I’ll be joining Nassim Taleb at PowerHouse Arena in Brooklyn, 7 pm on November 28 for the launch of his new book, AntiFragile. Ticket info here.
Here is the EconTalk episode we did on the manuscript version of the book. Looking forward to reading the final product.
And here is Taleb’s WSJ piece that draws on the book (HT: Liam O’Neill). Very Hayekian on the limits of knowledge and the illusion that volatile processes should be tamed rather than used as a way to grow. Here’s Rule 1 of the five rules he suggests for coping with volatility:
Rule 1: Think of the economy as being more like a cat than a washing machine.
We are victims of the post-Enlightenment view that the world functions like a sophisticated machine, to be understood like a textbook engineering problem and run by wonks. In other words, like a home appliance, not like the human body. If this were so, our institutions would have no self-healing properties and would need someone to run and micromanage them, to protect their safety, because they cannot survive on their own.
By contrast, natural or organic systems are antifragile: They need some dose of disorder in order to develop. Deprive your bones of stress and they become brittle. This denial of the antifragility of living or complex systems is the costliest mistake that we have made in modern times. Stifling natural fluctuations masks real problems, causing the explosions to be both delayed and more intense when they do take place. As with the flammable material accumulating on the forest floor in the absence of forest fires, problems hide in the absence of stressors, and the resulting cumulative harm can take on tragic proportions.