From his home office in Atlanta, Georgia, in mid-April, Taleb shared some insights in a candid conversation with a global virtual gathering of chief executives, tackling the pandemic from different fields, including economics, psychology, risk management and political science. Here are some of the key takeaways from the discussion:
The pandemic is not a “Black Swan.” The term Taleb coined in his 2007 book of the same name for an unpredictable, rare and catastrophic event does not apply to the current crisis, according to Taleb. He adds that the pandemic was predictable. He had, in his 2007 book The Black Swan, even mentioned the risk of a “very strange acute virus spreading throughout the planet”, and more recently on 26 January in a paper that he co-authored with Joseph Norman and Yaneer Bar-Yam, when the virus was still mainly confined to China. His pleas to “kill it in the egg” for prudence were largely ignored.
The importance of having skin in the game. For Taleb, people who have no profit and loss responsibilities are not capable of understanding how to handle the reality of the crisis. “If you are judged by your peers, not by reality, you are going to rot … you have a disease that is both multiplicative and deadly, you can’t wait for evidence.” According to Taleb, this crisis shows how popular psyche is ahead of academia. “My grandmother could have said wear a mask. Had we used masks then, in late January, we could have saved ourselves the stimulus.”
The future of globalization. When asked about the future of globalization as borders close, Taleb, a globalist himself, says that to preserve globalism, mechanisms that safeguard a specific region — circuit breakers — are required. By example, he says that by having border controls and some tariffs for selected critical merchandise, circuit breakers would be in place.
Rediscovered localism. One good thing with all of us confined “in our habitats,” is that we’ve rediscovered localism. The more local the governance, the better, Taleb says. As an example, he adds, “Italian mayors have proven more competent than WHO or CEC leaders. Everything centralized is being discredited.”
A “fake tradeoff.” Taleb insists that the concept of tradeoff between economy and public health is fake; that it is, in fact, foolish. We don’t have two different parallel universes, he says, warning that sending people back to work too early would be irresponsible. To protect the economy, we need to protect citizens.
The future of a new economy. According to Taleb, every crisis has a winner. Every crisis brings opportunity. If selling suits, make masks, adapt and try to make money out of it by changing your business line. You need to try to function. There will be another virus, this is not the last one.
While citing the obvious vulnerable sectors, including airlines and banks, Taleb warns that the education sector will also be significantly harmed. He explains, “Universities are a great thing, but why should I be paying so much when I can work locally and get lectures online? The education sector in America will be badly hit, and we are already seeing it.”
Taleb remains optimistic about humanity’s adaptability to coping with mounting, random events. “Look at crisis as a way to make lemonade.”
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