Typical Taleb

Op-ed in FT from Nassim Nicholas Taleb on how to avoid Black Swans. One of his points that is really revolutionary

Citizens should not depend on financial assets or fallible “expert” advice for their retirement. Economic life should be definancialised. We should learn not to use markets as storehouses of value: they do not harbour the certainties that normal citizens require. Citizens should experience anxiety about their own businesses (which they control), not their investments (which they do not control).

This is the an extraordinary piece of advice. He essentially seems to be saying that people should completely stop investing in the equity markets, even debt which chases for yields is verboten. Somehow this does not strike as being very sensible. People get accustomed to a lifestyle and they chase returns so that when they retire they are able to live a meaningful life. In a world of scarce resources, how those resources will be allocated depends on the price that it’s users are willing to pay. However harsh it may sound, a richer/high status person will always get better treatment in most aspects of life than someone lower down the totem pole.

Everyone implicitly understands this and tries to maximise their usage of resources by trying to garner as much as possible in every way possible. A more nuanced and meaningful solution is needed to the question of providing for the future.


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