Ep 46. Black Swans and the Precautionary Principle part 1

The mindcrime liberty show discusses the work of Nassim Taleb and his Black Swan book/idea and precautionary principle.  Today we will discuss black swan events and are they a rigorous concept. The term black swan comes from the medieval expression that said "you’d sooner see a black swan than some (fill in rare seemingly unpredictable event...say George Bush, Barack Obama and Osama Bin laden share a win in the nobel prize in chemistry)."  Unfortunately European explorers found a black swan in Australia!  Maybe the chemistry prize might not be so rare and unpredictable.  What exactly is and isn’t a predictable event.  What exactly is science?  Is science merely making correct predictions or is it a prior theorizing? How much data does one need in a sample before the 100 year flood  (or financial crash) or thousand year flood shows up in the data sample (clearly more then 50 years of data).  If that event doesn’t show up in ones empirical data does it even exist?  Is that a blind spot of empiricism and statistics? Furthermore, are some things just in principle unpredictable?  Is Nassim Taleb a proto Misean (either richard or ludwig)?    Another key concept which Taleb may not have invented but definitely made mainstream is the idea of fat tails or that one event represents 90 percent (or higher) of the total.  WWII represents (contra Pinker) more deaths than most other wars.  No one cares or should care about the average war or the average height of a river or average height of a flood.  Its useless information.  The outliers are the events that are significant. WWI and WWII are clearly more significant than a series of small conflicts or small recessions.  Katrina is clearly a more significant hurricane than any minor tropical storm.    Nassim Taleb has clearly had “influence” for better or worse and arguably up until recent events Tim would argue for better. Next episode we discuss the precautionary principle and whether anything can be done to mitigate or prevent these high consequence events which may or may not be predictable as well as if one actually can do anything and want to do anything.   

 

Nassim Taleb work to critique Pinker and the idea of the long Peace.

https://www.fooledbyrandomness.com/pinker.pdf

 

Gary North's great criticism of Taleb 

https://www.lewrockwell.com/2007/03/gary-north/einstein-and-keynes/

 

Mises institute on Taleb 

https://mises.org/wire/when-nassim-taleb-channels-ludwig-von-mises 

 

Some Fundamental differences between Taleb and Mises.

https://mises.org/wire/some-fundamental-differences-between-ludwig-von-mises-and-nassim-taleb