Why Most Things Fail

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Book Author: Paul Ormerod
Abstract:

In Why Most Things Fail, Paul Ormerod strikes a blow for the pessimist. In a world where most business advice is based on the premise that an individual or firm can chart its own destiny, he takes a more jaundiced, and possibly, more realistic view - that most human endeavors are doomed to failure. Ormerod echoes Robert Burns that ‘The best-laid schemes o’ mice an’ men/Gang aft a-gley’, and goes on to explain why this must be so.

Here is a book that, if taken seriously, should give pause to managers who rely on advice from management consultants and gurus. These - in many cases, self-anointed - fountainheads of business wisdom make millions by peddling the formulae for success. But what if there are no such formulae, and in fact, failure is the most pervasive characteristic of business?

This book argues just that - almost all new products, businesses, and even plant and animal species are doomed to fail. The best strategies and the best intentions are no defense against the inevitability of failure.

Paul Ormerod, the author of Why Most Things Fail, is an economist, but an economist with a difference. He is willing to question the truths that are accepted unquestioningly by many of his fellow economists. Having served as the head of the Economic Assessment Unit at The Economist for several years, he also has the credentials to be taken seriously.

He questions some of the basic theories of conventional economics - for example, the supply and demand curves, and the concept of equilibrium price at which supply equals demand. According to Ormerod, supply and demand curves are not smooth curves in reality, and therefore, supply and demand can never reach equilibrium. Therefore, there is no such thing as an equilibrium price. Price is also not necessarily determined by demand in the current period - it can also depend on the demand in a prior period, and possibly, many other factors besides.

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