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Nassim Nicholas Taleb: A thinker with an antifragile ego

"He talks in a machine-gun patter that combines Tony Soprano-style profanity with some stratospherically esoteric jargon."

When I meet him at a central London hotel, Nassim Nicholas Taleb, the Lebanese-born Wall Street trader-turned-polymath and author, is uncharacteristically flustered. He’s in the middle of a short visit to the UK to publicise his new book, Antifragile: How to Live in a World We Don’t Understand, and he’s just spoken on the phone to a journalist in Singapore. Instead of asking about the book, the journalist had asked Taleb for some stock tips. “I can’t tell him where the stock market is going,” he says exasperatedly. It seems the hapless interviewer hadn’t absorbed the lessons about the limits of prediction that Taleb tries to teach in Antifragile and its hugely successful predecessor, The Black Swan, published in 2007.

“I’m so beat,” he confesses. “But one coffee and I’ll be fine.” He orders an Americano, cajoles me into ordering a pot of tea (I’d asked for a glass of water) and settles down. Soon he’s expounding his theory of antifragility (roughly, you’re antifragile if volatility and randomness make you stronger rather than weaker) in a machine-gun patter that combines Tony Soprano-style profanity with some stratospherically esoteric jargon (“Anything fragile has to have a negative second-order derivative”).

Taleb describes Antifragile as his “finest work”. “It’s the real book,” he says – presumably because in it he tries to generalise arguments about randomness and risk that were applied more narrowly in The Black Swan to the financial markets and the malfunctioning predictive models that brought them to the brink of collapse with the crisis of 2007-2008. I ask if he’d felt vindicated by the Great Crash. “No. In 2007 and 2008 I felt depressed. Then you feel anger. You can’t believe my outrage at the economic establishment and at Washington.”

Moral hazard

Before The Black Swan was published, Taleb had been a prophet without honour in the United States. “I knew before the crash that the system was going to blow up. In 2003, I went to the New York Times and said, ‘Fannie Mae [the Federal National Mortgage Association] is sitting on dynamite with taxpayers’ money. These guys are going to blow up with my money because they don’t know what the fuck they’re doing risk-wise.’” But the “Gray Lady” didn’t listen. “I just had smear campaign after smear campaign.”

Taleb is currently engaged in a feud with the Times’s star columnist Thomas Friedman (“He’s after me now”), whom he lambasts in the book for being a cheerleader for the Iraq war. Like the senior executives at the bailed-out banks, Friedman “paid no price for his mistakes”.

He seems consumed by what the political philosopher Michael Sandel calls “bailout outrage”. “On some things I’m very left-wing. I want to protect the weak.” However, his only venture into practical politics has brought him into the orbit of the Conservatives. He has met David Cameron and his advisers on a number of occasions in Downing Street. “They like my idea that the larger the project, the more problems it’s going to have.”

Taleb seems uninterested in what kinds of policy Cameron’s enthusiasm for his ideas might lead to. “The connection with Downing Street is only on the intellectual level. What they’ve done with my work is not my business. My only practical advice to the government is: do something symbolic to break the backs of the bankers.”

He could be waiting a while for it to accomplish something like that. In any case, he’s not a natural courtier. He says he has only two friends in Washington, both of them marginal, maverick figures: the left-wing activist and former independent presidential candidate Ralph Nader (Nader’s parents were from Lebanon, and he and Taleb speak to each other in a local Arabic dialect) and the libertarian congressman Ron Paul.

Taleb’s own marginal position seems intensely self-willed – he’s a proud autodidact and a failed academic (although one reward for his recent literary success was a distinguished professorship in risk engineering at New York University). He tells me about the time he was thrown out of an economics conference in Paris. “Previously I’d said, ‘You’re wrong,’ and nobody cared. So I said, ‘Ce n’est même pas l’incompétence.’ Silence. ‘C’est immoral.’ It’s immoral to sell these economic models. They blew a fuse on me.”

He enjoys playing the part of the lonely speaker of truth to power, though another anecdote, about testifying before a committee of the House of Representatives, suggests that he also chafes at the impotence that goes with it. “When I went to Washington, they had this document about how the financial crisis had happened. It said every fucking thing except what I’d told them about moral hazard. And they didn’t include my name, even though I’d spent a day testifying. So you realise there’s something going on there.”

