I highly recommend that you listen to this week’s EconTalk podcast. Russ Roberts’ guest is Nassim Taleb, author of The Black Swan. Taleb is always has interesting things to say.
I like this:
I want to live in a more robust society; the first thing I’ve got to do is get rid of expert problems because they make the society more fragile.
Recently in Korea, gentleman from the IMF; on a panel, sitting next to an economist who likes deficits–deficits necessary because we need to get out of the crisis. They don’t know history. We’re going to bail out Greece, and then we’ll get bailed out by Mars.
Gentleman from the IMF stood up and gave a 2-3 minute forecast for 2010-2014. Anyone in the room listening to the forecast without asking what his forecasts for 2008-2009 were in 2001-2007 needs to blow up again. I want a society where a gentleman like him can be as incompetent as he wants without it harming innocent people.
Expert problem. We give too much power to “experts” and they know much less than we think they do. Yet, we give these people power by changing things we do based on their ideas, forecasts and recommendations. So, at some point, there’s quite a bit riding on whether these guys are right or not.
When it turns out they’re wrong, Ba-Blam-O. Relying on experts makes society more fragile.
Similarly, he thinks the appeal of central planning makes society more fragile:
The appeal and the seductiveness of experts is also the appeal of design rather than trial and error. Politically there is a deep appeal to plans and top-down design rather than trial and error.
We are humans; if you want to have a shaman, just have to make sure it is not increasing black swan risks, not in a position to be fragilized from it.
Backwards, to American Medical Association; look at the food pyramid today and listen to my talk ten years from now. We know from De Vany and from the data–they [Medical Association] want you to eat carbs and they don’t want you to eat saturated fat; but a lot of the diseases that they say come from fats come from carbs.
So, a lot of people end up with diabetes and heart disease because they eat too many carbs following the generally accepted advice of experts.
Here are some additional interesting tidbits:
Do you have evidence that the gentleman is a terrorist? No. So why are you searching him? Small probability, but the consequences of his being a terrorist are humongous. Like looking at the world in 2 dimensions, 2-D, when the world has 3 dimensions. A lot of logic that has been studied in both mathematics and philosophy is so incomplete as to be unusable.
Governments provide a non-natural environment. Not many do-overs in nature. Evolution doesn’t give people a second chance. Survived this crisis, have higher tax bill; those who lost money in this crisis have a bigger tax break.
Large corporation eventually dictate to the states what they way. “I have 300,000 employees!” The last thing I want to hear is someone trying to hijack the state because they hire so many people. That’s an argument against giving you money–you’ve misused the resources that you were entrusted with. Now it’s time to let someone else hire those 300,000 people, who could use them more effectively.