Nassim Taleb Invents Capitalism

The man has been railing against the buncombe of risk management for years.   And he laid it on the line, bet against the orthodoxy in finance and shot the moon in late september, shorting many investment banks.   He claims his funds have made 50 to 80 percent profits.  And while not as truly mind quake inducing as he would like you to believe, his books have pop and verve and have reminded many of Hume and Popper’s insights.   So he deserves great respect.  But Taleb is a strange turkey: in this video he lays out his vision of what capitalism 2.0 will look like. He says in the old version, profits on risk were privatized and losses socialized.  In 2.0, profits and losses will all be privatized. 

Errr, I hate to break it to you. This is capitalism.  What Taleb describes, whatever that newfangled turducken economy we’ve had up and running the last 80 years, that sure as hell wasn’t capitalism.  The enlightened call it a mixed economy.

Anyway, Taleb says things are going to get much worse.  To avoid confirmation bias, and with great debt to Philip Tetlock, I’d like all of the naysayers out there to construct some scenario where the economy unexpectedly improves over the next two years.  What would have to be true for this to happen?  What are your weakest assumptions?


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