Defense contractors are able to reap tremendous profits while rarely confronting the risks for which those profits are supposed to be the reward.

In industries where a lot of competitors are selling the same product - mangoes, gasoline, DVD players - price is the easiest way to distinguish yourself. The hope is that if you cut prices enough you can increase your market share, and even your profits. But this works only if your competitors won't, or can't, follow suit.

In the struggle between capital and labor, more often than not capital has won, because the real source of value for most companies has historically been the hard assets that they owned and controlled.

Self-dealing, essentially, occurs when managers run companies to line their own pockets instead of those of the companies' owners. It's been a perennial problem in American capitalism and became a real dilemma when America moved toward a model in which corporations would be run by professional managers who had only small ownership stakes.

Developing countries often have hypertrophied bureaucracies, requiring businesses to deal with enormous amounts of red tape.

The desire for reinvention seems to arise most often when companies hear the siren call of synergy and start to expand beyond their core businesses.

Markets work best when there's lots of information available and a historical track record to go on; they excel at predicting things like horse races, election outcomes, and box-office results. But they're bad at predicting things like who will be the next Supreme Court nominee, as that depends on the whim of the president.