Nassim Nicholas Taleb on Self-Education and Doing the Math (Plus special guest Bryan Caplan)

Hey everyone, a few announcements before the show. First, this episode featuring Nassim Nicholas Taleb is immediately followed by a bonus segment. The bonus segment features Taleb and Bryan Caplan talking about Caplan's latest book, The Case Against Education. So that will play right after the conversation with Taleb. And of course, if you haven't checked out Bryan Caplan's conversation with Tyler, It's also right there in your podcast app. Second, you Talib fans will know he wrote a book called Antifragile, which is about things that gain from disorder. Audio recording systems do not gain from disorder, and ours failed for this live event. That means you're going to be hearing a backup audio recording, which unfortunately is of lower quality. If you're having trouble following along with the audio, I'd encourage you to click in the show notes to the transcript and enjoy the conversation that way. Lastly, this episode does contain some explicit language, so if you're listening with kids around, you might want to pop in the earbuds for this one. We'll be back in 2 weeks with Tyler's conversation with David Brooks. It sounds much better, I promise.

Conversations with Tyler is produced by the Mercatus Center at George Mason University. Bridging the gap between academic ideas and real-world problems. Learn more at mercatus.org. And for more conversations, including videos, transcripts, and upcoming dates, visit conversationswithtyler.com. We're very honored today to have with us the great Nasim Nicholas Talib. I'm reminded of the words of the Hall of Famer Ernie Banks from Chicago, who used to always say, Let's play two, when there was the possibility of a doubleheader. So I see Nicholas Taleb has been gracious enough to agree to this dual event where first he and I will converse and then he will talk with Brian Kaplan. And just to be clear, as always, this is the conversation with Nassim Nicholas Taleb I want to have, not the one that you want to have. So To start with a very basic question, on page 7 of The Black Swan, you mentioned the 1975 Lebanese Civil War as having been a black swan of sorts. And if we think back to the earlier history of the region, the growing role of the PLO in the country, the end of the Eisenhower Doctrine, which meant maybe the US would not intervene, the prior conflict in 1958, ongoing differences in birth rates with more Muslims being born. Wasn't it in a sense actually fairly predictable and not a black swan? How do you see the history of your own country in this way?

No, it's one that surprised everybody. It might have been predictable, but not at that scale for several reasons. The first one is that nobody understood the effect of modern weapons because previous conflicts were more local, you know, and more confined. You didn't have artillery, and then things died down quickly. And then you have another thing, that these idiots brought in the PLO, and after 1973, Lebanon, as a way that Lebanon wanted to stay neutral with Israel, sort of like neutral but engaged to say, okay, you guys can fight from here, but we're not gonna fight Israel. So, and they didn't realize that these guys were gonna, first thing they're gonna do is try to take over. Place. So the imbalance came not from within, but came from a huge number of armed Palestinians in Lebanon that disrupted the balance and caused immediately as a reaction the Christians to go and get on. What's the role of the Phoenicians in your thought? Well, I mean, there's a recent saying circulating that the Phoenicians didn't exist. And which is not true, I think. No, I mean, visibly, of course, they didn't call themselves Phoenician, but Canaanites, just like the Greeks didn't exist. Then you had some kind of confederation. You had occasional confederations among them, among the states, the small little city-states with their hinterland. And then we know that they genetically, the Phoenicians, seem to have come from Anatolia, largely. And they're, uh, you know, Anatolia is the same place the Greek came from. So there is a connection that was just discovered a year ago, and maybe in 5 years from now we'll have a clearer view of rewriting history based on ancient DNA. And, but now we've understood people— why was it that Phoenicians really sort of like had some kind of great working relationship with the Greeks. Looks like they were similar, maybe the same. They had the same grandparents, this way. And also there's some mysterious thing. Why is it that the only people who were in Athens who were not metics, foreigners— the metic is basically H-1B, you can't vote— so the only ones who were not metics were the people from Sidon. And so there's some kind of— so this is why I like to call these people Greek or Phoenician, modern version of the Phoenicians, Greek or Phoenicians. And of course now we know from DNA that the DNA of the past 3,700 years hasn't changed much of the local population to the ancient one.

I was talking with Eric Weinstein recently and I suggested the following to him, that the way I read your work, on one hand it was trying to explain what happened to Lebanon and so forth, very regional concern, but you were also trying to put forward a vision of what an alternative Lebanese history would look like, a Phoenician one. And that positive program was the underdiscussed part of understanding your work, that you're trying to lay out how Lebanon could be seen or could be a Phoenician culture in the future.

It is not— no, yeah, it is an Eastern Mediterranean culture, and I have It is very easy to convince people it's an Eastern Mediterranean culture in Lebanon despite the textbooks writing the opposite. Let me tell you what really happened. In 1860, the Christians in Lebanon did not write in Arabic. They wrote in a character called Gershuni. The American University, they came in and tried to recruit Muslims. It didn't work. At the time it was called Syrian Protestant College, and they couldn't convert Muslims, so they decided to convert Christians. And they translated— the first translation of the New Testament, or actually the Bible, the whole thing, into Arabic, they thought was done by a surgeon, a Boston surgeon called Van Dyck. In fact, something— an attempt had been done 500 years earlier and failed. So this Arabization that started in the 1860s in Lebanon when the Turks were around is in fact what has— is a distortion of history, of perception, of habits. He's trying to bring that part of the world away from the Ottoman Empire, which was a Balkan Eastern Mediterranean world in which the place had been, you know, spent 500 years, and then before that, 1,000 years under Greek or Romans. So trying to move it closer to Arabia, and people bought the narrative because the Christians wanted to be non-Muslim yet have the same rights. So they invented themselves some genetic story that they came from Yemen. They came from a tribe called the Banu Gassan. So the Christians invent themselves some kind of story. Yeah, the Phoenicians were here, but the Arabs kicked them out. And we, the Christians, come from— and it's totally about genetic focus, that the population hasn't moved, and effectively it's the same people. And I see that you have Charles Korn. Charles Korn with the opposite narrative, the Western narrative, that we are Greek or Roman. We had the School of Beirut, the religious School of Beirut, that for 500 years made or break laws. It's the only place where laws were made in the Roman Empire. We are a Greco-Roman bicultural. Let's go back to the Greco-Roman world, away from 150 years of Arabization. And if you look at— if you go to Lebanon, you realize that 150 years of Arabizing the peasants has had no effect.

You're Greek Orthodox by background, and if I were to ask, how do the Maronites fit into your schema? So there's a long-standing tension between these groups. It seems to me often that the Greek Orthodox would actually side with the Muslims wanting a more stable Lebanon, suspicious of the Crusades, suspicious of the United States.

Okay, so what's your take on this? I'm glad you asked me, I mean, because finally someone really understood the problem. As they say, I'd rather have the tiara of the, say, the sultans, you know, when a lot of people, a lot of factions in Constantinople in the 1400s, you know, the Turks were already in the area surrounding Constantinople for 250 years before it fell. And it was just a poor country before. I mean, it was a poor country, there was a battle, but it was not— so, and a lot of the— initially, the Turks came in as a Byzantine Empire, and they were very upset at the Russians when they called themselves Caesars. What do you mean Caesar? We are, you know, the Sultan is the continuation of the Byzantine Empire. And there was that tension east-west. And this manifests itself through religion. And let me explain what I saw. The coastal Levant was monstrously Hellenized, except for Beirut, which was Latinized because the language of Beirut— I mean, people were horrified to see that they used Latin, and because it was school of law. But the rest was Greek, and the countryside spoke Aramaic. So that's the fact. And if you see the religion schisms they map to Aramaic speakers versus Greek speakers. So the Maronites, the Monothelites, as a first schism. But earlier, of course, you had the, you know, the Nestorians as a schism. And you look at the line of how people had the schism in Asia Minor, and you see that these schisms were entirely driven by ethnicity, sort of like the English and the Protestant versus Irish Catholic. So if the Irish— if the English were Catholic, I bet you that the Irish would be Protestant. At the time. So that's sort of like what happened along these lines. And of course, the Byzantines were very suspicious of the West, I'm saying, and they saw Islam as a— and effectively, it was not really an unrealistic thought, because if you look what happened, there's 500 years under the Ottomans, Serbia is Orthodox, Albania Part of it is Orthodox. Greece stayed Orthodox. Romania Orthodox. These parts are Orthodox. So the idea, when you look at the world, the division East-West and Christianity-non-Christianity, it's thought that at the time there were three blocks. There were the French, those Westerners. There were the East Meds, the Rum, it's called the Rum. And then there were the Easterners, Arabs, Persians. And that was how it was seen. Okay, so this is the— and of course people identify along these lines, and then progressively when you had the heresy, people would go to Rome because the enemy is my enemy. So the Maronites, and Gibbon tells the story beautifully how they came down to Tripoli to do a deal with the Franks, with the crusaders to do a deal with Rome because of, you know, they wanted to move away from that. So the tension is not the tension that is modern there is a tension, the one between the Maronites and the Greek Orthodox, is a tension that has been there forever. Let me give you a really— one more comment, one more comment, that's something since we're talking about it first time, I didn't know you know this stuff, I'm very honored that you're interested in Saint Anne. If you look at what happened also in Lebanon, people fail to understand a few things, that you have historians basically the Syriacs, the Orthodox that are not Chaldeans. You look at these people, the Syriac speakers, who absolutely hated the Greeks, just like the Copts hated the Byzantines. You forget— people forget that before the Arabs conquered the Levant— well, actually, they didn't really conquer the Levant, they just went through the Levant and it's not interesting, olive oil, nothing else. So before they came by, you had two generations of Persians in Lebanon. The Persians came and they brought with them Nestorians. Nestorians are similar to Maronites, different heresy, and they brought with them Zoroastrians, and then they left. The Persians were kicked out by the Byzantines. Those who stayed were Zoroastrians and Nestorians, right? By some mysterious things, you find Zoroastrianism As a Shiite Islam, born in Lebanon and converting to the Persians, the same place where these guys were brought in. And the Shiites were in Lebanon, so it seems to me that the population of Zoroastrians who came, because the Byzantine hated Zoroastrians and non-Cassiodomians, and they stayed, okay, or at least the religion came in, and there's a high, big connection between Zoroastrianism and Shia Islam.

