Tag Archives: black swans

Capitalism 2.0

plant_curveFlaneur and creator of the black swan theory Nassim Nicholas Taleb has written an engaging article for Edge describing the principles of what he calls Capitalism 2.0:

1. What is fragile should break early while it is still small. Nothing should ever become too big to fail. Evolution in economic life helps those with the maximum amount of hidden risks – and hence the most fragile – become the biggest.

2. No socialisation of losses and privatisation of gains. Whatever may need to be bailed out should be nationalised; whatever does not need a bail-out should be free, small and risk-bearing. We have managed to combine the worst of capitalism and socialism. In France in the 1980s, the socialists took over the banks. In the US in the 2000s, the banks took over the government. This is surreal.

Taleb’s highly bombastic style may not be to everyone’s liking but I rather enjoy the iconoclastic tone of both The Black Swan and Fooled by Randomness. Both are highly recommended – especially as they have direct relevance to thinking about the near future.

[image from James Jordan on flickr]