Monday, February 6, 2023
No Result
View All Result
  • Media
Support Us
Macdonald-Laurier Institute
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
    • Jobs
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Energy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • COVID and after: A mandate for recovery
    • COVID Misery Index
      • Beyond Lockdown
    • Provincial COVID Misery Index
    • Centre for Advancing Canada’s Interests Abroad
      • Dragon at the Door
      • The Eavesdropping Dragon: Huawei
    • An Intellectual Property Strategy for Canada
    • Speak for Ourselves
    • Canada and the Indo-Pacific Initiative
    • DisInfoWatch.org
    • The Transatlantic Program
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Talkin’ in the Free World with Mariam Memarsadeghi
    • Past Projects
      • Justice Report Card
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Inside Policy Magazine
      • Inside Policy Back Issues
      • Inside Policy Blog
    • Papers
    • Columns
    • Books
    • Commentary
    • Straight Talk
    • Video
    • Multimedia
    • Podcasts
    • Leading Economic Indicator
    • Labour Market Report
    • MLI in the Media
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
    • Jobs
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Energy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • COVID and after: A mandate for recovery
    • COVID Misery Index
      • Beyond Lockdown
    • Provincial COVID Misery Index
    • Centre for Advancing Canada’s Interests Abroad
      • Dragon at the Door
      • The Eavesdropping Dragon: Huawei
    • An Intellectual Property Strategy for Canada
    • Speak for Ourselves
    • Canada and the Indo-Pacific Initiative
    • DisInfoWatch.org
    • The Transatlantic Program
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Talkin’ in the Free World with Mariam Memarsadeghi
    • Past Projects
      • Justice Report Card
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Inside Policy Magazine
      • Inside Policy Back Issues
      • Inside Policy Blog
    • Papers
    • Columns
    • Books
    • Commentary
    • Straight Talk
    • Video
    • Multimedia
    • Podcasts
    • Leading Economic Indicator
    • Labour Market Report
    • MLI in the Media
No Result
View All Result
Macdonald-Laurier Institute

Op/Ed – Let’s Celebrate Risk

April 4, 2013
in Columns
Reading Time: 4 mins read
A A

In today’s Financial Post, MLI’s Philip Cross talks about the value of risk taking and how uncertainty can lead to innovation and success.

Antifragile: Thriving on risk

Philip Cross, Financial Post, April 4th, 2013

Nassim Taleb was described as “Wall Street’s principal dissident” when he was trading options based on the theory elaborated in his well-known book, The Black Swan.  In his view, unpredictable events like the September 11 terrorist attacks or the 2008 financial crisis occur more often and with more effect than conventional models of uncertainty acknowledge.

Taleb’s latest book, Antifragile, elaborates on this theory.  Since many events can’t be anticipated, but occur frequently, it’s counter-productive to organize our lives around avoiding shocks or minimizing their impact.Instead, we should structure our existence to thrive on shocks when they occur.  Hence the notion of antifragile, which refers to things or people that gain from volatility and uncertainty.

It is the opposite of fragility, which shatters when the unexpected occurs.Like the book, the concept is difficult to grasp, but worth the effort.

Well-meaning people, like planners and parents,who strive “to squeeze every drop of variability and randomness out of life” are doomed to fail. Worse, their attempts to minimize risk actually make the world more dangerous by denying the experience gained from dealing with events that stress systems or individuals. Volatility in life is beneficial because it forces us down the uncharted road of improvisation, experimentation and self-discovery.

This helps to answer the question, “How do you innovate?” Talebresponds: “First, try to get in trouble.” Apple’s greatest achievements occurred after its late 1990s near-death experience, a hopeful example for our auto industry and Blackberry. On a personal level, the people that made you grow and develop the most are those who tried to harm you, not those who tried to help, if the harm was not irreparable.Since life is subject to so much uncertainty, humans need to be rooted in conventions that have stood the test of time.

The commitment to this Edmund Burke strand of conservatism is so deep that he questions drinking orange juice or brushing teeth because they are comparatively new-fangled in human history. But this conservatism should not be confused with resistance to change; his measure of how alive you are is “checking if you like variations.” Clearly, this is someone who would rather work in the resource sector than in government.

The antifragile viewpoint prefers age-tested heuristics to technology based on the scientific method. More specifically, it is deeply skeptical about school-based education compared with uncodifiable, intuitive, or experience-based knowledge.  As the noted philosopher Yogi Berra said, “In theory, there is no difference between theory and practice; in practice, there is.

“This is why economic models failed during the 2008 meltdown. As an example of how necessity is the best teacher, Taleb argues the fastest way to learn a foreign language is spending a month in jail with people who speak that tongue.

