'We should discourage the concentration of power in big corporations, “including a severe restriction of lobbying,” Taleb told me. “When one per cent of the people have fifty per cent of the income, that is a fat tail.” Companies shouldn’t be able to make money from monopoly power, “from rent-seeking”—using that power not to build something but to extract an ever-larger part of the surplus. There should be an expansion of the powers of state and even county governments, where there is “bottom-up” control and accountability. This could incubate new businesses and foster new education methods that emphasize “action learning and apprenticeship” over purely academic certification. He thinks that “we should have a national Entrepreneurship Day.”
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At the same time, Taleb adamantly opposes the state taking on staggering debt. He thinks, rather, that the rich should be taxed as disproportionately as necessary, “though as locally as possible.” The key is “to build on the good days,” when the economy is growing, and reduce the debt, which he calls “intergenerational dispossession.” The government should then encourage an eclectic array of management norms: drawing up political borders, even down to the level of towns, which can, in an epidemiological emergency, be closed; having banks and corporations hold larger cash reserves, so that they can be more independent of market volatility; and making sure that manufacturing, transportation, information, and health-care systems have redundant storage and processing components. (“That’s why nature gave us two kidneys.”) Taleb is especially keen to inhibit “moral hazard,” such as that of bankers who get rich by betting, and losing, other people’s money. “In the Hammurabi Code, if a house falls in and kills you, the architect is put to death,” he told me. Correspondingly, any company or bank that gets a bailout should expect its executives to be fired, and its shareholders diluted. “If the state helps you, then taxpayers own you.”
Some of Taleb’s principles seem little more than thought experiments, or fit uneasily with others. How does one tax more locally, or close a town border? If taxpayers own corporate equities, does this mean that companies might be nationalized, broken up, or severely regulated? But asking Taleb to describe antifragility to its end is a little like asking Thomas Hobbes to nail down sovereignty. The more important challenge is to grasp the peril for which political solutions must be designed or improvised; society cannot endure with complacent conceptions of how things work. “It would seem most efficient to drive home at two hundred miles an hour,” he put it to me.“But odds are you’d never get there.” ''Indeed, if Taleb is
chronically irritated, it is by those economists, officials, journalists, and executives—the “naïve empiricists”—who think that our tomorrows are likely to be pretty much like our yesterdays. He explained in a conversation that these are the people who, consulting bell curves, focus on their bulging centers, and disregard potentially fatal “fat tails”—events that seem “statistically remote” but “contribute most to outcomes,” by precipitating chain reactions, say. (Last week, Dr. Phil told Fox’s Laura Ingraham that we should open up the country again, noting, wrongly, that “three hundred and sixty thousand people die each year “from swimming pools — but we don’t shut the country down for that.” In response, Taleb tweeted, “Drowning in swimming pools is extremely contagious and multiplicative.”) Naïve empiricists plant us, he argued in “The Black Swan,” in “Mediocristan.” We actually live in “Extremistan.”
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The coming of global information networks deepened Taleb’s concern. He reserved a special impatience for economists who saw these networks as stabilizing—who thought that the average thought or action, derived from an ever-widening group, would produce an increasingly tolerable standard—and who believed that crowds had wisdom, and bigger crowds more wisdom. Thus networked, institutional buyers and sellers were supposed to produce more rational markets, a supposition that seemed to justify the deregulation of derivatives, in 2000, which helped accelerate the crash of 2008.
As Taleb told me, “The great danger has always been too much connectivity.” Proliferating global networks, both physical and virtual, inevitably incorporate more fat-tail risks into a more interdependent and “fragile” system: not only risks such as pathogens but also computer viruses, or the hacking of information networks, or reckless budgetary management by financial institutions or state governments, or spectacular acts of terror. Any negative event along these lines can create a rolling, widening collapse—a true black swan—in the same way that the failure of a single transformer can collapse an electricity grid.
