Tuesday, December 25, 2012

The last book by Nassim Taleb

"Antifragile," the last book by Nassim Nicholas Taleb is about decision making in the face of uncertainty. Its main message is that, given the volatility and unpredictability of the future, it is best to adopt strategies (in life, work, investment) that are not only robust, but that benefit from randomness. Around this main idea, the author explains his preference for facts rather than opinions, and for practitioners rather than academics (especially economists). As an academic economist, it would not be appropriate for me to defend the profession in a corporatist way, but sometimes Taleb sounds a bit like a spoiled child indulging in prejudices (not only against academic economists, also against the Japanese, the Russian, an attitude close to finding excessive deterministic explanations, which he criticized in earlier work). Many of the ideas of the book, for example the problems derived from principal-agent situations, or "commission biases" in public (and other) interventions, or consumption cascades, have been also (and sometimes better) explained by academic economists of the traditional or the behavioural kind. Taleb shows no mercy for authors who saw no excessive risks in the strategies of financial institutions before the crisis, to write books claiming that they had predicted the crisis after it (like Stiglitz), or for central bankers who profited unethically although legally from their knowledge of financial regulations (like Blinder). Other economists, such as game-theorist Rubinstein or climate change expert Stern are mentioned in a much more favourable light. Although the book is the logical continuation of "Fooled by Randomness" and "The Black Swan", and it is full of useful and interesting insights, it does not have in my view the originality and power of the previous ones.

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