The obsession of economists with the very top and bottom of the income distribution is ironic, as Taleb’s fundamental point is that they don’t properly weigh the ‘tail risks’ at the extreme ends of the probability distribution for highly-disruptive events. Growing income inequality in the U.S. is heralded as a positive sign of an increasing number “of risk-takers crazy enough to have ideas of their own,”striving to create wealth and produce innovations that ultimately benefit all.Taleb proposes a National Entrepreneur Day to celebrate risk-takers, especially the large number who fail and thereby point the way for others to succeed. Ruined entrepreneurs should be treated by society with almost the same reverence shown for dead soldiers. This shows how the antifragility of a system like the economy requires fragility in its parts-the same idea of learning from mistakes is why airplane safety improves with every crash.

In the pecking order of Antifragile, entrepreneurs are at the top while “talkers” like academics and politicians are at the bottom, since they escape the brunt of the fall-out of their errors. Taleb is scathing in his assessment of Joseph Stiglitz, hailed by redistributionists as a leading economist, who first wrote a report saying Fannie Mae would never go bust, and then in 2010 claimed he had predicted the crisis.Taleb contemptuously dubs this hypocrisy Stiglitz Syndrome. It is a variant of what I call Krugman Syndrome.  That’s where someone leverages a Nobel Prize awarded in one field of economics (trade for Krugman, information forStiglitz) as a platform to pontificate on matters in which they are not experts (macroeconomics for Krugman, inequality for Stiglitz).

Above all else, Taleb despises people who prescribe lifestyles they don’t live, like champagne socialists or womanizing popes. People who proselytize a way of life must “eat their own cooking”; don’t say money can’t buy happiness unless you give away all your income above $50,000. He favours extending the principle underlying the old Roman system of forcing engineers to sleep under bridges they had built, giving real meaning to “having skin in the game.

“The book is not without its imperfections. There is more about Taleb’s personal life than needed. Readers of The Black Swan will find parts of Antifragile repetitious. Still, overall it is an outrageous tome in the best sense, questioning many ideas we take for granted, a rigorous and authentic antidote to the inundation of sound-bites of conventional modern wisdom in our lives.

Philip Cross is the Research Co-ordinator for the Macdonald-Laurier Institute and the former Chief Economic Analyst at Statistics Canada.

 

Previous Post

Restoring equity and Promoting wise stewardship in Canada’s equalization program

Next Post

Macdonald-Laurier Institute Announces New Director of Communications

Related Posts

Greedflation? It’s a government thing: Philip Cross in the Financial Post
Columns

Jagmeet Singh uses confusion about private care to support the status quo: Shawn Whatley in the National Post

February 6, 2023
Building the Free and Open Indo-Pacific with like-minded partners: A view from Japan – Akiko Fukushima for Inside Policy
Inside Policy

Building the Free and Open Indo-Pacific with like-minded partners: A view from Japan – Akiko Fukushima for Inside Policy

January 31, 2023
How pipelines went from villain to hero in Indigenous reconciliation: Heather Exner-Pirot in the Calgary Herald
Columns

Alberta must assert itself over oil and gas against unilateral emissions cuts: Jack Mintz and Janice MacKinnon in the National Post

January 30, 2023
Next Post

Macdonald-Laurier Institute Announces New Director of Communications

Macdonald-Laurier Institute

323 Chapel Street, Suite #300
Ottawa, Ontario
K1N 7Z2 Canada

613.482.8327

info@macdonaldlaurier.ca
MLI directory

Follow us on

Newsletter Signup

First Name
Last Name
Email Address

Support Us

Support the Macdonald-Laurier Institute to help ensure that Canada is one of the best governed countries in the world. Click below to learn more or become a sponsor.

Support Us

Inside Policy Magazine

  • Current Issue
  • Back Issues
  • Advertising
  • Inside Policy Blog
  • Privacy Policy

© 2021 Macdonald-Laurier Institute. All Rights reserved.

No Result
View All Result
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
    • Jobs
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Energy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • COVID and after: A mandate for recovery
    • COVID Misery Index
      • Beyond Lockdown
    • Provincial COVID Misery Index
    • Centre for Advancing Canada’s Interests Abroad
      • Dragon at the Door
      • The Eavesdropping Dragon: Huawei
    • An Intellectual Property Strategy for Canada
    • Speak for Ourselves
    • Canada and the Indo-Pacific Initiative
    • DisInfoWatch.org
    • The Transatlantic Program
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Talkin’ in the Free World with Mariam Memarsadeghi
    • Past Projects
      • Justice Report Card
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Inside Policy Magazine
      • Inside Policy Back Issues
      • Inside Policy Blog
    • Papers
    • Columns
    • Books
    • Commentary
    • Straight Talk
    • Video
    • Multimedia
    • Podcasts
    • Leading Economic Indicator
    • Labour Market Report
    • MLI in the Media

© 2021 Macdonald-Laurier Institute. All Rights reserved.

IDEAS CHANGE THE WORLD!Have the latest Canadian thought leadership delivered straight to your inbox.
First Name
Last Name
Email address

No thanks, I’m not interested.