The Economist Magazine - The World in 2036: Nassim Taleb looks at what will break, and what won't
Paradoxically, one can make long-term predictions on the basis of the prevalence of forecasting errors. A system that is over-reliant on prediction (through leverage, like the banking system before the recent crisis), hence fragile to unforeseen “black swan” events, will eventually break into pieces. Although fragile bridges can take a long time to collapse, 25 years in the 21st century should be sufficient to make hidden risks salient: connectivity and operational leverage are making cultural and economic events cascade faster and deeper. Anything fragile today will be broken by then.
The great top-down nation-state will be only cosmetically alive, weakened by deficits, politicians’ misalignment of interests and the magnification of errors by centralised systems. The pre-modernist robust model of city-states and statelings will prevail, with obsessive fiscal prudence. Currencies might still exist, but, after the disastrous experience of America’s Federal Reserve, they will peg to some currency without a government, such as gold.
Companies that are currently large, debt-laden, listed on an exchange (hence “efficient”) and paying bonuses will be gone. Those that will survive will be the more black swan-resistant—smaller, family-owned, unlisted on exchanges and free of debt. There will be large companies then, but these will be new—and short-lived.
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Related previous posts:
Nassim Taleb describes Antifragility for the Economist
AntiFragility: How to Live in a World We Don’t Understand – By Nassim Nicholas Taleb
- Nassim Taleb Quote
"So the central tenet of the epistemology I advocate is as follows: we know a lot more what is wrong than what is right, or, phrased according to the fragile/robust classification, negative knowledge (what is wrong, what does not work) is more robust...
- Nassim Taleb Quotes (prediction)
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- Time To Tackle The Real Evil: Too Much Debt - By Nassim Nicholas Taleb And Mark Spitznagel
The core of the problem, the unavoidable truth, is that our economic system is laden with debt, about triple the amount relative to gross domestic product that we had in the 1980s. This does not sit well with globalisation. Our view is that government...
- Ten Principles For A Black Swan-proof World - By Nassim Nicholas Taleb
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- The Washington Post: A Conversation With Nassim Nicholas Taleb
How do you define a Black Swan? If they're so unexpected, how can we prepare for them? A Black Swan is an exception, like the bird. It is an event with massive consequences that is unexpected. My idea is not simply to say that these things happen....