COVID-19 has initiated ordinary citizens into the esoteric “mayhem” that Taleb’s writings portend. Who knows what will change for countries when the pandemic ends? What we do know, Taleb says, is what cannot remain the same. He is “too much a cosmopolitan” to want global networks undone, even if they could be. But he does want the institutional equivalent of “circuit breakers, fail-safe protocols, and backup systems,” many of which he summarizes in his fourth, and favorite, book, “Antifragile,” published in 2012. For countries, he envisions political and economic principles that amount to an analogue of his investment strategy: government officials and corporate executives accepting what may seem like too-small gains from their investment dollars, while protecting themselves from catastrophic loss.
Anyone who has read the Federalist Papers can see what he’s getting at. The “separation of powers” is hardly the most efficient form of government; getting something done entails a complex, time-consuming process of building consensus among distributed centers of authority. But James Madison understood that tyranny—however distant it was from the minds of likely Presidents in his own generation—is so calamitous to a republic, and so incipient in the human condition, that it must be structurally mitigated. For Taleb, an antifragile country would encourage the distribution of power among smaller, more local, experimental, and self-sufficient entities—in short, build a system that could survive random stresses, rather than break under any particular one. (His word for this beneficial distribution is “fractal.”)
We should discourage the concentration of power in big corporations, “including a severe restriction of lobbying,” Taleb told me. “When one per cent of the people have fifty per cent of the income, that is a fat tail.” Companies shouldn’t be able to make money from monopoly power, “from rent-seeking”—using that power not to build something but to extract an ever-larger part of the surplus. There should be an expansion of the powers of state and even county governments, where there is “bottom-up” control and accountability. This could incubate new businesses and foster new education methods that emphasize “action learning and apprenticeship” over purely academic certification. He thinks that “we should have a national Entrepreneurship Day.”
..
At the same time, Taleb adamantly opposes the state taking on staggering debt. He thinks, rather, that the rich should be taxed as disproportionately as necessary, “though as locally as possible.” The key is “to build on the good days,” when the economy is growing, and reduce the debt, which he calls “intergenerational dispossession.” The government should then encourage an eclectic array of management norms: drawing up political borders, even down to the level of towns, which can, in an epidemiological emergency, be closed; having banks and corporations hold larger cash reserves, so that they can be more independent of market volatility; and making sure that manufacturing, transportation, information, and health-care systems have redundant storage and processing components. (“That’s why nature gave us two kidneys.”) Taleb is especially keen to inhibit “moral hazard,” such as that of bankers who get rich by betting, and losing, other people’s money. “In the Hammurabi Code, if a house falls in and kills you, the architect is put to death,” he told me. Correspondingly, any company or bank that gets a bailout should expect its executives to be fired, and its shareholders diluted. “If the state helps you, then taxpayers own you.”
Some of Taleb’s principles seem little more than thought experiments, or fit uneasily with others. How does one tax more locally, or close a town border? If taxpayers own corporate equities, does this mean that companies might be nationalized, broken up, or severely regulated? But asking Taleb to describe antifragility to its end is a little like asking Thomas Hobbes to nail down sovereignty. The more important challenge is to grasp the peril for which political solutions must be designed or improvised; society cannot endure with complacent conceptions of how things work. “It would seem most efficient to drive home at two hundred miles an hour,” he put it to me.“But odds are you’d never get there.”
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The Pandemic Isn’t a Black Swan but a Portent of a More Fragile Global System, April 21, 2020
ContextBazaarmodel - Management & organization(Banking Reform - English/Dutch) '..a truly stable financial and monetary system for the twenty-first century..'To create the
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Art of Being Human(Global Healing 2020 - 2050)(BBC) - Oceans can be successfully restored by 2050, say scientists(Global Healing 2020 - 2050)(Fusion Energy) - Total Transformation - '..the elimination of want.'Holistic education - '..educating the whole child as its major priority..'Agora2Grid