A leading economist charts the indirect road to happiness and wealth.
Using dozens of practical examples from the worlds of business, politics, science, sports, literature, even parenting, esteemed economist John Kay proves a notion that feels at once paradoxical and deeply commonsensical: The best way to achieve any complex or broadly defined goal-from happiness to wealth to profit to preventing forest fires-is the indirect way. As Kay points out, we rarely know enough about the intricacies of important problems to tackle them head-on. And our unpredictable interactions with other people and the world at large mean that the path to our goals-and sometimes the goals themselves-will inevitably change. We can learn about our objectives and how to achieve them only through a gradual process of risk taking and discovery-what Kay calls obliquity.
Kay traces this pathway to satisfaction as it manifests itself in nearly every aspect of life. The wealthiest people-from Andrew Carnegie to Bill Gates-achieved their riches through a passion for their work, not because they set materialistic goals. Research has shown that companies whose goal (as declared in mission statements) is excellent products or service are more profitable than companies whose stated goal is increasing profits. In the personal realm, a large body of evidence shows that parenthood is on a daily basis far more frustrating than happy- making. Yet parents are statistically happier than nonparents. Though their short-term pleasure is often thwarted by the demands of childrearing, the subtle-oblique-rewards of parenthood ultimately make them happier.
Once he establishes the ubiquity of obliquity, Kay offers a wealth of practical guidance for avoiding the traps laid by the direct approach to complex problems. Directness blinds us to new information that contradicts our presumptions, fools us into confusing logic with truth, cuts us off from our intuition (which is the subconscious expression of our experience), shunts us away from alternative solutions that may be better than the one we’re set on, and more. Kay also shows us how to acknowledge our limitations, redefine our goals to fit our skills, open our minds to new data and solutions, and otherwise live life with obliquity.
This bracing manifesto will convince listeners-or confirm their conviction-that the best route to satisfaction and success does not run through the bottom line.

The finance sector of Western economies is too large and attracts too many of the smartest college graduates. Financialization over the past three decades has created a structure that lacks resilience and supports absurd volumes of trading. The finance sector devotes too little attention to the search for new investment opportunities and the stewardship of existing ones, and far too much to secondary-market dealing in existing assets. Regulation has contributed more to the problems than the solutions.
Why? What is finance for? John Kay, with wide practical and academic experience in the world of finance, understands the operation of the financial sector better than most. He believes in good banks and effective asset managers, but good banks and effective asset managers are not what he sees.
In a dazzling and revelatory tour of the financial world as it has emerged from the wreckage of the 2008 crisis, Kay does not flinch in his criticism: we do need some of the things that Citigroup and Goldman Sachs do, but we do not need Citigroup and Goldman to do them. And many of the things done by Citigroup and Goldman do not need to be done at all. The finance sector needs to be reminded of its primary purpose: to manage other people’s money for the benefit of businesses and households. It is an aberration when the some of the finest mathematical and scientific minds are tasked with devising algorithms for the sole purpose of exploiting the weakness of other algorithms for computerized trading in securities. To travel further down that road leads to ruin.

Much economic advice is bogus quantification, warn two leading experts in this essential book. Invented
numbers offer false security; we need instead robust narratives that yield the confidence to manage uncertainty.
Some uncertainties are resolvable. The insurance industry’s actuarial tables and the gambler’s roulette wheel both
yield to the tools of probability theory. Most situations in life, however, involve a deeper kind of uncertainty, a radical
uncertainty for which historical data provide no useful guidance to future outcomes. Radical uncertainty concerns
events whose determinants are insufficiently understood for probabilities to be known or forecasting possible. Before
President Barack Obama made the fateful decision to send in the Navy Seals, his advisers offered him wildly divergent
estimates of the odds that Osama bin Laden would be in the Abbottabad compound. In 2000, no one–not least
Steve Jobs–knew what a smartphone was; how could anyone have predicted how many would be sold in 2020? And
financial advisers who confidently provide the information required in the standard retirement planning package–
what will interest rates, the cost of living, and your state of health be in 2050?–demonstrate only that their advice
is worthless.

The limits of certainty demonstrate the power of human judgment over artificial intelligence. In most critical
decisions there can be no forecasts or probability distributions on which we might sensibly rely. Instead of inventing
numbers to fill the gaps in our knowledge, we should adopt business, political, and personal strategies that will be
robust to alternative futures and resilient to unpredictable events. Within the security of such a robust and resilient
reference narrative, uncertainty can be embraced, because it is the source of creativity, excitement, and profit.