Taleb, the Anti-Talebian
In his excellent, "Fooled by Randomness," Nassim Nicolas Taleb expresses his disappointment in the disconnect between the philosopher Karl Popper and his private life. Taleb writes,"I have some sobering information about Popper the man. Witnesses of his private life find him rather un-Popperian." He then goes on to explain all the ways that Popper failed to live and act according to his own philosophy.
Well, I have some sobering information about Nassim Nicolas Taleb the man....
I should preface this by saying I am not a Taleb hater. I am actually more of a fanboy. I have read all of his collection of books that he calls the "Incerto" and love them. I reread them on a regular basis. I highly recommend them to other people. Taleb's ideas have been highly influential to the way that I invest and live my life.
But as I write this from my house during a state-mandated lockdown in response to the global Covid-19 virus pandemic, I am saddened to say that Taleb's response to this pandemic has been very un-Talebian.
Here are four reasons why:
1) Taleb is missing the point of his own precautionary principle.
Taleb has been influential in the global response to COVID19 based on his paper (co-written with Joe Norman and Yaneer Bar-Yam), "Systemic Risk of Pandemic via Novel Pathogens – Coronavirus." In this paper, written in January of 2020 before much was known about the virus, Taleb outlines a number of risks associated with it including the spreading rate, the reproductive ratio, and the mortality rate. These, he argues, are largely unknown, possibly being underestimated, and that "these observations lead to the necessity of a precautionary approach to current and potential pandemic outbreaks that must include constraining mobility patterns in the early stages of an outbreak, especially when little is known about the true parameters of the pathogen."
Keep in mind the argument here. In January, we had a largely unknown virus with a huge potential downside (deaths in the millions). His recommendation, at the time, was not a lockdown but to take big steps to restrict travel and slow the spread until the virus could be better understood.
Taleb likes to use the helpful illustration that it is better to mistake a stone for a bear (and run) than to mistake a bear for a stone (and be eaten). His argument in January was that this virus was unknown and therefore we should treat it like a bear, temporarily, until it is better understood. Some have suggested that the Trump administration was aware of this paper and their decision to limit some travel from China was influenced by it.
And, at the time, I agreed with him. Making small but important sacrifices to prevent a potential Spanish Flu-like disease makes all the sense in the world.
It is important to be clear why Taleb was so concerned about this virus. His concern, stated from the beginning was, the multiplicative nature of a pandemic.
In other words, car crashes might kill a lot of people (1.25 million a year) and Covid19 may currently kill a tiny fraction of that but because pandemics are multiplicative. Car crashes, if anything, will reduce in number next year. But a pandemic that is growing exponentially could increase 1000x next year. This is why Taleb called Trump an idiot for comparing it to the flu. The flu is a known. It kills a lot of people but it will not double or grow exponentially.
And when Taleb first sounded the alarm the virus appeared to be growing exponentially globally. Death appeared to be growing exponentially. That had to be addressed.
But the key to the precautionary principle is that it applies only until we understand things better. You don't keep treating a stone like a bear after you know it is a stone. So rightly we reacted with precaution but as we did, it was important to ask questions. One important question had to be, "is this virus as dangerous as we thought?"Another important question might be, "what are the mitigation strategies that both limit the spread of the virus and minimize potential harmful side effects?"
So, how would we know if the bear was a stone or the stone was a bear? The answer, according to Taleb, was found in the difference the linear and the exponential. If the growth of deaths was linear (like car crashes) that would put Covid19 in a different category (by Taleb's own insistence) than if the growth was multiplicative and exponential. The precautionary principle requires that we act with precaution until that is determined.
From early March to early April, the growth looked exponential. On March 1, there were 73 deaths globally. On April 1, there were 5,190! In the face of this growth, it certainly made sense of freak out a little bit.Nations around the world started to take draconian measures. Whole populations were locked down. Businesses were closed. Mobility was frozen.
And, then, April 1 there seemed to be a turning point globally.
Since that time, daily deaths caused by COVID19 globally have no longer multiplied daily. Instead, the number of deaths has become quite linear. This should be a cause for celebration for everyone! The feared outcome of a Spanish Flu-like disease (or worse) does not appear to be happening.
