Nassim Nicholas Taleb, celebrated author of the Black
Swan: The Impact of The Highly Improbable and, before
that, Fooled By Randomness: The Hidden Role of Chance in
Life and in the Markets, has got a new book out.
Like its predecessors, The Bed of Procrustes:
Philosophical and Practical Aphorisms, will resonate
strongly with risk practitioners in the insurance and
Perhaps more importantly, this time Taleb’s
philosophy is served up in bite sized chunks, so we could all
get around to reading it. (Be honest, you haven’t
read it, but how many times have you cited the Black Swan
yourself, or nodded sagely when someone else dropped it in to
Taleb has a healthy disregard for financial services people
and the journalists that write about finance, describing them
variously as imbeciles, empty suits and philistines. But this
new work wasn’t written as a collection of
aphorisms simply to help unimaginative dunces like us "get
Taleb says he is also rescuing the aphorism from the
triteness with which it has become associated – the
sort that is woven and framed on the wall of that
Bed & Breakfast in Brighton perhaps?
Aphorisms, proverbs, short sayings and epigrams are the
earliest literary form – often integrated in poetry,
he says. "They carry the cognitive compactness of the sound
bite (though both more potent and more elegant than
today’s down-market version), with some show of
bravado in the ability of the author to compress powerful ideas
in a handful of words - particularly in an oral format."
By the way he defines a nerd as someone who asks for an
explanation of an aphorism.
The standalone, compressed thoughts collected in his
Procrustes book should not need explanation. They "revolve"
around Taleb’s main idea of how we deal, and
should deal with what we don’t know – the
ideas more deeply discussed in his earlier books. And,
importantly, the same ideas that have enabled him to amass a
fortune from trading and risk taking: he’s no dime
Back to the book.
Why Procrustes? In Greek mythology Procrustes was the cruel
owner of an estate near Athens. He would abduct travellers,
give them a good feed and then invite them to stay in a special
bed he had reserved for them. He wanted the bed to fit them to
perfection, so if they were too tall he chopped their legs off
to fit; if they were too short he stretched them on a rack.
(And you thought the B&B in Brighton was bad!)
Every aphorism in the book is about a procrustean bed of
sorts, he says in the book’s preface. "We humans,
facing limits of knowledge, and things we do not observe, the
unseen and the unknown, resolve the tension by squeezing life
and the world into crisp commoditized ideas, reductive
categories, specific vocabularies, and prepackaged narratives,
which, on the occasion, has explosive consequences."
So much of what he says could be aimed directly at the
insurance underwriter, the broker, the modeler, the investor,
the corporate risk manager, and the chief executive.
In fact, try attributing each of these examples to any of
the aforementioned people above:
To bankrupt a fool, give him information.
In science you need to understand the world; in business
you need others to misunderstand it.
An erudite is someone who displays less than he knows; a
journalist and consultant, the opposite; most others fall
somewhere in between.
It is as difficult to avoid bugging others with advice
on how to exercise and other health matters as it is to stick
to an exercise schedule.
Randomness is indistinguishable from complicated,
undetected, and undetectable order; but order itself is
undistinguishable from artful randomness.