Nassim Taleb recommends abolishing the Nobel Prize in economics because economic theory has done so much harm. He’s much given to adages and rude epigrams: “Academia is to knowledge what prostitution is to love.” He tells us that “Social science means inventing a certain brand of human we can understand.”
Nassim Taleb, author of the risk-management best seller “The Black Swan,” emerged from a self-imposed media blackout this week to endorse Ron Paul’s 2012 campaign for president, saying Ron Paul is the only candidate offering “the right remedies” for the U.S. economy.
On Tuesday, the campaign staff of GOP presidential candidate Ron Paul joyfully celebrated Taleb’s freshly TV-spread opinion that Paul, the most passionate anti-debt congressman, is the only candidate in the Republican primaries who makes sense on the issues that the United States now faces. Whether Paul has a chance to win the nomination or not, Taleb stands firmly behind him.
For much of history, the world believed all swans were white because only white swans had been seen. A “Black Swan” meant an impossibility. But after real black swans were sighted in 1697, the term came to mean the reverse: something that seemed impossible but turned out to exist. John Stuart Mill used it that way.
For Taleb, a Black Swan is an event with extreme impact that exists outside expectations because nothing we know predicts it. The First World War was a Black Swan, and so was 9/11. So was the crash of 2008. Taleb titled his best-known book, The Black Swan: The Impact of the Highly Improbable. It sold three million copies. The same metaphor flows through his articles, as when he refers to dangerous thinking “where the Black Swans breed.”
David Willetts, minister of state for universities and science, says: “There’s a very close link between Black-Swan thinking and what we’re doing on health or education.”
Taleb admits that we cannot avoid Black Swans because our tools of prediction are limited. But we need to avoid “fragility” by becoming so “robust” (two key Taleb words) that even a Black Swan won’t do us in. As individuals or nations, we must refrain from dangerous debt levels. “Robustification” and “anti-fragility” are essential goals. In September, Random House will publish the latest collection of Taleb’s thoughts, Antifragility, having reportedly paid a $4-million advance.