So... was this bear was actually a rock?
Not so fast.... maybe the bear really was a bear and our freakout just worked really well. Maybe if we stop freaking out (ending the lockdown) the deaths will start to multiply again?
This is a critical question. We should be very interested in answering this. How much mitigation is needed to prevent the multiplication?
But do not ask Taleb this question. He will block you and call you an idiot. Taleb, despite the fact that Corona deaths are no longer multiplying, is not evaluating whether a continued full lockdown is needed to stop it.
How would we answer that question? One thing might be to look at countries, states, and regions that utilized various levels of mitigation (from no mitigation efforts, to limited mitigation efforts, to a full lcodkown) and use that data to see what mitigation is needed to slow the spread of the virus. One helpful datapoint is Sweden that reacted quite differently to the rest of Western Europe. Sweden, contrary to popular belief, did not do ZERO mitigation, they did quite a bit of mitigation. They avoided crowds, stopped going to theater, and were generally very careful (masks, handwashing, etc). But they did not do a full government mandated lockdown like many of their neighbors. That seems like a nation that we would be very interested in. How did this mitigation work? Did Sweden's COVID19 death rate keep its multiplicative quality or did it become linear? The answer is that it became linear. Like much of the rest of the world, death rates flattened after April 1.
Excellent! This is what we want! If Sweden's approach can work, then perhaps full lockdowns are not needed to remove the multiplicative nature of the pandemic. Sweden, judging by the results for the past month, did it without a full lockdown!
So, is Taleb rejoicing? Strangely no. He is unleashing blistering attacks on anyone that dares to bring up Sweden. A month after Sweden had removed the multiplicative nature of its death rate, Taleb trashed a reader for daring to look at nations like Japan and Sweden that had removed the multiplicative death rate without lockdowns.
But this makes no sense! Taleb himself trashed the idea of comparing raw numbers without considering rates of growth. The question was never how many deaths there are currently but to what degree that rate is increasing. Sweden's rate appears steady. This seems like something that at the very least should interest us.
In addition to Sweden there are a wide variety of states in the US that could be studied. Some locked down early, some waited, and some never fully locked down. How did these states do? What lessons can we learn? The answer is that there does not appear to be a lot of correlation between lockdown day/extent, and the growth of deaths. Again, it appears that more limited mitigation strategies work as well as lockdowns. Another thing we might do is study states as they end lockdowns. Georgia ended their lockdown two weeks ago and if lockdowns are required you would expect to see a spike in deaths. But so far, we have not (although this week will give us a clearer picture).
This should encourage us all.
Taleb's recent tack on this has been to suggest that government policy doesn't matter that much because people self quarantine. But does he seriously not see how much better it is to do something voluntarily than involuntarily? To be able to leave home if you need to? Run a business if you need to? Get elective surgeries? Keep food on the table for your family?
None of these questions seem to interest Taleb. He seems to have lost track of what his own precautionary principle teaches. The extreme precaution only makes sense at the beginning when things are unknown.
2) Failure to acknowledge the possibility of secondary effects (even when they have the potential for massive and deadly blow ups)
Taleb says that IYIs (Intellectuals yet idiots) typically, "get first order logic right but not the second order (or higher) effects making him totally incompetent in complex domains."
So Talebian philosophy should cause us all to be very focused on potential second order effects. Government policies and behaviors that have not been implemented since germ theory was understood are now being implemented. We are locking entire populations in their houses. We are stopping all global and domestic travel. We are dumping trillions of dollars into a system that was already debt leveraged. What are the potential effects of that?
Many have asked these questions. Before listing some of these concerns, I want to note that I am not predicting anything specific. A big part of Talebian philosophy is not to predict but to identify areas of fragility. Things that might go wrong. Potential blow ups. Protect against those Talebian philosophy says. When you are talking about millions of deaths, the odds of the prediction are not that important. Just avoid it at all cost. Taleb uses the example of Russian Roulette quite a bit. The key to Russian Roulette is not to calculate the odds that there will be a bullet in the chamber but to avoid playing altogether. When the downside is catastrophic avoid the whole thing.
So... what are some of these secondary effects that could be catastrophic?
