Like many people, I found James Joyce’s masterpiece, Ulysses, tough going. So I am full of admiration for George Zipf, who sat down 50 years ago to count Joyce’s words. The main reason for admiration, however, is not his accomplishment of a tedious task. What the professor discovered changes the way we think about business and finance, and illuminates both the commercial strategy of Amazon and the way banks messed up their risk models.

The most common word in the English language is “the”. Zipf’s thesis was that this word appears twice as often as the second most common word, “of”; and 10 times as often as the 10th most common word, “was”, and so on. We know now that Zipf was misled by the exceptional diversity of Joyce’s vocabulary, but the basic idea was right.