote, too, from a famous statistician. It has been reiterated by folks in quantitative finance like Igor Hlivka. It is good to know that that are sensible people out there.
“…All models are wrong, but some are useful.”
— George Box, 1979
Models are abstractions or simplified views of reality. They are useful when they help us better understand some aspect of our world. Their use is potentially dangerous when we ignore the portion of reality that was discarded in the simplification process (and, especially, if we view reality to be just another version of the model).
Just about every number in accounting and finance is based on either a model or a series of assumptions — whether explicit or implied. That is why judgment and thoughtfulness and common sense are more important than math skills, and it is why when we offer advice our guiding principle is “no unintended consequences.”
On the Issue of Economic Liberty versus the Common Good: here is a nice metaphor, not sure if it helps to solve the problem, though
“Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done.”
— John Maynard Keynes
A Keen Observation that We Like about Evil and the Lack of Self-worth: During a few unpleasant times in our young life, we’ve had the unfortunate experience of dealing with individuals like those described below. They remind us of nothing more than the orcs and goblins in The Lord of the Rings when they try to make everyone as miserable as they, themselves, are. The quote below is used to describe St. Paul before his moment on the road to Damascus. Against present-day Sauls, we advise prayer (for them) and stalwartness (against them), but most importantly, a joyful outlook on life. It drives them absolutely crazy. Several of our essays, including Trustworthy? No. Predictable? Yes. and Common Managerial Mistakes in Decentralized Organizations, deal, at least partially, with similar types of folks.
“When a man feels the burden of guilt on his soul, he tries hard to justify himself before his own conscience and before others by increasing his false zeal, and thus he sinks yet deeper into evil.”
— Father Joseph Holzner, author of Paul of Tarsus, 1945, via Magnificat.com.
A Most Poetic Illustration of Opportunity Cost: Okay, so it is not really a quote, but it is our page; so, we can do what we want and include a poem. Regardless, is there a better definition of “opportunity cost” than the poem’s title, A Road Not Taken? Plus, the first stanza reminds us of Buridan’s Ass, and the last two speak of commitment, which is a familiar notion in these pages.
A Road Not Taken
“TWO roads diverged in a yellow wood, And sorry I could not travel both And be one traveler, long I stood And looked down one as far as I could To where it bent in the undergrowth;— Robert Frost, Mountain Interval, 1916.
Perspective and the Ability to Distinguish between (Measurable) Risk and Uncertainty: you (and we) are but a puff of smoke.
Come now, you who say, “Today or tomorrow we shall go into such and such a town, spend a year there doing business, and make a profit”— you have no idea what your life will be like tomorrow. You are a puff of smoke that appears briefly and then disappears. Instead you should say, “If the Lord wills it, we shall live to do this or that.” But now you are boasting in your arrogance. All such boasting is evil. So for one who knows the right thing to do and does not do it, it is a sin.— St. James in his only letter (4: 13 — 17)
Perspective, redux: here is St. James’s sentiments express by another person in another time and another place. Read it aloud in your best “Willie-the–Groundskeeper’s” voice or “Fat Bastard’s” voice.
To a Mouse, On Turning Her Up in Her Nest with the Plough
Wee, sleekit, cow’rin, tim’rous beastie, O, what a panic’s in thy breastie! Thou need na start awa sae hasty, Wi’ bickering brattle! I wad be laith to rin an’ chase thee, Wi’ murd’ring pattle!
—Robert Burns, 1785, (Courtesy of RobertBurns.org)
Advice versus Corroboration: here is a quote that we like, but with we don′t entirely agree:
“No one wants advice, only corroboration.”
—John Steinbeck
We think that Steinbeck is a little too general here. We prefer: insecure people don′t want advice, only corroboration, but we readily admit that it is not as pithy.
Personal insecurity creates enormous incentive problems (with large agency costs) within organizations.
We like the justification of academic tenure as a way to mitigate this type of costly insecurity. See our post Insidious Insecurity or Incentives in Academia by H. Lorne Carmichael in The Journal of Political Economy, June 1988, Volume 96, No. 3, pages 453 – 472.
Moral Fiber and Principle: by all accounts, Saint Thomas More was a man of strength and principle – not expediency or weakness. He was willing to die for his convictions and principles and for what he believed the truth to be.
There’s nothing new or old about that, but it is as rare today as at any time in the past.
We are not sure whether he actually said it at his trial or whether it is simply a line – a very compelling line nonetheless – in Robert Bolt’s play and movie, A Man for All Seasons.
“Why Richard, it profits a man nothing to give his soul for the whole world… Ahh, but for Wales?”
It is, of course, an allusion to the Gospels of Luke (9:25), Mark (8:36), and Matthew (16:26): For what will it profit a man if he gains the whole world and forfeits his soul?
Evidence of the Fallen Nature of Man: (1) it is very easy to believe in the fallen nature of men; so few of them listen to us, and (2) there is no better place to see the fallen nature of man than in Catholic school sports. (Hey, as any priest will tell you, it is a community of sinners.)