It is clear that these are alternative methods of co-ordinating production. Yet, having regard to the fact that, if production is regulated by price movements, production could be carried on without any organization at all might we ask, why is there any organization?

A firm, therefore, consists of the system of relationships which comes into existence when the direction of resources is dependent on an entrepreneur... As a firm gets larger, there may be decreasing returns to the entrepreneur function, that is, the costs of organising additional transactions within the firm may rise.

I hate when people ask me to: "Massage the data".

If you torture the data long enough, it will confess.

If economists wished to study the horse, they wouldn’t go and look at horses. They’d sit in their studies and say to themselves, "what would I do if I were a horse?"

In fact, a large part of what we think of as economic activity is designed to accomplish what high transaction costs would otherwise prevent or to reduce transaction costs so that individuals can negotiate freely and we can take advantage of that diffused knowledge of which Friedrich Hayek has told us.

In my youth it was said that what was too silly to be said may be sung. In modern economics it may be put into mathematics.