Nassim Nicholas Taleb

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Nassim Nicholas Taleb has his gifts, but, boy, is he a lot to take. He reminds me of the ego-crazy Uncle Excelsior that F. Murray Abraham played so perfectly on Louie.

In “Real Life Is Risk Taking,” a new Medium essay, the scholar takes his “Skin in the Game” theory to ridiculous lengths, revealing how impressed he was when he witnessed magician David Blaine seemingly stick an actual ice pick through his hand, no illusion, at a dinner party. What a couple of toolboxes.

Taleb is right to call out bankers and politicos who fiddle with the economy with no chance of getting burned, but his loathing for the expert class, the technocrats, is so all-consuming that during the election he exclaimed “absolutely no Hillary,” idiotically taunting the Democratic candidate as “Shillary.” He also seriously underestimated the peril of a Trump White House.

A now-deleted tweet:

Reading Trump all I see is protect your downside (unknown) risks. What’s behind the bluster is Fat Tony compatible.

— NassimNicholasTaleb (@nntaleb) March 26, 2016

From CNBC just prior to the election:

Not only is a Donald Trump presidency very possible, it’s also not all that much to worry about, scholar and author Nassim Taleb told CNBC’s Power Lunch.

Taleb said Trump is not as “scary” as people make him out to be.

“In the end, Trump is a real estate salesman,” Taleb said. “When you elect real estate salespeople to the presidency, they’re going to try deliver something.”

Because of that, Trump probably won’t do anything apocalyptic, Taleb said.•

In the Medium piece, he argues people responded to Trump because he was a “risk taker,” which is much easier to be when you’ve been handed wealth at birth and daddy buys several million dollars worth of chips to save your ass after you crap out as a casino owner. Even Trump’s many failings as a businessperson are spun into gold by Taleb, who seems to approve of macho idiocy–stabbing yourself or ripping off others–rather than more modest gifts like basic competency.

An excerpt:

The Donald

I have a tendency to watch television with the sound off. When I saw Donald Trump in the Republican primary standing next to other candidates, I became certain he was going to win that stage of the process, no matter what he said or did. Actually, it was because he had visible, very visible, deficiencies. Why? Because he was real and the public –composed of people who usually take risks, not the lifeless nonrisktaking analysts we will discuss in the next chapter –would vote anytime for someone who actually bled after putting an icepick in his hand than someone who did not. Or Trump was such a great actor that he should be performing in Greek tragedies. Arguments that Trump was a failed entrepreneur, even if true, actually prop up the argument: you’d even rather have a failed real person than a successful one, as blemishes, scars, and character flaws increase the distance between a human and a ghost.•


Things fall apart, sure, but which nations are most likely to? In “The Calm Before the Storm,” a Foreign Affairs piece by Nassim Nicholas Taleb and Gregory F. Treverton, the authors use five criteria to assess which states are most likely to crumble: a centralized governing system, an undiversified economy, excessive debt and leverage, a lack of political variability, and no history of surviving past shocks. (I wonder further if kleptocracy has had historical influence on such upheavals.) It’s an interesting thought experiment, though I think it only works as a rough outline. I mean, our new friend Cuba has long been on the wrong side of a number of those measurements, but that country hasn’t cratered. An excerpt:

When it comes to overall fragility, countries can vary from exhibiting no signs of fragility to being very fragile.

Saudi Arabia is an easy call: it is extremely dependent on oil, has no political variability, and is highly centralized. Its oil wealth and powerful government have papered over the splits between its ethnoreligious units, with the Shiite minority living where the oil is. For the same reason, Bahrain should be considered extremely fragile, mainly on account of its repressed Shiite majority.

Egypt should also be considered fragile, given its only slight and cosmetic recovery from the chaos of the revolution and its highly centralized (and bureaucratic) government. So should Venezuela, which has a highly centralized political system, little political variability, an oil-based economy, and no record of surviving a massive shock. Some of the same problems apply to Russia. It remains highly dependent on oil and gas production and has a highly centralized political system. Its one redeeming factor is that it surmounted the difficult transition from the Soviet era. For that reason, it probably lies somewhere between moderately fragile and fragile.

Then there is the China puzzle. China’s stunning economic growth makes its future hard to assess. The country has recuperated remarkably well from the major shocks of the Maoist period. That era, however, ended nearly four decades ago, and so the recovery is hardly a recent comeback and thus less certain to protect against future shocks. What’s more, China’s political system is highly centralized, its economy is dependent on exports to the West, and its government has been on a borrowing binge as of late, making the country more vulnerable to slowdowns in both domestic and foreign growth. Are the gains from past turmoil big enough to offset the weakness from debt and centralization? The most likely answer is no—that what gains China has accrued by learning from trauma are dwarfed by its burdens. With each passing year, those lessons recede further into the past, and the prospects of a Black Swan of Beijing loom larger. But the sooner that event happens, the better China will emerge in the long run.•

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