Sure. So let me give you just an early subjective impression I have reading your latest book, Skin in the Game. So there's this longstanding tension with the Maronites, and you also have a very interesting discussion of why, in terms of Christology, Christ must in some way be at least part of man for God to have skin in the game. And I read that almost as your kind of intellectual reconciliation, that the new element for your big vision of what Lebanon sort of could have been and maybe will be that you finally found a way of integrating the Maronites into your basic story that you yourself are willing to accept and indeed embrace.

Okay, yeah, mea culpa, right? So two things about the Maronites. The first one is I was convinced until about 7 years ago that the Maronites were migrants who came to Lebanon from the East because effectively their language Their liturgical language is not Aramaic but Syriac, which is Eastern Aramaic, and the brand that of course came, but it turned out in fact it's only the religion. Their DNA is as local as it can be. Maronites are the descendants of the Phoenicians, so are the Shiites in Lebanon. We Greek Orthodox and the Sunnis have a little more Greek or stuff like that, so that seemed to me, when I realized that, then I realized that they were adopted. So it was already something. So second point, now let's talk about skin in the game. As I was watching, to connect to this, as I was watching Donald Trump debate the other, the guys wearing suits, it was, I knew he was going to win. I was certain he was going to win. I couldn't figure out why I was so convinced he was going to win, at least that stage of the primary. And it turned out, I figured out, I said, yes, people love— and it turned out that I had heard the day before the news that were effectively not that correct, that he lost more than a billion dollars of his own money. So I thought about it, I said, okay, is there anything more human than showing a scar and say, you know, at least I'm real and you guys are just like pencil pushers or whatever, So I thought about it, I said that the skin in the game, exhibiting risk-taking is effectively what makes you, elevates you over the rest. Traditionally you exhibit a scar, or like they have some kind of scar or some kind of sign of incapacitation coming from war. So effectively it didn't hurt Armin. I was a practitioner coming from trading, the trader who lost a lot of money, at least he's real. It's not like a bad thing. So I realized immediately that, and then I thought about it, I couldn't figure out, I had trouble figuring out why is it that the Christian religion, we have that Trinity, which makes absolutely no sense to Muslims and makes no sense to anybody who's not Christian, but it makes so much sense to you if you're Christian, right? So why is it that it makes so much sense to have a Trinity? And then the Christ, is he God? Well, he's sort of like God, but he's not God, right? So you want to figure it out. Then you figure it out. If I go to the circus and I have the fellow walking on a tightrope with a parachute, I'll ask for my money back. You see, that's not how it works. So the Christ was sufficiently man to have skin in the game and sufficiently God to be God.

So it worked.

And for that, we had to concoct a story that appears to be absurd, but it's necessary because it kept coming back to the Trinity no matter what they tried.

Let me try comparing you to another best-selling Lebanese author. Are you the anti-Khalil Gibran? You both have books of sayings. You're both in a sense offering sermons from exile, both moved to America, but he was Maronite. His influences are maybe Baha'i and the Sufis. And you're in a sense doing everything in reverse and rebelling against him. Is that true?

Well, not quite, because when you grow up in Lebanon, you don't have a lot of— I mean, you think that Gibran is kind of new age stuff for Americans. The idea of Gibran is not a serious— plus the other thing is he comes from an area right above my village, like 30 miles away, or no, it's 20, 30 kilometers away, and they invaded us 2 or 3 times. So, tragedy. Versus Ammu'l-Ma'dal, which is Byzantine, the last Byzantine outpost, and they're coming to invade us. So maybe you want to do some psychology on that, but really, Gibran has never been in high standing in my, you know, I mean, a lot of people are in high standing from the Arab, but not Gibran.

Let me try a question a reader emailed to me, and I quote: What advice would you give to the timid and unconfident? Does one seeking conventional employability and respect out of lack of imagination or lack of confidence deserve only contempt?

How does one be in the world meaningfully if you're not awesome?

Awesome. Okay, no, it's the exact opposite. The point is that we are imperfect and the way you can function best is accepting we're imperfect. This is why we have theology. You want perfection, you can find it in theosis, you can find a lot of things. Incidentally, to go back to the idea of being Orthodox, theosis is a way for us Humans to rise above our condition of human, right? That's given to us, openness, it's equal opportunity for everyone. So if you consider that we are imperfect and the way really you can rise is through honor, sense of honor, by doing your easy for self-sacrifice, then you rely— that's kind of the game, is having— taking risks as a— for the sake of becoming more human. That's just like Christ, he took risks and he suffered, of course it was a bad outcome, but you don't have to go that far, so that was the idea. And sort of, I didn't talk about theosis too much, I just mentioned one footnote, but it's sort of like, you understand that the way, that we're not in here to eat mozzarella and go to Tuscany, right? And we're not in here to accumulate money, we're in here to mostly to sacrifice, to, to do something, right? That's— and, and the way you do it by taking risks. Some people take risks and some people labor in the fields, but you have the option of doing either, either one or the other. But my point is, you should never have someone rise in society if he or she is not taking risks for the sake of others. That's one rule. And the second one, you should never be a public intellectual If any statement you make doesn't entail risk-taking, which is, which is a fact, it comes with— in other words, you never should never have rewards without any risk. So that, that's the, the thing. And then you can accept inequality if the person who's unequal is taking risks, because that would make things rotate. For example, if someone becomes a billionaire, okay, it's fine. Unequal, but you got to keep taking risks. Can't be— you cannot be locked into a frozen upper-class condition and, you know, and then use your situation to use the government, you know, to prop you up there. And that's a good thing about America, it's a rotation that you have.

When it comes to childbearing decisions, do men have enough skin in the game?

Well, I mean, I don't know if we can divide things so narrowly because Men have lower life expectancy, so visibly, and have had in history lower life expectancy. I don't know about today in Washington, D.C. if it's not reversed, but they have. And of course you have more criminals among men, but what ratio 10 to 1? In jail, incarceration, so you have a high rate. So maybe not in the bearing of a child, but in doing something else that's dangerous.

Let me ask you another question about religion. Is volatility including exchange rates a big problem?

Volatility including exchange rates. So when it comes to religion, again, I wrote in here, we don't know what the F star star we're talking about when we talk about religion, because people start comparing religion, the thing is ill-defined. There's some religions that are religions, some religions are just bodies of laws, like Judaism and Islam are not religions like Christianity is a religion. The exact opposite. And let me define, explain. The foundation of Judaism was law, right? But it was municipal. I mean, it was for the tribe. It was law, you shall not, so on and so forth. Okay. And then Islam, the same word, dīn, in Arabic means law in Hebrew. Okay. But not in Syria, which is a Semitic language used by Christians, which, okay, where they use two different words. One, nomos, law and one deen for religion. So why is it so? Because Islam and Judaism are laws. It's law. There's no distinction between holy and profane, whereas Christianity is not law. Why is it law? Simple reason. You remember the Christ said, 'What is Caesar's, Caesar's, and what is not Caesar's,' because the Romans had the law. So you're not going to bring the law because they already have the law, and very sophisticated law at that. The Romans. So Christianity was— with Christianity was born the separation of church and state. It's a secular— so it's effectively a secular religion in the sense that when you go home, you do whatever you want. So of course Christianity had hiccups, we had theocracies, a few, but it was all cosmetic. Like for example, when you have the codes, whether Theodosius' code or Justinian's code, you look at it, you see just cosmetically, you say we bless it, By the grace of God, two pages, but the rest, sorry, the rest is intact, the Roman law. So when we talk about religion, so when people are talking about Salafi Islam, it's not a religion in the sense that Mormon Christianity is a religion. It is a body of law. It's a legal system. It's a political system. It's a legal system. So when people, so people are very confused when they talk about religion. The comparing thing, they're not the same. And effectively, when I say that I'm Christian, very different from saying I am whatever, something else. And the same mutates, and I say sometimes it describes ethnicity. Being Greek Orthodox is more ethnicity than something else. And you know, or saying, or being Serbian versus Croatian. So sometimes religion becomes an identity, sometimes it's not, sometimes it's very universal. And so, and sometimes the hidden thing, you have pagan tendencies hidden under some kind of bakia that you see in minorities, in Gnostic religions like Alawites, Druze, other. So comparing religions naively is silly, is verbalistic, and leads to things like saying, well, he has a right to exercise his faith. Some faiths should not have the rights to be exercised, like Salafis or extreme jihadis, because they're not religions, they're an ecosystem. They're like political parties that want to ban all other political parties. If you go with that, you know, you're repeating historical mistakes.

