Ten principles for a Black Swan-proof world – Nassim Nicholas Taleb

1. What is fragile should break early while it is still small. Nothing should ever become too big to fail. Evolution in economic life helps those with the maximum amount of hidden risks – and hence the most fragile – become the biggest.

2. No socialisation of losses and privatisation of gains. Whatever may need to be bailed out should be nationalised; whatever does not need a bail-out should be free, small and risk-bearing. We have managed to combine the worst of capitalism and socialism. In France in the 1980s, the socialists took over the banks. In the US in the 2000s, the banks took over the government. This is surreal.

Global Dashboard: Ten principles for a Black Swan-proof world

(Via Chris Arkenberg)

Black Swan review/summary by Dan Hill

Dan Hill provides an excellent summary of The Black Swan and includes a few excepts specifically useful to designers and urban planners.

This is a book that I almost didn’t read. Like The Long Tail or Here Comes Everybody, for instance. Both books I own but don’t feel the need to read, feeling that I’ve already having experienced much of what lies inside. This betrays my own arrogance I suppose, and I’ve no doubt I’ve missed a few profound insights this way. But given the choice I prefer to read about things I don’t know, books that don’t promise to back up my existing ideas. Then there are those like Gladwell’s Blink or The Tipping Point, books whose title more or less says it all. A quick rifle through the pages of these books in an airport bookshop – in that peculiar pre-flight mode of having no time and time on your hands – is enough to get the gist, and speculate as to their point.

The Black Swan almost fell into this category, but a recommendation by Paul Schütze and a few others meant that I did pick it up – at Melbourne Airport, ironically – and consumed it voraciously.

It’s not so much a popular science book as a popular statistics book, not a genre I would’ve thought probable to emerge, and thus something of a black swan in itself.

Full Story: City of Sound.

Another good overview can be found by reading The Telegraph’s interview with Taleb

Benoit Mandelbrot and Nassim Nicholas Taleb think the financial crisis may be as serious as the American Revolution

(Thanks Clifford Pickover)

Nassim Nicholas Taleb: the prophet of boom and doom

Banks should be more like New York restaurants. They come and go but the restaurant business as a whole survives and thrives and the food gets better. Banks fail but bankers still get millions in bonuses for applying their useless models. Restaurants tinker, they work by trial and error and watch real results in the real world. Taleb believes in tinkering – it was to be the title of his next book. Trial and error will save us from ourselves because they capture benign black swans. Look at the three big inventions of our time: lasers, computers and the internet. They were all produced by tinkering and none of them ended up doing what their inventors intended them to do. All were black swans. The big hope for the world is that, as we tinker, we have a capacity for choosing the best outcomes.


We should be mistrustful of knowledge. It is bad for us. Give a bookie 10 pieces of information about a race and he’ll pick his horses. Give him 50 and his picks will be no better, but he will, fatally, be more confident.

We should be ecologically conservative – global warming may or may not be happening but why pollute the planet? – and probablistically conservative. The latter, however, has its limits. Nobody, not even Taleb, can live the sceptical life all the time – ‘It’s an art, it’s hard work.’ So he doesn’t worry about crossing the road and doesn’t lock his front door – ‘I can’t start getting paranoid about that stuff.’ His wife locks it, however.

Full Story: Times Online

(via Zenarchery)

Karl Popper is nearly forgotten today, but at least some of his messages are gaining some new currency.

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