Some wonder about food disruption and the potential for global famines. The UN recently warned that global famine was possible. "We can expect more global deaths due to secondary impacts of COVID-19 than the virus itself -- the World Food Program currently estimates that 265 million in 55 countries will be on the brink of starvation by the end of the year," said Ian Bradbury, CEO of Canada-based humanitarian organization 1st NAEF.
Even if the real number that starve to death is a fraction of that, given that COVID19 is now growing linearly (not exponentially) the number dead due to starvation resulting from lockdowns will far exceed the number dead due to Coronavirus. And that number might end up being much much higher. That number is simply considering the economic effects. But what about the effects of locusts that are now devastating Africa due to covid19 restrictions? And what about other secondary effects we have not thought of? An entire globe shutting down its economy at the same time has never been done before... how many millions will die of starvation?
But Taleb seems blind to this possibility. In fact, he mocks it. He explicitly said of India that "no one starved" due to the lockdown.... not realizing or not caring that an incredibly important word was missing... "YET."
What if a million people starve? What if 10 million starve? The world has had worse man-made famines in recent history. Has Taleb really not even considered this secondary effect of the lockdown? How unTalebian.
Others have warned about the spread of disease due to the lockdown. This may seem counterintuitive but many diseases are held in check by regular exercising of our immune system. A man who lives in a bubble is sure to get sick when he leaves it. And then there are diseases that can be exacerbated by not getting treatment due to the lockdown. For example, some have warned of a potential growth of tuberculosis due to the lockdowns. The head of a global partnership to end tuberculosis (TB) argues up to 6.3 million more people are predicted to develop TB between now and 2025 and 1.4 million more people are expected to die as cases go undiagnosed and untreated during lockdown. Millions dead due to the lockdown? I don't know the odds of that but it is clearly a possible catastrophic secondary effect that we should not just dismiss. It is a bullet in the chamber of the gun we are holding to our head.
And what of the mental and family effects of the lockdown? Increases in suicide, substance abuse, and food addictions are thought to be likely due to the lockdown. During the 2007-2009 recession, 10,000 people are thought to have committed suicide in the US and Europe due to the economy. If this slow down is 10x worse and affects the whole globe... will we have 100,000 or more? Who knows. Again, I am not predicting anything. I am simply noting risks. Given that suicides spike during economic crashes, it is something that needs to be considered. But even if people do not actually kill themselves the mental pain of isolation is nothing to sneeze at. As someone who loves and cares for people who suffer from depression and anxiety, I can tell you that this lockdown has been incredibly painful for them. And what about domestic abuse? Experts say that the lockdown raises tensions in already unhealthy homes and has caused a spike of abuse. How much damage does this do? How many lives will be permanently damaged by this?
Taleb doesn't seem to consider this. Seeking to end the lockdown in his mind is "geronticide" and the idea of locking down costing lives is "bunk." Would a true Talebian call these statements IYI?
But perhaps the greatest threat in my mind is not the threat of the loss of life or sanity but the loss of our nation and our way of life for generations to come. The United States (and much of the Christian West) was built on the idea that leaders are sinful people and that power corrupts. As Lord Acton said, "Power tends to corrupt, and absolute power corrupts absolutely." For this reason, the founders of our nation took extreme caution to limit the powers of politicians. After years of living under tyranny, they were prepared to die rather than go back to it. Patrick Henry famously said, "give me liberty or give me death." And the constitution was written accordingly. The Bill of Rights put safety and caution to the side and focused on limiting government instead. Half of the first 10 amendments promote freedom to the direct detriment of law enforcement! For them it was better to let murderers go free than to let government lock up unjustly. For them, the greatest threat was not death but unchecked government power. But what have we done with this lockdown? Without passing a single bill, Governors have locked up entire populations. Churches have been shuttered. Protests have been illegalized. Surveillance has been widely employed. Business owners have been jailed. Basic freedoms have been set aside. And a large percentage of the population... perhaps a majority... have cheered these developments.