How has the Aramaic language influenced or helped structure your thought?

Zero. I mean, zero. I mean, all right, I picked it up later, but I think— but it's always interesting to discover— I'm doing some philology And I discovered 2 or 3 things when we're not skin in the game. I discovered there are 2 kinds of people, and hopefully we'll talk about it again with Brian. People who come from practice and people who come from theory. And we have, this planet doesn't have a third category of people who have both. So you have linguists who absolutely don't know what the fuck, sorry, what the hell they're talking about. They talk about literature. And so I noticed that in the description of categorization of languages, linguists are not fluent in the languages they're categorizing, and it makes a huge difference. So I think the Levantine is close to Aramaic, but linguists don't accept it because they have their metrics that don't work. But if you use statistical methods, then you realize that it's Aramaic, or if you use practice, you realize that.

I'd like to toss out the names of just a few countries or regions and you tell me whether or not you think they're antifragile. Singapore.

Singapore has size going for it. So you're defining— it's like Singapore, you're talking about a city. It's a city-state.

Isn't it a vulnerable city-state that relies on our protection and we don't always care?

Who's going to— one thing I learned from history, if you only take the Phoenicians, The Phoenicians, they really had an army, or they didn't have an army, or at some point had some army that changed their mind and said it's not economically viable. Why? When you come to invade them, unless you're Nebuchadnezzar, supposedly in history books say that he was very nasty, but then, you know, fact-checking didn't take place, and the genetics actually don't show, but really, it may have happened. A guy comes in, comes in very bloodthirsty, comes to you, and you tell them, listen, what do you want? You kill us all, you get nothing, right? Land is not interesting. What are you going to get? Just, we'll give you 5%, all right? So what do you want, 5% of something or 100% of nothing? So that's what the, how the Phoenicians operated. So someone would come in, I mean, they had a hiccup with Alexander. One town, Tyre, had a hiccup with Alexander. But they had an ego problem on both sides of it. But other than that, we haven't had— so it worked very well as, as a system.

The solution is to conquer the Phoenicians, right? The Phoenicians—

the Phoenicians— no, the solution came in, they say, okay, the system at the time was patronage. You come in, you're a vassal state, and then you say, what, what is it? So anyway, and then you guys are libertarian here, you understand. If I live in New York City, so I have two options. One, pay the state with all of this tax, going to go 50-some percent taxes and you almost get nothing. Or you go to the mafia and you give them 2% and you get protection and you get all the things that you want done. 2%, right? So, so that's exactly what happened. So think about the defense budget if it were run by the mafia, all right? So the guy who would come in— so the system at the time was the system, when you say conquer, the imperial methods everywhere, including the Ottomans, before them the Romans, before them the cell size and the autonomy, and then autonomy had more integration. But the whole technique was very common. Oh, and remember that government role in GDP was at the turn of the century in France 5%. Okay, last century. So having been— you're not part of anything, you're just paying taxes to someone you'll never see. That was the, the, the thing. The integration usually was through commerce. NATO military hummus. And, and so the idea of Singapore— someone invade, let's say Malaysia decides to take over Singapore— what are they going to do with it? They got nothing, right? So it's much better to go to Singapore, tell them we want 2%, all right, or we want 10%, and then they break it down to 3%.

Who is Russia, fragile or antifragile?

I, I did something, I did study on, on countries when we wanted to look at— they're using metrics in this town of predicting stability of countries based on past stability, right, which to me is just absurd. For example, if you take— because the metric would tell you that Saudi Arabia, when writing Black Swan, actually I came here and I told them, said, we have two set of countries, same government for 40 years, 40 governments in 40 years, which country is more stable? Two sets of countries on the right, one on the left. They said the one that has the same government, same families actually. People here in this town at the Woodson Center. So I said, these guys got things backwards. The countries on the right were Syria and Saudi Arabia. That was so far away for a second shoe to drop. And on the other one was Italy, and last time I checked Italy was still standing and Mozzarella was excellent. So the idea of countries that have too much stability become weaker, particularly if it's propped up, sort of like companies. If you take companies, you want to see companies that are robust, look at companies that have zero volatility, repressed volatility. Many of them really shouldn't have zero volatility, but some of them will be sitting on dynamite. You're smoothing to cover things up, right? Or if you have, for example, someone who has employed, who has a very stable salary because he or she is employed as an entry threshold by the— but then you're laid off at age 55 after 30 years of employment, and basically you can't do anything. Whereas someone that has a little volatile income is more adaptive. So when I looked at countries, we looked at countries in the Eastern Bloc. And these countries had effectively the two properties. One, they took a lot of heat during that period. You know, post-Soviet phase was very, very, very, very, very, very rough. And all of them— Armenia, Georgia, Russia, Romania— all of them in fact broke through that phase. So country that— I mean, so this is makes me believe that they can take another economic crisis, any crisis, and survive. They have proved the ability to survive. I'm not sure France can manage tomorrow if they have the same disruption.

Erdoğan's Turkey, fragile or antifragile?

I'm going to Turkey in 2 weeks, so I'd rather answer when I come back. But, okay, but something— but from my feeling that What you see on the Turks are very happy because they got washing machines, they got stuff, and they attributed to Erdoğan. So Erdoğan is associated with growth, not so much with religion.

PLO, fragile or antifragile?

PLO, Palestine Liberation Organization. Yeah, I mean, yeah, they were antifragile, they had nothing to lose. When they were in Lebanon, they had nothing to lose. So this is why they had no skin in the game. That's sort of the idea. Group that had nothing to lose, always— I mean, had nothing to lose, so they engaged in civil war. In Lebanon today, every time someone sneezes in downtown Beirut, people are afraid of civil war, okay? But they don't realize that everyone is down up to here in real estate. So nobody has any interest in waging war. It's not like, say, 1975 or 1973.

What's it like housing 6 Syrian refugees?

They're very nice, they're Sunnis, and they— my mother hates Assad and they love Assad. There's fights between my mother and the Sunnis because they're pro-Assad. And one of them went to Syria to vote for Assad and couldn't come back, just to tell you how devoted he is. So I picked— so what I do is I talk to him to know what's going on. He calls his brothers, siblings, and he's violently— he's Sunni and violently Muslim.

Why?

He said, and he's religious, Sunni. He said, because at least you get this. So for him, Assad represents stability. And effectively for a lot of Syrians. So if you're going to look at Syria from Syria, not Syria from Saudi barbarian financed lobbies here, okay, you get a different story. People want stability. But one thing, one lesson I learned from Syria is that he's complaining. He said, you know, cell phones, I go here in Lebanon, This guy sells it for $200, this guy $220, $240. He says, Syria's perfect. Same price everywhere. So it's a little bit limited. So he's, you know, the boss has indoctrinated people to the point of maybe no return. But I mean, the people understand that Assad is not a god, but I bet you a lot of Iraqis would like Saddam to come back. After what they saw, what they saw. So the idea that they all have regarded the same— the analysis— if you're on the ground, you don't have this theoretical thing. This guy is an asshole. Okay, fine. You gotta realize, like scissors, all right, you look at both sides of scissors, that when you have civil war, you have two different findings.

So you have—

so you take the least asshole becomes someone good in your eyes. But when you analyze only one portion, so the, the, the idea— I mean, Assad grew up His father blew up my house. My grandfather was a member of parliament, 1982, voted for the pro-Israeli Jama'a, and they came in and blew up our house. So I have a hatred for the Assad family. But at the same time, I just realized I have a bigger hatred for the jihadis and for the clients of Obama. So this is how you got to analyze it comparatively, not naively like one-sided.

I have a series of quick questions to ask you about the topic of wisdom. I'll just shoot these out. Feel free to pass if you don't want to address them. First, what is the biggest mistake people make when they go to the gym?

They exercise too much.

What's the best way to find and consume dark chocolate?

