3 years


The Man Who Knew Uncertainty

Madhavankutty Pillai has no specialisations whatsoever. He is among the last of the generalists. And also Open chief of bureau, Mumbai  
Page 1 of 1

And the uncertain things that happen when you meet Nassim Nicholas Taleb, author of The Black Swan

Nassim Nicholas Taleb told me he would be down in the lobby in eight minutes. It was unusual to have such a precise number thrown at you, but then this was a man whose time was important—I had read that he charged $60,000 for speaking engagements (and gave most of it to charity). I was getting 30 minutes absolutely free.

He came down, shook my hand and we settled into seats by the poolside. Here was one of the thinkers of the modern world, and he was here with me to promote his new book, The Bed of Procrustes, soon to be released in India. His earlier work, The Black Swan (2007), had been a runaway bestseller and given him rock star status in the world of money. A Black Swan is a highly unexpected event that is vastly influential, so called because for centuries everyone thought swans were only white until a black one was spotted after Australia’s colonisation.

Nothing is certain, and Taleb preaches the Gospel of uncertainty. His essential argument is that momentous events happen out of the blue, especially those that change the course of the world (such as 9/11). This is all the more so in modern times because everything is interconnected at a level never seen before. Individuals and societies, however, only factor in certainties, and continue to pay the price for it. Since you cannot predict Black Swans, it is best to guard against them and exploit the positive ones.

But Taleb is not an armchair philosopher. He actually put his money where his thoughts were as a stockmarket trader in the 1980s. On 19 October 1987, at the age of 27, when world markets took their deepest one-day percentage dive ever, he made millions out of it. According to a Bloomberg report, he bet that eurodollar asset values would go in a direction few traders expected—drastically down—and his ‘options’ to encash it came good; as for what happens to those who ignore Black Swans, many traders went bust in that crash because it just didn’t occur to them that such a random event could happen. That single day gave him his ‘Fuck you money’, a corpus granting him the financial independence to do what he wanted—be a thinker at leisure while dabbling in finance on his own terms.

In the early 2000s, Taleb started saying that bankers were going to ruin the world. And when US investment banks went belly-up in 2008, he had made another packet by helping float a hedge fund that anticipated the crash.

Sitting here in Mumbai, though, he did not look all that rich. He had a French beard and slightly deepset, ponderous eyes. You could even call him meditative if not for an aura of impatience.

I didn’t have a clue about his new book except that it was on aphorisms. It had not been released in India yet. I began by asking him why he had chosen to write aphorisms. He replied that he had been in his uncle’s library in Lebanon where he came across Voltaire’s complete works in 74 volumes. (He had once written that he spent some of the Lebanese civil war that ravaged the country stuck in a basement, reading books). “Of the 74 volumes, only one has really survived. And the one he least expected to survive,” he said, “Voltaire started life as an author of tragedy. He ended up as the wealthiest man in Europe by leveraging the money he made from tragedies to other things.”  It was not clear to me why that would make him write the book. So I asked the same question again. “It’s the same idea as Voltaire’s,” he replied. “But how did I get myself the idea? The aphorisms came naturally to me. I didn’t write them, they wrote themselves.”

I told him that I had read some of his aphorisms on his website, and it looked like he’s talking about a way of life. “Yes, exactly,” he said. “I have two roots. One is Eastern Mediterranean, ancient classical, pre-Christian Levantine thought [Taleb is of Lebanese descent]. In various writings of that period, and of later Roman authors, you see a way of life in which it’s not your actions that matter, it’s what you are. You don’t do good in return for anything, you do good because you are good. That’s part of your essence.” The second root evokes a return to a paleo lifestyle, to pre-agrarian times when human responses were calibrated to their environment. “Initially, human culture developed a sense of heroism. Technology is moving us to Nerdistan. There are four pillars of my ethics: courage, generosity, erudition and elegance. Versus a modern world based on nerdiness, phoniness and philistinism. And warped ethics, like a lot of people want to have a job, and their job determines their system of ethics, rather than their ethics determining what job they have. It’s like a [Procrustean] tailor who’ll do surgery on you to fit the suit, rather than change the suit to fit the man. I hate modernism.”