Will we ever get our freedoms back? Now that we have granted this incredible and unchecked power to our leaders, what abuses might be in store in the future? Anyone that knows about the Patriot Act and how it was abused should know the answer to this question. During a time of emergency ("people were dying") we granted our government great surveillance capabilities in order to catch terrorists. Our government now tracks everything we do. Edward Snowden recently wrote that the goal of our intelligence agencies with regards to data is"everything, on everyone, forever." He titled his book, "permanent record," and warned that with this power of a permanent record on all of us, the government could (and was already in some cases) destroy lives simply by looking for crimes in that record. All of us have done something wrong in our past.... now the government will know about it. If the government abused something as simple as the power to track us, how will they abuse the power to control each of us physically without anything more than a gubernatorial decree? Patrick Henry would shiver. Government never gets less powerful during a crisis. What will become of our way of life if this goes on much longer?
Further, we have a nation that has been sitting on an economic tinderbox for years. Taleb rightly warned of the banking system before the 2007-2009 meltdown.....where is he today? How many mortgages payments have been withheld so far? How many rent payments have been withheld? How many banks will fail? And if the solution is government spending to avoid this meltdown, what does that do to our currency? Bloomberg says that since the 2007-2009 crisis, the money supply in the system has doubled. They titled the article, "Money has no meaning anymore." Really? What does that do to the poor? What does that do to our country? What happens when the global currency all melts down at the same time? There is a saying that currency wars turn into real wars. Is war a possibility?
Taleb doesn't seem too interested in any of this. He continues to insist that the only possible reason that people might want to end a lockdown is for their own personal enrichment (and possibly a disregard for the elderly). No. Taleb appears to be completely blind to the massive secondary effects that might come as the result of this lockdown.
Taleb once wrote, "The IYI pathologizes others for doing things he doesn’t understand without ever realizing it is his understanding that may be limited. He thinks people should act according to their best interests and he knows their interests...."
Hmmm. The IYI pathologizes others from doing what he doesn't understand? How many times in the past few weeks has Taleb called people doing what he does not understand "psychopaths?"
3) Offering advice without any skin in the game.
Taleb wrote,“Beware of the person who gives advice, telling you that a certain action on your part is “good for you” while it is also good for him, while the harm to you doesn't directly affect him.” (Skin in the Game, page 51)
Taleb is famous for setting up his investments where he gains from disorder. He posted earlier this year on a hedge fund he is associated with gaining billions from the economic crash. He has been ready (financially) for an economic crash for years. Further, even if he didn't make a penny, he has long been financially secure (he calls it F-you money) and also is a best selling author that is unlikely to be hurt by high unemployment rates or a prolonged economic depression. He is able to sit back and offer advice from a very safe place. If his advice works out, it is good for him but if it is wrong, it will be bad for us (potentially very bad) but he will not be hurt.
He is like Thomas Friedman giving advice on the Iraq War. Very Un-Talebian.
4) Living safe lives over heroic lives...
"The classical man's worst fear was inglorious death; the modern man's worst fear is just death," Taleb wrote in the Bed of Procrustus (page 97).
One of the things I loved about Antifragile was the end where he talked long about being a person that does not seek safety, security, and uniformity. His extended discussion on Seneca and stoicism is beautiful (see pages 151-153). The stoic faces the challenges of life without fear or retreat.
Taleb's vision of risk then is not to avoid risk but to know when and why you are taking chances. Take the right chances. Avoid the wrong risks. If you are going to blow up, do it because you saw the risk and you were willing to take it.
One of the aspects of COVID 19 is that it kills mostly older people. The overwhelming majority of those dead are older than 60. Less than 5% that have died are under 45 years old. Now, when I look at the lockdown protests what do I see? I largely see people that are 60 years old. Some in wheelchairs. I think of my parents that hate the lockdown. I think of old pastors who died in order to have services. In short, I think of people that are at risk, know they are at risk, and want to end the lockdown anyway. I think of people who love this country and fear the other secondary risks (that Taleb seems so blind to). I love these people. I respect them. They are heroic - facing risk without fear in order to accomplish what they want to accomplish.
But Taleb pathologizes them. He calls them idiots. Psychopaths. BS-ers. They are the true Stoics while Taleb is acting like his vision of a neurotic.
Very unTalebian, Mr. Taleb.
In conclusion, I still love Taleb's books. They have so many good ideas. They have helped my life in many ways. I just wish that Taleb would live by them.