I think that's one thing that this is— you're 10 years behind on that. Somehow I lost the taste for chocolate. That the best way to find and console is not those labels, you know, the fancy thing made by farmers, probably made in Brooklyn.

But I'm sorry, but if he were here today, what would you ask Roberto Eco?

Well, you would think of Trump.

What can we learn from Sufism?

How to have a branch of Islam that effectively peaceful, a large ranking, I don't know if you know that, and so that's very convenient. The problem and how, and the problem that it was destroyed by Saudi Arabian funding. That's how purifying, we should revive Sufism. Now what can we learn from them is how any religion can be destroyed without anybody noticing. The number of Sufis, Ottoman Sufis, big people in Lebanon, It was Sufi. Okay, why did it become not Sufi? Because it's funded from Saudi Arabia. You indoctrinate two generations and that's it.

How do you find the right mentors in life?

I don't know, but I know how to find interest mentors.

How do you do that?

People you know that do something wrong and you'll figure out what made them do something wrong. Like there's a fellow I worked with and I knew that he was a complete failure, the last person. I was always doing something wrong. He was always got into details. So I realized that details, you got only one set of details, you cannot get into more than one set of details. So this one thing I learned. And then also like by inverse role models, people you don't want to be like. So you pick someone, you know, you have instinct to know who you don't want to be like. Look at what they've done, what they do, and then you complement it, you do a reverse imitation. And what's the best thing to do on an airplane? Twitter fight. But the problem is nobody fights with me anymore. I tried to fight with a fellow who's, you know, the problem again is that, you know, the problem with the pseudo-experts, okay, that macroeconomists, my worst are macroeconomists because they can macro bullshit more easily than they can micro bullshit. So, because nobody catches you, there's no feedback. So I try to get into fights with macro people and I try to get into a fight with fellow, an Indian fellow who's repeating that story that, yeah, just like that we're refusing expertise at all, like people on that cartoon, they're imitating that cartoon in New Yorker that shows people who decide that they don't need the expertise of the pilot. You cannot compare macroeconomists to a pilot because— so there are two classes of experts. There's belly dancers are experts at belly dancing, or, I mean, the people who steal radios from cars are experts at stealing radios from cars, the dentist expert at dentistry. But I'm not sure macroeconomists know anything about anything. So, so you can't, because there's no feedback. So we don't know. Maybe they or policymakers or people in the State Department. I'm not sure they know anything, all right, because there's no feedback. So that's the— but we definitely know that a carpenter is an expert at carpentry, you see. So I tried to have a Twitter fight with a fellow because usually Twitter fights, number one, makes you look forward, you know, to opening your computer and it kills time like nothing.

Should we put our trust in cryptocurrencies?

I have no idea, but one thing for sure that's working with cryptocurrencies is that it's forcing those fucks here in Federal Reserve, all right, to understand that they don't have monopoly over our lives, all right? So that's one thing, okay? So, and they are scared of it, believe me. So that's one. Sorry if I used Latin.

Does the blockchain worry you? You know, once it's written, you cannot rewrite it or appeal to an external authority.

I mean, that's that.

Or if enough miners in northern China somewhere decided to collude and hit 51%, it seems in some ways a quite non-robust system, maybe under small probabilities.

Okay, the systems get robust typically. I mean, we have had that equivalent of blockchain was a letter of credit. Okay, and we're practicing better credit at two levels. The first one, you know, the recent one since, you know, commerce in 500 years. And of course, over time you find that you debug it. That's so long you don't have a lot of transactions on one single, uh, mode. And then you figure out if it doesn't work, that someone will bring something with the counter, uh, you know, tricks that would have other flaws. But so we program with a with your parents. But if you think earlier, the blockchain would resemble the Phoenician mode of trading. What's the Phoenician mode of trading? Um, I'll call your mother if you don't deliver the merchandise. Right? So the whole idea that the minute— the whole— the concept of a currency that's triggered— in other words, you have now means of payment that are triggered by receipt of merchandise, or coupled with the receipt of merchandise— is a brilliant idea. So this is why, I mean, at some point we will discover the flaws of blockchain. There are plenty of flaws, of course, but we don't know all of them.

Self-driving cars, are they fragile or antifragile?

I mean, I have a self-driving car. I mean, self-driving, semi-self-driving, the Tesla thing. I drive it. The problem is locally it drives so long that we don't know how self-driving cars react to other self-driving cars. It is, you know, the sum— It's like a flocks of birds behave differently from the sum of birds, like markets behave differently from individuals. So when you have a flocks of drones, typically it's one computer running all these drones. If one computer ran all the self-driving cars, that may work, but then, you know, someone would take over the world that way, you know, you hack it and you own the world. So I don't know. I have no idea. I think it's a great idea to have self-driving cars. And if someone in the car is responsible if there's an accident. So in other words, you're— someone is— either someone I can sue or someone I can, you know, blame if something breaks, who is in a vehicle, not sitting on some computer, not some anonymous person.

And should we someday just all collectively turn our back on social media?

No, because social media is Lindy. And let me tell you what Lindy means. That there's things that are robust to time, they're like some basins that are robust to time, and you realize that, for example, this cup of coffee, you know, the— okay, I'm not going to go back to Finnish, so let me start again. Again, again. No, no, okay, the book is 500 years old under this form and maybe several thousand years old in a different form. So the lindybi is that they're robust to time and they come back after they disappear, they tend to come back. Now, it so happened that At no point in history except during the post-war period did people receive news without being conveyors of news. Without that nuclear family of people, pop mom, 2.2 kids, 1 dog, and watching TV, receiving information and not transmitting. The solitude of big city blocks. So that was the idea. Well, that's gone because traditionally you get the news and you convey the news. So you're recipient and a conveyor with a little bit of alteration in the process. So, and then we get back to the social media. So I, and you very quickly learn to identify, like there was a false alert yesterday in Saudi Arabia, there was a coup or something, but you can figure out that There are some people you can trust, others you can't trust. And those you can't trust, you quickly identify them, like those who cry wolf all the time. And so social media is bringing us back to a naturalistic environment. Because say in Athens, where was the news— what was the newsroom? The newsroom was a barber shop. You go in, you give information, and you take information. Or the fish market, you go in, you get fish, you get information, you get information. And funerals, where you go in, you chat, you know, you fake like you cry and then you get all the gossip. So that is, we're gossip machines. So social media is great in that respect. And I love it because I didn't, I don't know if you, I told, I refused to have a book tour. I refused to give media interviews, in the US at least. I did one in London by accident. I don't want to send my book to newspapers. So Random House said, what? I said, okay, find other authors. So okay, they agree, although they cheated, I think, by sending some people the book. So there was no book review in the US, my book, all social media, and it opened number 12 on the bestseller list. It tells you that you don't need the New York Times to exist as an author, that Twitter is sufficient. Twitter and some Facebook.

For our final segment, I have a few questions on what I call the Nassim Nicholas Taleb production function. So you've written a few times that you've described yourself as an ascetic in some ways. How did you become an ascetic early in your life? Ascetic?

A-S-C-E-D-I-C. Yeah, you mean like, uh, up the mountain? Yeah, that's right. So I'm not that ascetic. I'm, uh, It depends on what you're ascetic about. And I discovered, okay, so let me give you an anecdote that's in the book. One day I went with someone for dinner and went, okay, I wanted to go to a tavern now. And they're like, no, no, no, you gotta go to a better restaurant. So I ended up having a meal, which like you have this realized look at meal at a 3-star Michelin restaurant. Where you sit down, you have fawning people, and this is microscopic work. It was like going to work, all right? You concentrate, you're afraid, you're biting too much, and you get all these sophistication for nothing. Then I realized that as people get rich, they get controlled by the preferences, get controlled by the outside. And I would— and it was like, I don't know, $200 a person. And I said, okay, I'd rather pay $200 for a pizza Okay, and would pay $6.95 for the same meal, all right, except that by social pressure, this is how you lose the quality preferences. It's a skin in the game, but you know, little by little you discover that your preferences are people are happier in small quarters. You have neighbors around you in narrow streets. People are happier having meals, and I'd rather eat with someone else a sandwich provided good bread, artisanal bread, than eat at a fancy restaurant. So it's the same thing. Then we discovered little by little that even from a hedonic standpoint, okay, this sophistication in fact is worth it. But aside from that, there is something also that from the beginning you realize that hedonism, that pursuit of pleasure for pleasure's sake, there's something about it that's gives me anxiety, right? So whereas on the other hand, doing something productive, productive in a sense of virtue signaling, is something that I think like that fits a sense of honor, feels good.

So what books influenced you early in life, say before you were 15 years old?

The book I kept rereading is The Desert of the Taqali.

So even before you were 15?

