Of Black Swans and Intellectual Fallacies

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Nassim Nicholas Taleb in conversation with David McWilliams 

 

By Jules Evans, Official ZEE Jaipur Literature Festival 2017 Blogger

 

There is a worldwide rebellion against the incompetence of experts, according to Nassim Nicholas Taleb, polymath author of Black Swan and Anti-Fragile.

‘People are fed up with serial incompetence’, said Taleb at the ZEE Jaipur Literary Festival. ‘There is a rebellion against the expert problem.’

He suggested that Brexit – the recent vote by the UK to leave the European Union – was a wise reaction to the over-centralized bureaucracy of the EU. ‘The bureaucrats there try to manage how many times your windscreen wiper moves up and down in a minute, yet they can’t even control borders.’

Nassim Taleb has previously suggested the EU is ‘doomed to fail’.  His latest comments will be music to the ears of Brexiters in the UK such as Michael Gove, former Justice Minister, who declared in the Brexit campaign that ‘people are tired of experts’.

The head of the Brexit campaign, Dominic Cummings, has also written that the EU is ‘programmed to fail’. He thinks the UK needs root-and-branch reform of the civil service, to make government quicker to respond to errors.

Taleb said he first saw signs of the ‘rebellion against experts’ in India: ‘The newspapers here were full of a rejection of pseudo-intellectuals and the pseudo-left.’

He noted that states have grown in size over the last century in many countries, with the proportion of GDP that comes from the state growing by five times in the US over the last century, and by ten times in France. ‘That means more civil servants, who don’t have ‘skin in the game’. A system with these properties will collapse.’

Taleb thinks that systems fail when they are run by people who don’t have ‘skin in the game’, meaning they are not punished for their failures. He gives the example of Robert Rubin, former secretary of the US Treasury and a senior advisor to Citigroup: ‘He received $110 million in bonuses from Citigroup over 10 years. When Citi went bust, he didn’t return the bonuses.’

How did the Roman Empire manage to survive so long, despite being a huge, international organization? ‘They understood skin in the game. They left city-states to run their own affairs, and just asked for 10% of revenues. If an architect built a bridge in ancient Rome, they were expected to sleep under it, with their families, so if it collapsed they were killed. That’s skin in the game.’ He’s also a fan of Greco-Roman value systems, like Stoicism. ‘We need to put classical values like honour back into the system.’

Taleb was particularly scathing about Davos, the annual meeting of experts at the World Economic Forum. ‘I was invited once and I made sure they never invited me again. I called them the International Association of Namedroppers. They think it’s their mission to solve a problem they don’t understand. They use buzzwords and destroy language. If someone is opposed to them, they’re a ‘populist’.’

His diatribe against experts and intellectuals drew a surprisingly warm response from the audience. ‘Larry Summers, Paul Krugman, Joseph Stigtliz [all famous economists] – people like this think they’re intelligent but they’re not. They cause more crises than they solve. The real expert is a dentist, a plumber, a rickshaw driver.’

 

Photo Credit: Rajendra Kapoor

 

 

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