They don’t learn, because they are not the victims of their own mistakes

Friday, August 4th, 2017

Nassim Nicholas Taleb shares his thoughts on interventionistas and their mental defects:

Their three flaws: 1) They think in statics not dynamics, 2) they think in low, not high dimensions, 3) they think in actions, never interactions.

The first flaw is that they are incapable in thinking in second steps and unaware of the need for it — and about every peasant in Mongolia, every waiter in Madrid, and every car service operator in San Francisco knows that real life happens to have second, third, fourth, nth steps. The second flaw is that they are also incapable of distinguishing between multidimensional problems and their single dimensional representations — like multidimensional health and its stripped, cholesterol-reading reduced representation. They can’t get the idea that, empirically, complex systems do not have obvious one dimensional cause and effects mechanisms, and that under opacity, you do not mess with such a system. An extension of this defect: they compare the actions of the “dictator” to the prime minister of Norway or Sweden, not to those of the local alternative. The third flaw is that they can’t forecast the evolution of those one helps by attacking.

And when a blow up happens, they invoke uncertainty, something called a Black Swan, after some book by a (very) stubborn fellow, not realizing that one should not mess with a system if the results are fraught with uncertainty, or, more generally, avoid engaging in an action if you have no idea of the outcomes. Imagine people with similar mental handicaps, who don’t understand asymmetry, piloting planes. Incompetent pilots, those who cannot learn from experience, or don’t mind taking risks they don’t understand, may kill many, but they will themselves end up at the bottom of, say, the Atlantic, and cease to represent a threat to others and mankind.

So we end up populating what we call the intelligentsia with people who are delusional, literally mentally deranged, simply because they never have to pay for the consequences of their actions, repeating modernist slogans stripped of all depth. In general, when you hear someone invoking abstract modernistic notions, you can assume that they got some education (but not enough, or in the wrong discipline) and too little accountability.

Now some innocent people, Yazidis, Christian minorities, Syrians, Iraqis, and Libyans had to pay a price for the mistakes of these interventionistas currently sitting in their comfortable air-conditioned offices. This, we will see, violates the very notion of justice from its pre-biblical, Babylonian inception. As well as the ethical structure of humanity.

Not only the principle of healers is first do no harm (primum non nocere), but, we will argue: those who don’t take risks should never be involved in making decisions.

This idea is weaved into history: all warlords and warmongers were warriors themselves and, with few exceptions societies were run by risk takers not risk transferors. They took risks — more risks than ordinary citizens. Julian the Apostate, the hero of many, died on the battlefield fighting in the never-ending war on the Persian frontier. One of predecessors, Valerian, after he was captured was said to have been used as a human footstool by the Persian Shahpur when mounting his horse. Less than a third of Roman emperors died in their bed — and one can argue that, had they lived longer, they would have fallen prey to either a coup or a battlefield.

And, one may ask, what can we do since a centralized system will necessarily need people who are not directly exposed to the cost of errors? Well, we have no choice, but decentralize; have fewer of these. But not to worry, if we don’t do it, it will be done by itself, the hard way: a system that doesn’t have a mechanism of skin in the game will eventually blow up and fix itself that way. We will see numerous such examples.

For instance, bank blowups came in 2008 because of the hidden risks in the system: bankers could make steady bonuses from a certain class of concealed explosive risks, use academic risk models that don’t work (because academics know practically nothing about risk), then invoke uncertainty after a blowup, some unseen and unforecastable Black Swan, and keep past bonuses, what I have called the Bob Rubin trade. Robert Rubin collected one hundred million dollar in bonuses from Citibank, but when the latter was rescued by the taxpayer, he didn’t write any check. The good news is that in spite of the efforts of a complicit Obama administration that wanted to protect the game and the rent-seeking of bankers, the risk-taking business moved away to hedge funds. The move took place because of the overbureaucratization of the system. In the hedge fund space, owners have at least half of their net worth in the funds, making them more exposed than any of their customers, and they personally go down with the ship.

The interventionistas case is central to our story because it shows how absence of skin in the game has both ethical and epistemological effects (i.e., related to knowledge). Interventionistas don’t learn because they they are not the victims to their mistakes. Interventionistas don’t learn because they they are not the victims of their mistakes, and, as we saw with pathemata mathemata:

The same mechanism of transferring risk also impedes learning.


  1. Faze says:

    Whew. Reading Taleb calls for skill and practice. You have to learn how to skim through the hot air, signaling, temporizing and space-filling to identify the one sentence per page that’s worth having read. He’s one of those authors you don’t really need to read in the original. You can get the gist from reviews and commentaries.

  2. David Foster says:

    On the other hand, the failure to intervene can also have layers and layers of unpredictable consequences. Consider, for example, the decision of France and Britain not to take military action at the time of German’s Rhineland incursion.

  3. Graham says:

    Agree with David Foster up to a point, especially as he said Rhineland and not Munich.

    I’m not likely to be convinced that Chamberlain was wrong at Munich anymore, tolerably convinced that Britain gained more by 2 more years than Germany did.

    But Rhineland. Maybe. Germany was pretty damned weak in 1936.

    But it still offers problems, though. Rhineland was German soil and although it was supposed to stay demilitarized it was still Germany. 18 years after the war ever fewer people in Britain or France seemed to buy the case that French security entitled them to dictate the location of German forces on German soil.

    A matter of nuance, perhaps. If the Germans started stationing huge forces, building scores of airfields, and so on, then it’d look different. The sort of arguments we’d have today over CFE issues.

  4. Graham says:

    And of course the interventions Taleb seems to be talking about aren’t questions like-

    “is our peer competitor enemy from the war less than a generation ago gearing up for another run or just resuming normal sovereign operations?” as in 1936 or indeed even “are the border adjustments they want similar to those we have taken ourselves in the past and have given our allies in recent years?” as in 1936.

    They are more like the equivalent of endless British or French colonial wars. Now that’s all fine and arguably a wholly legitimate use for professional, regular military forces, but it’s not what the GOP or Democrats have been selling the past generation.

    It is not a perpetual 1938 [or 1936, or even 1947].

  5. Space Nookie says:

    One problem with a 1936 Rhineland intervention was the (high) probability of turning the German government over to a Moscow-aligned socialist party and a likely GE-RU military alliance.

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