That was before 15, and I read it many times. I'd say before 15, I read Dostoevsky, and again, I mean, I read The Idiot, and there's a scene that maybe at 14 when I read it, is the prince, Mishkin, was giving the story. It was actually, it was autobiographical for Dostoevsky. He said he was gonna be put to death And as they woke him up and were taking him to the execution place, he decided to live the last few minutes of his life with intensity. And he devoured life, it was so pleasurable, and promised himself if he survives to enjoy every minute of life the same way. And he survived. In fact, it was a simulacrum of an execution, "entosfiski," and effectively that says the guy survived. And the lesson was he no longer did that. It was like preferences of the moment. He could carry on late. He forgot about the episode. And that marked me from Dostoevsky when I was a kid, and then I became obsessed with Dostoevsky.

And what was your favorite part of the Bible?

I'm going to be honest. The Bible, I'm afraid, it's too complicated. Too many names in the Bible. Final question.

Yes. What is it that you do in your moments of solitude? Of math, and that pleases you, or that's a form of work that relieves anxiety?

No, no, I only develop anxiety when I go to fancy restaurants, when I don't know something right, but I don't have a— but math is— I like it. People tell me that as people age, they like math less, and math is a young man's game. Yes, it's more enjoyable. So I do math, mostly there's a Twitter math that I'm part of, so there's always something to solve. And usually the beauty of it is that it's totally unpredictable, it takes between 1 minute and 1 day to solve one problem, and you don't know, and then this thing comes in and then I stop.

And based on your own upbringing as a boy, If you were giving advice to someone raising a child up to the age of 18, what would be the takeaway you would offer from your own life experience up to that age?

Become an autodidact. Get a degree from school, but become an autodidact. Don't waste time trying to get an A because you're not going to— we're going to talk about it with Brian— you're not going to remember all that shit, all right? But you always remember what you tried to read by yourself. I remember the stuff I read by myself. Okay, that I was driven. I don't remember stuff was given to me at school. So it's an allocation of time that's— but I discovered that I wanted to be a writer as a kid, so I realized that to have an edge as a writer, you can't really know what people know, all right? You gotta know a lot of stuff that they don't know. So I started reading books like voraciously and effectively, you know, and also read books that with some instinct that would be helpful 20 years from now. So therefore it's not the latest non-fiction bestseller. So I read a lot of stuff and I think that I would recommend to do the same. Read as much as you can and try to get the lowest possible passing grade you can in school. And don't study stuff like history because it's gonna be revised, right? Geography, history, all these boring things like chemistry. Or stuff like that. Math is, I think, probably the only thing you can pick up at school that's useful.

Naseem Nikweskalib, thank you very much. We now welcome to the stage Brian Kaplan of our own George Mason University. Brian and Naseem Nikweskalib will converse. I simply will open it up by handing it over to Brian to start.

Brian.

Thanks a lot. Uh, so actually this whole event started with two tweets by Taleb. My first tweet begins very promisingly: Excellent argument by Bryan Caplan, comma, but missed something central: convexity of trial and error and heuristic learning. I sort of wrote Antifragile using Keely's argument and transcending it. Would love a discussion/debate.

Tyler Cowen.

And then when I said I'd be happy to do this and I was willing to go up to New York, then Nassim wrote back, second tweet, "I will go to DC if you agree to read Antifragile including the appendix." So per our agreement, I have read Antifragile including the appendix. And now I can see several possible central things I missed. All right, but since I've actually got you here, what specifically did you have in mind?

Okay, the first thing I wanted to discuss was something I called the green lumber fallacy. And let me tell you something, describe it. There's a book called What I Learned Losing a Million Dollars, which in fact is the only book I think that's not charlatanic written in finance. Tell you what, how not to lose money, because it's much more robust than how to make money. And the fellow who wrote the book was giving his, uh, you know, knew everything, was trading the Green Lopper, and he knew everything about Green Lopper, how it's made, chemistry, this, the weather pattern, this, everything, right? And there was that fellow in the pit, an old fellow who's very rich, who made his money trading with the Green Lopper, called Seagull, Jeremy Seagull or Joey Seagull or something like that. And that fellow, one day, the narrator who lost all his money, right, that fellow who discovered, didn't know that the green lumber was not lumber painted green, it was freshly cut lumber. So the lesson is that from the outside, it's not like the fellow, uh, Siegel, knew nothing about lumber. He knew a lot of stuff, but not the stuff you're naively inclined to know, right? And that's simply another fallacy. So that's the first thing, an antifragile paradigm revealing, because I was a trader for a long time.

Is that something I missed?

Yeah, because the stuff that they, the point is that they're hidden secrets within a profession, can only be discovered within a profession, not outside the profession. But so that's the introduction. The second one is a convexity. Argument is that in real life we operate not by top-down knowledge and by trial and error. And kind of like to describe the salt experiment— that experiment is if you went and rounded up every single chemist in town on one hand, and, and the other part would be to round up every single overweight person you can find who wears a jacket or sort of well-dressed. So we have two groups of people. And then you want to engineer the best possible recipe. Uh, what's your favorite dish?

Fettuccine Alfredo.

Alfredo. The chemist would have to work out the equations. I mean, you got so many chemists here at NIH and all that sort of— you got a lot of chemists. So you have 500, 600 chemists working on equations only. And the other people, the fat 12 rest people, will be It was the following: you take an existing recipe, you randomize, okay? If you have an improvement in a taste, you add something, right, to the recipe. If you have an improvement, you keep it, you ratchet up. And if you have a degradation, you just give the food to the chemists who won't notice the difference, okay? And that's— so one, in one hand, you've got to ratchet up by trial and error, convex trial and error. Because the errors don't cost you anything. It's like an option. You have optionality on what to keep or not to keep. Optionality. And then the other one is a top-down thing. Now, the difference between them is optionality. Well, that's okay. Who's going to win? Who's going to get, get you a benefit machine at the end of the day?

All right, so I feel pretty good because that's close to my first guess about what you had in mind.

Exactly.

Yes, yes, yes. Anyway, so my first guess was actually you agree the traditional academic curriculum isn't very useful and learning by doing is, which are two things I said, and then I missed the chance to explain why learning by doing works so well. That sounds—

I'm not blaming you, really. It's to use your argument for society to improve by maybe changing the way we teach people, okay? And also put some historical background since we have Tyler here, for, you know, to put some Greco-Roman stuff around it, okay? Because The Romans despised theory and the Greeks despised practice, which is why the first Black Swan is to Mandelbrot, a Greek among Romans, and the next one is dedicated to Ron Paul, a Roman among Greeks. So I understand that the engine behind everything is complexity. The chapter— I think it was a comment I made— was I'd rather be antifragile than smart instead of strong because if you're— And you can model this like I did at Monte Carlo by showing population of people who actually are stupid but not very stupid. Okay? But they do a lot of trial and error., and people are very smart like the chemists, but they don't knock on— they can't do a lot of trial and error. And then you realize that those who do trial and error, if they have the intelligence to realize that what they got is slightly better than the previous thing, would get far ahead. You need 1,000 IQ points to match someone who's aggressively doing trial and error. That was, that was the idea. And then teaching people that, okay, is impossible unless you have practice. And so, so, so the route I was suggesting, education, is you send people— you make people work as nurses and then they go to medical school. And effectively, I spoke to a lot of doctors and they think it's a good idea because they're afraid of medicine being now too theorized, becoming too theorized. You make people run a mafia, small mafia local, or, or whatever you want, a racketeering shop or a casino or something like that 7, 8 years, and then you go study economics and stuff like that. So, so the, the, we're living longer, so this idea of front-loading education makes no sense.

So, you know, just reminding you, so there are plenty of countries where you don't have to get an undergraduate degree to go to medical school, right? In the US, first you do an undergraduate degree, then you go to medical school. Sounds like you were saying better to be a practitioner for 4 years and then maybe go to medical school and just skip being an undergraduate.

Uh, start undergraduate later in life, age 30, something. Think about that model. I know because I started trading, right? I had no idea. First of all, I didn't like school. I like to read books, and my mind— I had ADD, so it was boring for me. So I started trading, and then I discovered math. I said, oh, this is interesting, right? So I started discovering math, so I got immersed into math, and 15 years later I went back to school.

Right?

So the, the, the, the— so I went back to try to do math, and in fact we did off-campus classes, and I did my thesis, and that was it. But the, the idea— and I started writing papers. So the, the idea of having to start by theory and ending up with practice doesn't work. You should try practice, then theory. That's the wrong way.

So now, what do you think about people who make the following argument, which you Only you can decide whether it's a true black swan argument, but people might put it forward as their version of a black swan argument. So, a lot of people say, well, sure, virtually all of these subjects you're learning in school are useless, but there are positive black swans. Once in your life, an academic subject you studied is going to turn out to be absolutely crucial. Like, you know, like, one example of this, there was a guy who said, well, look, actually French was really important. It was totally worth the time because one time I was at Charles de Gaulle Airport And if I hadn't spoken French, I would have missed my flight. And they're like, well, so you spent 3 years studying French to avoid one missed flight? That seems like a pretty free bet. But anyway, you can imagine someone giving something like that, saying, sure, almost all the subjects are no good, but there's one— you're going to get one positive black swan out of your whole education, and that alone makes it all worth all that effort.

