Not a Black Swan: Nassim Taleb on What the Coronavirus Teaches Us About Our Institutions

Pandemics are predictable events, in a sense. They are not individually predictable, in the sense that we know what sort of new pathogen will emerge in what location in what year. But they are statistically almost inevitable, given enough time, enough disruption of wild habitat (allowing zoonotic diseases to make the leap into humans), and enough mass movement of people and goods around the world. It did not take a crystal ball to predict that something like the global spread of the SARS-CoV-2 virus would eventually occur. You spin the roulette wheel enough times, eventually you lose.

Not only have epidemiologists been sounding the alarm and urging pandemic preparedness for many years, but so have many scholars who study risk, randomness, and uncertainty. This includes our era's veritable prophet of risk and uncertainty: Nassim Nicholas Taleb, who co-authored a January 26th paper warning that the spread of COVID-19 would be "nonlinear" and potentially severe.

You could do a lot worse than Taleb, whom we’ve called the Patron Saint of Strong Towns thinking, as a guide to the new normal (which was actually the old normal, you just didn’t know it yet). So we’re always happy to see him getting major press. Taleb is the subject of a new profile in The New Yorker entitled “The Pandemic Isn’t a Black Swan but a Portent of a More Fragile Global System.” It leads off with his adamant denial that the novel coronavirus is a "black swan" event. He should know: Taleb coined the term "black swan" in his 2007 book of the same name to refer to "an unpredictable, rare, catastrophic event." The New Yorker piece describes Taleb's irritation:

Besides, the pandemic was wholly predictable—he, like Bill Gates, Laurie Garrett, and others, had predicted it—a white swan if ever there was one. “We issued our warning that, effectively, you should kill it in the egg,” Taleb told Bloomberg. Governments “did not want to spend pennies in January; now they are going to spend trillions.”

Taleb's interest is in what the pandemic reveals about the fragility of our institutions. The story historians tell about COVID-19 may prove to be less about the disease and more about its rapidly cascading effects on governmental and financial systems that have, for years, been more or less rigged to blow.

How do we build systems of governance and distribution (of food, medicines, energy, and other essential products of civilization) that can handle mounting random events like a global disease outbreak? Taleb is critical of "just-in-time" supply chains and production schedules, of "too big to fail" institutions, and of the hubris of those in power who attempt to manage risk without adequate contingency plans, believing that the future can be predicted from the average circumstances we've experienced so far (a delusion Taleb calls "naive empiricism"). 

The correct response, according to Taleb, is to decentralize power and flatten hierarchies, creating institutions that more closely mimic the redundancy of organic, natural systems. This allows pieces of a complex system to fail without endangering the whole. From The New Yorker:

But he does want the institutional equivalent of “circuit breakers, fail-safe protocols, and backup systems,” many of which he summarizes in his fourth, and favorite, book, “Antifragile,” published in 2012....

For Taleb, an antifragile country would encourage the distribution of power among smaller, more local, experimental, and self-sufficient entities—in short, build a system that could survive random stresses, rather than break under any particular one. (His word for this beneficial distribution is “fractal.”)

There should be an expansion of the powers of state and even county governments, where there is “bottom-up” control and accountability. This could incubate new businesses and foster new education methods that emphasize “action learning and apprenticeship” over purely academic certification. [Taleb] thinks that “we should have a national Entrepreneurship Day.” 

This doesn't mean a neutered federal government unable to assist in a crisis. Taleb sees a role for robust health insurance, for example, and for direct bailout payments—to individuals, not corporations. 

But ultimately, Taleb is on to something profound: in a world where extreme and rare events are inevitable, we need to abandon the delusion that we can account for and manage every risk. Instead, we need to build institutions self-organizing enough to recover from the fallout of unforeseen—but not unforeseeable—disasters.

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More on Strong Towns and the ideas of Nassim Taleb:

• Complex Cities (2014)

• “Small is Beautiful, But Also Less Fragile” Podcast Series (Part 1 | Part 2)

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Cover photo via Flickr. Creative Commons license.