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Small is beautiful

During the 2018 Future of Leadership Conference, an interactive two-day Think Tank that included powerful keynotes, panel discussions and innovative interactive formats, we interviewed best-selling author Nassim Taleb, who shared his thoughts on achieving true progress.
By Sebastian Morgner.

Sebastian Morgner of the FLI interviewed financial risk analyst and bestselling author Nassim Taleb, to uncover his thoughts on achieving true progress.

Morgner: Mr. Taleb, you are a mathematician, economist and philosopher. Each of these disciplines can focus on progress, but how do you measure real progress?

Taleb: My idea is a little more restrictive than what people normally call progress. It is not economic and it is not generally technological. Let me explain, technologies are often alienating. The technologies that win are those that bring you back to the roots, those that bring life closer to nature.

Morgner: So, progress, for you, means stepping backwards?

Taleb: No, no. It means bringing us back to our real habitats. Take television for example, television was not a very good discovery. It alienates people. You sit down and you have someone talking to you rather than having a two-way conversation. Then social media came along and almost destroyed television. Therefore, social media is a progression from television, as it brings us into communication with each other again. Progression is marked by destruction, the technologies that are not fit for our environment must be destroyed.

Morgner: Can you give us some more examples?

Taleb: When you look through history, we’ve always had wars. But only more recently have we seen the development of true heavy weaponry. So, war today is far more destructive that it has been in the past, this is in part because our social maturity has not increased in line with our technological abilities. In a more general context, we should not take big systemic risks because of technology. We need to have a strong precautionary principle. A great example is climate change, we should not mess with things that we don’t understand, we have to be very cautious.

Morgner: Do you think we also need to be cautious of big economic risks?

Taleb: I think that we’re so much richer than our parents and grandparents that we don’t have to worry too much about these things. The only problem is that our understanding of economics is decreasing from generation to generation. I mean what you call economics is simply bad math that people are using. It doesn’t predict anything. Economics today can be compared to late 19th century medicine, a time when more people were dying because of their doctors than at any other time in history. Typically, in nature, there is a mechanism that busts these things, a principle of having ‘skin in the game.’ To have ‘skin in the game’ means to have liability. If I make a mistake in business, I become bankrupt, I exit the gene pool so to speak. If I am a driver and I make a mistake I can literally die. However, economists can make mistakes, they can harm others, but suffer no consequences themselves. They have no skin in the game.

Morgner: Do you mean it is better to not take risks so as to avoid all mistakes?

Taleb: No, this is exactly the misunderstanding of precaution. We shouldn’t over apply it. We should take a lot of risks, but only smaller risks, not existential ones. We should totally avoid risks of an existential kind. But for progress we need mistakes. A mistake can be harmful but also extremely helpful, it can have positive side effects. I call this an antifragile system that can handle randomness in a very positive way. So, a lot of people say, “well, it seems technology increases from error to error and it’s luck.” No, it’s not luck, it’s positive exposure to luck. For progress we need mistakes.

Morgner: What do you think are the biggest challenges that we have to overcome today?

Taleb: We have to understand reality better. We need a balance between theory and practice. For this, again please take economics as an example. It’s a world on its own. In finance we learn risks practically, but economists are not practitioners. They read each other, cite each other, work in universities and create their own circles. What happens when you want to teach your children finance? They won’t learn it from a finance person who knows all the tricks for survival. They learn it from economists. So, it breaks the chain of transmission of knowledge. There should be a lot more feedback between universities and practice.

Morgner: What should the economic system become?

Taleb: The thing that matters is scale. I want to convince people that small is beautiful. I ask people, “Find me a restaurant that has more than five hundred tables and can serve a decent meal.” Maybe you can, but there won’t be many. I think all in all life should be local. The smaller the unit the more of a personal choice you have by picking what community you want to live in and who you want to look up to. If you lived more closely with your neighbours, you would have more local friends. With that you would have a lot more governance because people live in a community. If you make a severe mistake, people will see you, people will notice you, so you will feel ashamed. And another important thing is to not have only a job but a profession.

Morgner: So, you say do something meaningful for yourself?

Taleb: Exactly. The thing is you identify with your profession. You have this in Germany. You still have a huge amount of investment into your work. You’re proud of your bread, you’re proud of your cars, you’re proud of whatever you’ve done. This to me is progress. I want everyone to wake up and say, “I want to do something I’m proud of, even if it’s insignificant.

Morgner: If you were able to bring all the relevant decision makers and budget holders to one table to propose some initiatives to them, what would they be?

Taleb: You see, I don’t like this business of big, of sitting together at a big table. My experience of these things like TED-style NGOs is that they are more destructive than constructive. They do not have a mechanism of introspection to know if they’re helping or harming. You see, they have this self-righteous view of what they’re doing. To me, if you want to help humanity, open a bakery, make good bread, be proud of it and do small things bottom-up rather than having these top-down mechanisms. I think that a good mechanism or a good system is not one that requires people to want to be saints. But a system that asks the people to do what they are made for. So, if someone tells me: “I want to help humanity and solve hunger,” I tell them, they can help humanity the best by being honourable, by doing their duty and contributing the smallest possible scale to the economy.

Veröffentlicht in Leadership Stories am 13.09.2023

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