No, the counterargument is vastly more potent. You're spending how many hundreds of hours studying something you're not going to remember later where you could spend that time learning a craft like how to break into safes, all right? I mean, you can learn it, I think, in a lot of time, so that from a payoff— plus, you know, it doesn't mean that the other one won't have an equivalent amount of tail events that are positive. So you're ruling out that the other activities would have a tail event. So there's something— the problem with education now, that it's a business. So like any business, it's a huge-ass business. It's become a racket. So it's very hard now to talk, to argue against education when we know all the empirical data. If you want to have a few minutes to explain it, I don't want to say to convince, but we have all the empirical data that at the individual level education, and that's how I put it in Antifragile, education, it appears that it's good for you because it's gonna— it's a great way to transmit wealth through generations because your children are certain to stay in the middle class if you educate them. It's a great way. But at the level of a country, it doesn't seem to work. And in fact, it's the reverse of anything. The Allison Wolves— you know? And even more interesting is that people think that by educating people, they're actually transmitting knowledge instead of— we think, "Technik"— because places like Germany and Switzerland, these places had very low level of education, formal education, had huge amount of apprenticeship and a huge amount of built-in. So I was with Alison Hoof at a party and were saying that education didn't work. And I was talking to her and I said, what are you guys talking about? How education doesn't work?

What?

Education doesn't work? You mean knowledge doesn't work? No, this is knowledge. This works. And knowledge is what we have in the cocktail party. But education in terms of something formatted to be taught in school doesn't seem to work. So that's his argument and the one he's presenting. Now we're looking at either to go deeper into what's the reason, or the other one is what is the alternative? The alternative, more apprenticeship, isn't it? How are we going to destroy that deep state of education, sort of like that tries to sell you something for a quarter million dollars that's worth nothing, right? Effectively, it's negative because of time you spend there. And why we should have effectively knowledge or education or the academy that's formatted for something more optional and later, later on. What you learn in grad school is definitely something useful for you, no?

Yeah, so what I usually tell people is say, look, the reason why school is great is that there's going to be something you learn there that's going to be invaluable. Say, look, I agree that it makes sense to expose people to a variety of subjects, but it seems like it makes a lot more sense to expose them to 10 or 20 subjects they're actually likely to use than 10 subjects that virtually no one on Earth uses. So rather than saying, let's have— let's make sure everyone studies poetry and art history and a foreign language in America, and everybody, everyone learns a bunch of sports. Instead, like, why not make sure everyone spends a few weeks learning some plumbing, a few weeks learning some electricity, a few weeks going and just learning some customer service? So I say, yeah, you do want to have a diverse menu. You don't want to lock a 12-year-old into a career when he's 12, but still far better to go expose him to a tasting menu of realistic options rather than the tasting menu of pipe dreams, which is what seems to be mostly about.

Yeah, but the root of that, my feeling, particularly in the Anglo-Saxon world, is the desire— what they call a liberal arts education— to aristocraticize themselves. Because, and again, let's talk about the Greco-Roman world. You had the Trivium and Quadrivium, there was absolutely nothing practical about them— rhetoric, grammar, so, so things that the liberal education was what people learned to be in order to become aristocrats and idle upper class, right? And then you had the real professions, how to become a baker, how to become something, that was looked down. And the English, when the upper class, of course, they didn't want to be working class, so they sent kids to learn that stuff. And this is what came to America. So, so education is split in two. You have technical education like law— technical, the professional education— law, medicine, what else? Engineering. Engineering, all right, and all these things. And then you have mathematics. And if you look at historically, the engineers didn't really connect to the other ones because the Roman engineers did not use Euclidean geometry. And we only started using Euclidean geometry late in life after the educational system started including mathematics for these people. Engineers who built cathedrals liked Euclidean geometry, and it was actually more robust. Euclidean geometry gives you these ugly corners, as before, because now they know where the right angle is, whereas before it was more involved, it was rule of thumb, and it was so different. So they had a separation, segregation. So what you want to do is, if it's liberal education that's contaminating the rest, or is it the technical that's contaminating the education? We have expectation of education we should be having. So you say, okay, this is the kind of thing you do, like piano lessons, all right, you know, on weekends, all right, you read the Homer and stuff like that. It's important to become civilized. Stuff you do to be civilized, feel civilized, and be able to have dinner with the vice president of the World Bank, right? These are the things you do. And these are the things you do to get your head in life. So your problem has been an old problem ever since, you know, we've had the, the, the, the Roman Greece, uh, you know, competing.

So what do you say? My most controversial policy proposal is just less. So I— educational austerity, spending less on education. I've noted that when I say— when someone says we need more money for education, The reaction is normally, "Yay, not what specifically you plan to spend the money on." On the other hand, when I say, "Let's spend less on education," the whole reaction is precisely, "What exactly do you propose to cut?" Anyway, so not something that a lot of people are interested in, but reading it through, I get the feeling that you might actually be willing to countenance a draining of the educational swamp through cutting off some of their money.

You bet. I went to India once and I, you know, I have no advice to give anyone, I don't have science, but at some point we have to put out something. So I said, "Better open 1,000 schools than 1 university." I said that, okay? And then sure enough, a year later, I see a headline, Modi in speech saying— and actually I said that to Modi, right? To the So I have no idea what he's saying. He'd rather open 1,000 schools than a single university, right? And the focus on— what's the problem with India? India is that they have a lot of educated people who know sociology. Okay, it's nice, but it's the kind of thing for dinner with the VP at the World Bank or something, right? But if you want to know how to do electricity, how to make batteries or something like that, that's more useful. So And now the trend is effectively to cure that problem of having theoretical education coupled with complete misery with something in the middle, which is the technical schools.

So, I mean, like, a standard critique of Indian elementary education is that it's— that is also terrible. Teachers don't even bother showing up, very little learning going on there. But again, like, you know, like a normal American reaction to say we need to go and get the Indians schools in order so that teachers show up and do their job. And my reaction is more of, given this has gone on for these decades, why don't we cut the spending first and then say maybe you can have some of the money back if you actually start doing your jobs? It's getting— think about— so kind of like—

better, better. Again, teach people, uh, uh, young, very young, to spend 3 or 4 hours doing something. I mean, just like, you know, if you're— how did people learn medicine in the old days? It was a generational thing. And your father is a doctor and you walk around with your father, or maybe mother, you know, a lot of, uh, actually there were a lot of women in the Levant in the health sector, and then you learn, and this, you know, that's a professional state within, within, uh, families, and there are secrets that are transmitted, they don't go to the outside, which unfortunately we don't have because the problem is knowledge and education that is always broad and open, whereas transmission of technical skills are worked by guilds and secrecy like the Freemasonry, to the point that today the Romans had phenomenal concrete that we don't have the recipe.

So I mean, I think, you know, I feel like reading your book, I felt like one thing we had in common is things that we've seen with our own eyes weigh heavily upon both of us. So I mean, to me, like a lot of my extreme negativity about education actually comes not only from remembering my own education, when I go to back-to-school night, when I go to parent-teacher night, and I just think, well, if you were to go and tell these people, "Say, you know, teach your kids to go and learn how to do something," would I trust these people to carry out that order? And my answer is, no way! These are touchy-feely people who do not want to think about anything in terms of practical results. They don't like the idea of there being, like, a test, like, did he learn it or not? Instead, for so many of the teachers I saw, it really is all about the experience and you enjoy the experience. And I'm there saying, no, it's not about just about the experience, about do you know something at the end? Can you do something? Can you show me? And don't say that it can't be measured. If you really knew something, you could come up with a test to measure it.

I think that the idea that, again, if we go back to the ancients, when you were learning a profession, you learn a profession from a professional. You don't learn, it's a skin in the game. And I put in skin in the game what happens to fields where the feedback is peer review, not feedback from reality. So in other words, a carpenter has feedback from his clients or her clients, whereas a macroeconomist has only feedback from Paul Krugman. So it's basically closed, so it's a closed system and they can give themselves Nobels. So there's a— and when you want to learn something, you want to learn. And this is why, I mean, I have a section where for 280 years, uh, there's a fundamental problem with probability that's so obvious that Murray Gell-Mann picked up. Every trader knows, but no, nobody in decision science or no psychologist knows because they're not risk takers, so not connected to reality. So You had to split into these two things. Learn from a professional who has done the stuff. If you want to learn how to become a mafia lord, you learn from mafia lord. You don't go learn from Francis Ford Coppola, right? So you learn from the people who do it, okay? And if you want to— so in the old days, the other stuff, you're supposed to be an autodidact. Under a tutor who supervises what books you're going to read, but there's no— none of this classroom high-security prison environment that we have today, see. So, and, and, and that's a liberal education where you have mentors and you find mentors. It's still— I mean, the English Oxford Cambridge system still had these where you're self-directing your own learning. So, but if you apply to high school, I think what I learned the most was from my years in high school, but not from high school, right? And at some point, this great idea to be a Marxist for a few hours, or a Trotskyist, because it makes you read a lot of interesting books, and you go through these phases. So the, the, let's see, the, the, so we have to reform education to turn people into autodidacts. Plus there's another thing: you cannot possibly trust two classes of people. Let's get a game on about educators who are better at explaining than understanding, because the selected do better, and science journalists who are better at communicating than understanding, because then you end up with things like scientism. No practicing scientist, okay, would rule out skepticism, would tell you that science is settled and stuff like that, but these people have the mindset that science is— scientists are the critical— because they don't know enough science All they know is how to communicate, and that is the problem. So you're learning, you realize that you're not learning from someone who does science, you're learning from someone who transmits science. And I tell you now, I was lucky that I didn't have a good math teacher when I was a kid. I started zooming out because then I would become a mathematician, I'm sure. But I'm self-taught in almost everything that I really like. Teaching the way they teach you mathematics is really to deter you from liking mathematics.

