Wealth & Money Quote by Merton Miller

There is a quiet provocation in Miller admitting that a roomful of finance students went hunting for “obvious patterns” in capital structures and came back empty-handed. It reads like a professor’s shrug, but it’s really a pointed critique of how eagerly finance wants the world to be legible. By foregrounding “empirical work” and “data,” Miller preempts the easy accusation that theory is aloof; he’s saying, we tried the real world on for size, and it didn’t cooperate.

The subtext lands squarely in the Miller-Modigliani tradition: if you’re looking for a stable, universal recipe for the “right” mix of debt and equity, you may be chasing a mirage. In an idealized world, capital structure doesn’t create value; in the messy world, it’s distorted by taxes, bankruptcy risk, regulation, incentives, and managerial storytelling. So when the students can’t see patterns, it’s not just a null result - it’s evidence that the “pattern” might be contingent, firm-specific, regime-specific, and sometimes more narrative than law.

Miller’s intent is also pedagogical. He’s training readers to respect negative findings and to be suspicious of finance’s appetite for grand, predictive templates. The line punctures the industry’s faith in optimization, replacing it with a more uncomfortable truth: much of corporate finance is a patchwork of constraints and institutional quirks, not a clean equation waiting to be solved.