Nassim Nicholas Taleb - The Black Swan

I don't even know where to begin with this event at Politics and Prose. Taleb and his book require little introduction at this point and I am looking forward to finally reading it. My impression of the man himself is that he is truly brilliant, quite witty, and while I try to hold back from describing people thus as it is an overused term, there is no other way of saying it: he is extremely arrogant. I suppose he has some right as one of the people who essentially predicted the global financial meltdown. Nevertheless he is completely dismissive of mainstream and progressive economists who do not see the world exactly as he does today.

His talk, and the additional chapter of the Black Swan updated for the second edition, was about attribute of national economies and systems that make them more fragile or more robust. Fragility is caused by specialization, optimization, globalization, basically all the buzzwords we have been engrained to think of as good things. Robustness (safety) is identified by redundancy basically. I have not read his book yet so I am not sure whether he means to apply these categoies only at the macro level or at the micro level as well. At the macro level, he is certainly correct. At the micro level, I think it is fair to say that while these concepts are in tension, and that operating at one extreme may indeed cause fragility, it does not mean we should not encourage people and companies to operate at those extremes. After all, it is specialization that has led to many of the comforts of the modern economy. I think the case for a social safety net for individuals that fail in this high risk/high reward micro economy is reinforced though.

I am skeptical Taleb would agree with that though as his own prescription national economic actors is fiscal austerity in the face of this recession. He seems to have pivoted from identifying the root cause as the absurd risks and fragility of the global financial system to identifying the solution as the elimination of debt. The world is complicated so I won't go so far as to say these things are not related, but it does not appear to be a direct causal link. And he seems to ignore a lot of other relevant research. This is also where his arrogance comes into play. He would probably be a fascinating person to have an open intellectual conversation with about different ideas, but he seems to have very little respect for the theories of very prominent thinkers such as Keynes and Paul Krugman, even belittling the Nobel committee's math skills for rewarding Krugman with the award.

The question and answer period was enlightening and comic as someone standing on the sidelines as he verbally sparred with several questioners, cutting people off, and insulting them to their face. The civility was somewhat lacking on both sides but his reputation precedes him as someone who will act this way so it is hard to say he does not bring this on himself. Anyway, interesting evening.