So you probably don't get this a lot, but when I was reading Antifragile, I often kept thinking, my God, he's such an optimist. I can't believe that he thinks the world works this well.

Yeah, no, I'm an optimist. Yeah, yeah, yeah. Yes. But this is a criticism.

But like I said, like when you said, look, you can either learn from peers or reality, I mean, How about the thing that usually happens, which is that you are learning from a person who doesn't even know the subject they are teaching? Which is what I see happening in so many classrooms. You know, like when I see history teachers who know less history than the better students in the class, and these are the teachers. And I said, look, I mean, like, I'd rather that they have someone that, you know, there's someone you're talking about, someone who only knows what they know in books, but at least they know that. So I'd rather have that person teaching the class.

Yeah, what's happening now more and more in education is that how do you become a professor? Get tenure is by writing some kind of garbage about something. So you think— so for example, I was trying to read something about the Republican letters, and it was all on Wikipedia, and all the commentaries was about gender study approach. I don't want the theory, but I wanted the facts, and you can't get the facts. So we end up with a lot of people, in fact, today, this generation, because of the competitive environment and a closed circuit in the humanities, that basically don't know anything about humanities. All they know are the theories du jour about this, this, and the post-colonial approach to this and that. And then, for example, when you start arguing with people who studied about something called Middle Eastern studies, which shouldn't exist as a discipline, but let's assume, they start talking about colonialism. The French spent 21 and a half years in the Levant, right? And as a United Nations mandate, explain to me the colonialism. They say, well, they don't even know the basic facts, because the more you have a ratio of theories and white-worshipisms, you know, and stuff like that, and the Marxists— so someone is good at Marxist interpretation of this and this in the post-gender world, all right, but— and they don't know the facts. So this is why you can't rely on these instructors who teach you the humanities, because you don't get tenure from knowing the facts, you get tenure from inventing some post-structural theory of baking beans and mint sasanian to Persia. That's how you get your tenure. So these guys are ignorant.

In other words, wouldn't it be a big step up if we replaced current academics with equally ivory tower academics who just have a command of the facts?

Yes, but how do you select for these? Well, basically in Europe, for example, They have a separation between researchers and their clients, for example. So instructors are supposed to know the curriculum, and actually they're tested, not, I mean, I guess you know, they're tested on a subject. So, and the people who produce papers go produce papers that nobody reads and put your energy there, and we're gonna give you a good lifestyle and some income that's lower middle class, right, for researching, and leave us alone. So this is how the same— and you get the —and you get some people who instruct, tell you, give you history lessons, know actually some history. You don't have that in a more competitive environment.

So one argument that I made is that almost every student has an intuitive understanding of the signaling model that I'm defending in my book, where I say the main thing you're trying to do is impress employers, not actually learn the material. And here's a passage out from Antifragile that is very signaling-friendly. So quote, I I wasn't exactly an autodidact since I did get degrees. I was rather a barbell autodidact as I studied the exact minimum necessary to pass any exam, overshooting accidentally once in a while and only getting in trouble a few times by undershooting. So would you say that you had an intuitive understanding of the signaling model? Yeah, I know that you have— Getting the stamp on your forehead. Exactly.

I decided to come to Harvard, decided to come to business school in America. Why? They said it was very difficult to get. So I said, okay, let me try. What do you have to do?

You have to take this test. So what do you do?

Best GMAT or something like that scores. So you go in and you spend the day, you, you buy a lot of coffee, you lock yourself up for a month taking these, and then you go take the test, right? And, and first of all, you forget right after once you've taken the test. And you go to business school where you realize that business school is mostly a way to meet people who are going to give you a job, the first job after business school. And everybody will forget You know, that's the face to it. It doesn't count anymore. And then later on, I became an employer when I was employed and never had anybody from business school. No one who was— so signaling— and plus they come and argue. So you hire someone from, uh, for example, you notice there's something is if you went to business school, unless you went to the top 20 at the time, it was a waste of money. But the mathematics, if you know You can go to the top 25,000 school, number 25,000, and still useful, you see. So you realize that there's some things that can be taught in that structured environment, like engineering, mathematics, or chemistry, or, I don't know, belly dancing, or stuff like that. So, but at business school you have no skills, basically. So, so it's a signaling that you discover but I didn't need the signaling beyond my first job.

Right, so we all know you're a maverick, but suppose that you had undershot very consistently in academics, so you hadn't finished your degree. Do you think you would still be where you are today?

No, no, really, this is the problem with society because the way it was organized. First of all, I was Civil War Lebanon, so if it weren't, you know, I had a family with money, I would have been writing bad poetry and that's it, maybe a failed novel or something. So that would have been my life. That was a film, that was a product, the reaction against war, the anxiety, displacement, you know, the moving from— so you have anxiety plus being pushed from the area, you don't know, you know, and it's very scary to be pushed from the area, particularly at the time. So this is why I said I want to make it, so you want to get the degrees, you want to do you're gonna buy a nice suit. So all the signaling, you have to cover the signaling and on top of that have the skills. So, so this is— that was what, what pushed me. And effectively, I am certain that I discovered another thing, that the mathemata mathemata, the fact that I learned from, uh, from Antifragile, uh, sorry, from the last book. I, I have an interest in addiction. I'm not an addict, myself, but, uh, and a family member when I was a kid. So discover how smart addicts are at procuring money for their addiction, but they're incapable of making money outside of that, right? So there's some skills, some kind of gland that comes in and starts producing IQ, all right, when they want their drugs. And then they can find these ways to make money for the drug. Elsewhere. So I started thinking about it, and I explained that when I started trading effectively under the pressure, you're so much in trouble, you have to think. You learn a lot of stuff like probability, right? And you start high-dimensional matrices, we gotta invert it, you know, by tomorrow morning, and you end up inverting it, and then you don't know how you got the result. And you show it to mathematicians, they don't believe you did it. And then you did it, inverting on smoke at the time, computer time. So you push to do a lot of stuff under necessity. Necessity is the mother of invention. And the stuff you do then that you learn under these pressures, you stay with you. It's not like a drug addict who loses back these faculties elsewhere. So that was— I was explaining how basically war was a way for people to learn stuff. And then effectively, a lot of the inventions we had came during war, during, you know, Your work is, and of course, the preparation for work. So, got to replace that model. Of course, we're not going to wage war and figure out how to force people to learn by getting them in trouble. See? And another mode of learning to activate, upregulate something in them that makes them— so definitely not by making them, putting them in a classroom and giving them credentials. It's got to be something else. Plus, there's another thing about you that I disagree with you on one point. Minor, is that you have your metric to gauge if education is good is performance on the job. But, but—

Is it a good metric anyway?

Yeah, it's a good metric for people who want to become employees, but they're not— the world is not, you know, doesn't, you know, needs people who create things. You see, you need the, the artisans or people who invent things. 'Cause I had this idea that the Bill Gates, as much as I hate him, you know, he's the guy who created something, or the Steve Jobs, you know, these are the people who make the engine work and the other people are just around. So for these people, again, I mean, you gotta look at these people as a disproportionate part of the sample, not the numerical same thing. That's where I disagree. And then my idea of IQ, And I remember when one hired a trader, you would not quiz them on something because, you know, they all have probably a very high IQ to get there. First of all, we only hire people from math or physics or engineering, so you have some kind of ability. So they all— you give them an SAT test, they've done it, all right? GREs, they've done it. So what do you get? You start— I mean, the best test is you tell someone, listen, I want a French suit, and you have an hour to get this size, this bottle, this size, and you have an hour to go get it in New York City. For example, that's the kind of test with good people to see if they can go find that suit, right? Or you give them, you give them projects and tell them, I want you to get me this, this, this, and then you have an hour to do it, or 2 hours, all right? And to see how, first of all, how people get confused at your request. And, but these are the real IQ tests.