Jonathan Derbyshire is Managing Editor of Prospect. He was formerly Culture Editor of the New Statesman.

This article first appeared in the 24 December 2012 issue of the New Statesman, Brian Cox and Robin Ince guest edit

Photo: Getty Images
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It's time for the government to think again about Hinkley Point

The government's new nuclear power station is a white elephant that we simply don't need.

Today I will welcome Denis Baupin, Vice President of the French Assembly, to Hinkley.

His own choice to come and visit the site of the proposed new nuclear power station reflects his strong desire to prevent the UK disappearing up a dangerous dark alley in terms of energy policy. It also takes place as France takes a totally different path, with the French government recently adopting a law which will reduce nuclear energy in the country.

Greens have opposed Hinkley ever since the government announced its nuclear strategy. Hinkley, with its state aid and an agreed strike price of £92.50 per megawatt, has always been financially and legally suspect but it is now reaching the level of farce. So much so that George Osborne is required to be economical with the truth in front of a House of Lords committee because he cannot find anything honest to say about why this is a good deal for the British people.

Mr Baupin and I will join hundreds of protestors – and a white elephant – to stand in solidarity against this terrible project. The demonstration is taking place under a banner of the triple risks of Hinkley. 

First, there are the safety and technological risks. It is clear that the Pressurised Water nuclear reactor (EPR) – the design proposed for Hinkley C – simply does not work. France’s nuclear safety watchdog has found multiple malfunctioning valves that could cause meltdown, in a similar scenario to the 1979 Three Mile Island nuclear accident in the US.  The steel reactor vessel, which houses the plant’s nuclear fuel and confines its radioactivity, was also found to have serious anomalies that increase the risk of it cracking. Apart from the obvious safety risks, the problems experienced by the EPR reactors being built at Flammanvile in France and Olkiluoto in Finland have pushed the projects years behind schedule.

Secondly, Hinkley poses risks to our energy security. Hinkley is supposed to produce 7% of the UK's energy. But we now know there will be no electricity from the new nuclear plant until at least 2023. This makes power blackouts over the next decade increasingly likely and the only way to avoid them is to rapidly invest in renewable energy, particularly onshore wind. Earlier this week Bloomberg produced a report showing that onshore wind is now the cheapest way to generate electricity in both the UK and Germany. But instead of supporting onshore wind this government is undermining it by attacking subsidies to renewables and destroying jobs in the sector. 

Thirdly, there is the risk of Chinese finance. In a globalised world we are expected to consider the option of allowing foreign companies and governments to control our essential infrastructure. But it is clear that in bequeathing our infrastructure we lose the political control that strengthens our security. The Chinese companies who will be part of the deal are part owned by the Chinese government and therefore controlled by the Chinese Communist Party. What a toppy-turvy world globalisation has created, where our Conservative British government is inviting the Chinese Communist party to control our energy infrastructure. It also seems that China National Nuclear Company is responsible for the manufacture of Chinese nuclear weapons.

Of course it is the Chinese people who suffer most, being at the hands of an oppressive government and uncontrolled companies which show little respect for employment rights or environmental standards. By offering money to such companies from British consumers through their energy bills our government is forcing us to collude in the low human rights and environmental standards seen in China.  

Research I commissioned earlier this year concluded we can transform the South West, not with nuclear, but with renewables. We can generate 100 per cent of our energy needs from renewables within the next 20-30 years and create 122,000 new quality jobs and boost the regional economy by over £4bn a year.

The white elephant of Hinkley looks increasingly shaky on its feet. Only the government’s deeply risky ideological crusade against renewables and in favour of nuclear keeps it standing. It’s time for it to fall and for communities in the South West to create in its place a renewable energy revolution, which will lead to our own Western Powerhouse. 

Molly Scott Cato is Green MEP for the southwest of England, elected in May 2014. She has published widely, particularly on issues related to green economics. Molly was formerly Professor of Strategy and Sustainability at the University of Roehampton.