Here too, Taleb lives his idea. For example, his fitness regime is part of his paleo lifestyle. He takes long walks, sprints once in a while and works out “no more than four times a month”. But he does it intensely. He wrote about how he arrived at this routine in a paper: ‘Long, very long, slow meditative (or conversational) walks in a stimulating urban setting, but with occasional (and random) very short sprints, making myself angry imagining I were chasing the bankster Robert Rubin with a big stick trying to catch him to bring him to human justice…I went to the weight lifting rooms in a random way for a completely stochastic workout …these were very, very rare, but highly consequential weight lifting periods, after a day of semi starvation, leaving me completely exhausted, then I would be totally sedentary for weeks and hang around cafés. Even the duration of the workouts remained random…Then, after two and a half years of such an apparently ‘unhealthy’ regimen, I saw serious changes in my own physique on every possible criterion—the absence of unnecessary adipose tissue, the blood pressure of a 21 year old, etc. I also have a clearer, much more acute mind.’

In my next question, I quoted one of the two aphorisms I had come armed with: ‘Work destroys your soul by stealthily invading your brain during the hours not officially spent working. Be selective about professions.’ I asked whether he was making any recommendation on professions to choose. “Of professions that corrupt your soul massively… [the first] is academia. That’s No 1. Second is banking, finance, etcetera—economic stuff like that warps your soul. If I have to do something Monday morning, it stays with you today [we were talking on Friday]. When I walk, I don’t think of anything. I come back and sit down and fill up a whole page of work. So my brain works on its own when it’s totally unimpeded by all this grind and these duties. Just like hunter gatherers. We were [once] driven by natural impulses.”

He then told me that he hoped the interview would be over in five minutes. I haggled to make it ten. I pulled the next aphorism out: ‘Those who think religion is about ‘belief’ don’t understand religion and don’t understand belief.’ I asked him what it meant. For a man who had arrived at an understanding of the world in clear objective fashion, he, oddly enough, was a practising Orthodox Christian (in his own description). “It’s not about belief,” he replied. Since that was just a repetition of what I had said, I asked him what it was about then. “The notion of belief is irrelevant. It’s metaphorical. Like yesterday, I ate dinner here and most of my bill was for liquor, a few glasses of wine. So restaurants get you in for food, but make their money on liquor. So, religion gets you in with belief, but it’s there to make you behave in a certain way. I don’t believe in belief, belief is irrelevant. It’s action that matters.”
I still didn’t get it. “Why would you need it then?” I said.

“Of course you need religion,” he said. “You need it for action.” I was still perplexed, but the minutes were ticking and we switched to the Great Recession. I asked him whether he expected the scale of it. “The scale, yes, not the timing. I was expecting it since 2003. As it took long to happen, I expected the depth of it to be a lot worse,” he said. I then told him how we had an event of our own with Satyam Computers going bust, and asked him how one could protect against it. Instead of an answer, I got hit with a Black Swan. “This is a bad question,” he said. “I wrote a whole addition to The Black Swan on robustness and fragility. It’s always bad for an author having to answer things verbally that are in a book.”

I asked him about his work on Climate Change, and he gave me the same answer. It dawned on me that he was most happy taking questions on aphorisms, and I had run out of my stock of two.

I asked him about his fitness regime, he pointed me to his book. I asked him about factoring uncertainties into his life. He said it was a bad question. “These things are there in the book. It’s very rude for an author to [have to] answer, it’s a sign of weakness. If I answer it, it means I am writing bad books.”

We had arrived at an impasse. I had no good questions for him, and all his answers referred me to his book. He suggested we go back to his room to take photos. I accepted it with alacrity. On the way, he offered an explanation: “I am afraid of answering questions on The Black Swan because it requires energy.”

Before departing, out of the blue, he reverted to my question on fitness. “Do minimum exercise, but intense. The best exercise you do is when you lounge. When muscles grow. Do intense exercise and then lounge.” It was a random note to bid goodbye on, but then that’s how the world is.