So that's absolutely tested common sense. Psychologists actually do have a whole separate set of common sense tests which are interesting because common sense is something where people keep improving into their 50s, unlike IQ, where actually at least some kinds are getting worse. Um, anyway, so these tests are actually pretty interesting. I feel like, you know, there's tests like, your car breaks down on a mountain road in the middle of LA on a snowy night, what do you do? And like, smart 18-year-olds give answers that get them killed, whereas like normal 50-year-olds give answers where they survive. And it's like, wow, right? So there is actually something this idea— no, no, there's Yeah, I think of getting the suit as part of the part. A lot of that is actually testing common sense, which is an important but actually a different kind of skill.

But that's the central skill you need then. Yeah, it is more. There's a skill you need is how do you make it through an airport and get me an Auntie Anne. I like Auntie Anne. It's a thing with butter, all right? 25 minutes to get one. And then no internet at a time. It's not going to be such a pleasure. So these are the tests that really will tell you if the person is going to succeed as they start in that profession. What do we do when the car breaks down?

Yeah. That's a good question. The original tests were actually written before there were cell phones. So then it normally involved getting on the other side of the barrier and then walking carefully to a call box. Rather, you know, it's winding mountain roads, so like a lot of people say try to wave down a car, but it's winding mountain roads, so you're gonna get hit by the car. So like get on the other side of the barricade and then very carefully, holding the barricade, walk to the call box and then call for help is a pretty good answer to that. So totally different question. So, you know, so it seems like, you know, you and I are very much on the same page on, you know, value in vocational education. There are a lot of academics who say, no, no, no, no, vocational education is no good because you never know if any vocation is going to be wiped out. So one of the referees said, oh, should we send them to go to typewriter repair school? That's how they act. And no, you shouldn't send them to typewriter repair school. Now, my answer here is, look, it's better to go and train people for things that seem likely to be useful, like plumbing, than to train them for things we know are not going to be useful, like poetry. So if we know anything about the book, Cowen: The Economy in 40 Years, He said poetry will not be a big part of the economy.

So I mean, what do you think about this? Again, there's a separation of things you do to become civilized and things you do to make money later on, and people conflate one for the other. And to come back to reiterate, for the Romans, geometry was not something like poetry. It was something you do as an intellectual exercise that was not required because It actually degrades the way they make, and conflating the two has actually led to a lot of problems. So the first thing we gotta establish is that we have another bigger problem. The bigger problem is of course, where is the propaganda that we're getting? It looks like the ratio of theories and what do you call it, indoctrination to facts is very high in humanities. And effectively it stays low in mathematics because you can't really have— although, you know, we have proposals to have, you know, to remove square root of minus 1 because it was too phallic or something. I think it was in Sócrates' books, but it was mathematics stuff like that. So you separate these two by institutions that are completely insulated from one another. The things you do to become civilized, like knowing the history of Scotland, and things you do for skills. If we bring that back, computer science, accounting— I tell you, in business school, I know there's two classes that were useful for me: law, business law, and accounting. But then these, I didn't need business school for them. You can go get it from— so, and actually, I'm doing something on the side as risk— people who are in the risk business myself and a former Renaissance partner, uh, the, the train, and then a third person. The three of us are mathematically inclined mathematicians, the three of us, and we're teaching people risk from risk, uh, takeaway standpoint. And the demand is huge, okay? But people who want to learn from professionals— so you may have a model of accountant teaching accountant This person teaching that one has certificates that you can get throughout your life rather than have a blocked education and then you go to the job market. So to me, like the risk business, I treat it like plumbing. It's like being a plumber. It has a lot of stuff. You can only learn to be a plumber from a plumber. You can't have an English teacher also teach you plumbing, you see. So these professions should be insulated from the humanities, the things you do to become civilized. But it doesn't mean that we should eliminate poetry from school. People should do that like you do piano, they take piano lessons.

If I could just interject with a question, I'd like a sentence from each of you on what you see as the biggest difference between you, because you agree on a lot. But let me give you my one-sentence take on what I've heard is the biggest difference. The extent to which you take a kind of shaped civilization for granted is different. So Brian, you take it for granted. You don't think formal education is so much needed to produce it. And Nassim, you're taking it less for granted in a particular way, and you still see some room for poetry, the humanities, and so on, provided they're treated the proper way and segregated from the actual doing of stuff. Exactly. Each of you give your take. That was my takeaway.

That's exactly my take. I want to separate things you do to be civilized, the liberal arts, from things you do to be effective. And this is why, I mean, I do a lot of mathematics, but I know the mathematics I do purely for pleasure, not for anything practical. And of course I do other technical stuff that are very practical, statistics, stuff like that, and some mathematics, applied math. But when I play with geometry, absolutely no practical thing, and I do it like I would with poetry. But so long as you separate these two, you have a barbell— this is this and this is that and that's that— and you separate the two of them then you will avoid the problems we have. And also, you should have the professional stuff, okay, taught to children a lot by professionals of that field. And you should have the humanities or stuff taught by people who like that stuff.

Yeah, and I would say, you know, so I don't take civilization for granted at all. What I say is that it can't possibly be the case that the— that education in liberal arts and humanities is causing civilization or sustaining it. Because virtually no one acquires this knowledge. So given that almost no adult can answer even basic questions about this stuff, I don't see how you can say that schools are saving civilization because they aren't achieving the goal that allegedly is required to sustain it.

I actually agree with him. I think that schools— at one point they destroyed civilization. They destroyed civilization, the classics. I think we should separate the holy and the profane. And then you should keep things in the holies and the profane. And I think that they destroyed the Latin language as well as the Catholic Church. One comment again from theology, when they translated the text from Latin or from Vulgar Latin into vernaculars, okay, because then what do you do? You try to market now religion as something useful, whereas before it was something wholly its own thing. And you notice that the reason that Paul presented, he said that it's to make, increase the number of Catholics, right? In fact, the church contracted at the time, but don't compare it to Islam where you have 1.5 billion Muslims praying and they actually don't understand, so visibly. So you have exactly the same thing that had separated the Holy profane. Don't make— don't translate the vernacular, the beautiful Latin things. Likewise, do not try to make poetry or literature or history— do not make it practical. Just make that people study it for their own sake, just like you go to church. It's not for anything practical. You don't go to church because you're going to meet an employer. You go to church to go to church, all right? And likewise, so he has to separate these two Closing statements from you, Brian.

So I've just got one question left. I really desperately want to signal that I did read the appendix, so I have a question about the appendix.

Yes, best question and answer.

All right, yes. So you wrote it is often easier to modify f than to get better knowledge of x. Now when I was reading this, you know, it seems like even the phrasing suggests that we should be weighing the relative ease of modifying f and learning about an x case by case. So suppose we're talking about the possibility that something on your— that one day you're going to eat something lethally poisoned. All right, now one thing you could do is take a lot of precautions against using poison. You could hire a poison taster, or you could go and read up about what kinds of foods are hard to poison. On the other hand, you could just go and say, "Hardly anyone today gets poisoned by, uh, you know, this— would leave a poison mark on their food, so low probability and I'm not worried about it." The latter reaction is actually my reaction. Am I wrong? Uh, yeah.

Should I be worried about being legally poisoned or not? Uh, let me rephrase the f and x, and then you'll see that it was right and wrong. So what I say is that there's a fundamental problem I noticed in probability and statistics is that people— you take X, X is what will stock market do tomorrow, and you study the properties of X instead of study f, how it affects you. You can have a payoff, you change the payoff, and, and so X is knowledge, which is exactly the left side. That is one thing, but don't confuse conflate the conflation of X, how it affects you, f. So for example, if you take random events, if f is convex, you have optionality. You see, some people have optionality from random events, some people have negative optionality. It's technical, but, uh, you know, we don't have time to explain it. But the gist of the point is one of them is knowledge, the other one is how it affects you, what you do with it, you can change it. Like for example, one of them is what would happen if there's war And the second one is the insurance contract, FMX, where insurance company puts a clause, close my— so it doesn't affect them anymore, put it in a clause. So one of them needs a statistician, the second one is a lawyer. A contract— so you mitigate your risk either by understanding the risk, which is very hard, or by having a lawyer who puts a clause to protect you from that event if it happens. That's FMX. So the idea is that there's a conflation between the two. I'm not saying that we should ignore X or ignore f. I'm saying that we should know whether you're dealing with X or f, whether are we dealing with the food composition or are we dealing how it affects us. So that's the f. So this is how— this is my answer. And put it in context of poetry is X, whatever it is. f is how it affects us. f is the techne and X is the episteme. And the ancient always separated episteme from techne. The problem is As society got rich, everybody wanted to reach education by imitating the aristocrats with the illusion that's going to help them get rich, whereas in fact it's the kind of thing you do when you're already rich. And this is where, uh, where Alison Holf and Richard come in to discover that these educational things are effectively the product of societies that are rich and definitely not causative to wealth. Thank you both very much.

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