[ad_1]
Wimbledon is established for the first time since World War II. But, unlike many others, the British Tennis Association is not concerned. 17 years ago, the legendary pandemic tennis tournament was insured. £ 34 million is said to have cost them over the years. The French Open Championship did not have similar insurance. Now the French Open Championship is threatened with ruin. At the same time, Wimbledon will receive a check from their insurance company of between £ 100 and £ 200 million.
Wimbledon has consciously or unconsciously followed a risk philosophy formulated by Nassim Taleb.
It turned out to be smart.
Serena Williams during Wimbledon 2019.
Photo: Ben Stansall / AFP
Nassim Taleb is the statistician and the risk analyst who became a philosopher and almost any type of mystic armed with mathematics. In 2007, his book “The Black Swan” sold 4 million copies. The book tells the story of how Europeans were convinced that all swans were white. Then they discovered Australia. There were black swans. The observation of a single black bird came to our conclusions in a moment about the color that the swans might have invalidated. This despite the conclusion that “all swans are white” was based on millions of observations.
All that was required was a single black swan.
Then everything changed.
A “black swan” is something that we cannot foresee, something that is outside our idea of what “can happen”. Two planes flying to the Word Trade Center in New York or a First World War that breaks out after someone named Fernando was shot dead at a crossroads in Bosnia. It is the black swans that affect us the most. What you have the ability to expect, you can take action against.
Everything else is the problem.
Black swans in China.
Photo: Xinhua / Mei Yongcun / Sipa USA
Many in the financial markets have started talking about covid-19 as a black swan in recent weeks. They have collected the book of Nassim Taleb. Journalists have sent him thousands of interview requests. Nassim Taleb could not be more dissatisfied with this. It has an algorithm that removes emails from all the journalists you don’t know.
– Of course, this is not a black swan, he says by phone. Conversely. For a long time I was surprised that we have not had a global pandemic before.
The key is in his book “The Black Swan”. On page 207, Nassim Taleb writes about what he calls “naive globalization”. If a bank collapsed in the past, it could not carry the entire world economy with it. If a new virus emerged among a dead animal in a Chinese market, it could not close the world three months later. Globalization has the capacity to create completely devastating black swans.
Photo: REX
– I myself am the definition of a cosmopolitan without roots and I love it. But if we do not deal with the side effects of globalization, we will have problems. And that’s what happened.
At the same time, this is not a “black swan”. The question in a globalized world was never whether we would end up in a situation like the present, but when we would end up in a situation like the present.
– People do not understand that pandemics are a different type of risk than car accidents.
Auto accidents do not infect and cannot grow out of control. However, for example, Tesla CEO Elon Musk compared the probability of dying in covid-19 with the probability of dying in a car accident. Nassim Taleb’s point is that you can’t think that way.
Absolutely.
Me and the others who work with me to model this type of risk came out with a warning on January 26.
– Me and the others who work with me to model this type of risk came out with a warning on January 26, he says. We asked people to reduce mobility between countries and introduce controls. Nothing happened. The financial bill for doing something about the pandemic in January had been $ million. Today it is in the trillion dollars. At least.
In other words, it is not the reaction of our leaders to the virus that has ruined the world economy. It is their lack of response quickly enough that has destroyed the world economy, according to Nassim Taleb.
“It’s better to panic before panicking late,” he says.
– Doing things well in these types of situations is politically expensive. Let’s say you closed the borders of your country and then nothing happened. Then you will be charged with measures that cost the economy a lot. Politicians don’t do the right thing, they do it where they risk being criticized later.
Decision makers went and waited for evidence of whether the masks helped against infection, but you shouldn’t expect evidence in this situation, you just should.
One of the principles of Nassim Taleb. Time and again, pressing on your books is that the less you know about something that could be a major threat, the more cautious you need to be. If you suspected that the pilot was full, you would not enter the helicopter expecting “scientific evidence” because it was really full. You simply wouldn’t have flown. Ordinary people generally understand this. Especially mother and grandmothers, Nassim Taleb generally points out. They are often good at the type of risk assessment where financial separators and Nobel laureates in economics are bad.
– Decision makers went and waited for evidence of whether the masks helped against infection, but you should not expect evidence in this situation, you should just do it. And if there will be evidence that the masks don’t work, then stop with the masks!
That there is a balance Wandering between virus and economy, Nassim Taleb disagrees.
– That’s the biggest shit on Earth’s surface right now.
– Suppose you let the virus run freely, then you will have one sixth of your seriously ill population. It would have enormous financial consequences. And if you let it run freely, it will also affect people’s long-term behavior. It will make paranoid people extremely paranoid and it will also have an effect on the economy.
– Furthermore, it is completely immoral to speculate on people’s lives.
A Chinese man in Wuhan, the city where the new corona virus is believed to have originated, wears mouth protection.
Photo: Ng Han Guan / AP
The best for the economy he had been reacting in time. The priority should have been to close the borders around China so that the virus could not spread worldwide.
– At first, you should focus on the super spreaders, he says.
For a new virus to take off, a person must initially infect many people. Most sick people don’t infect anyone, and if only a few people are sick and don’t infect more than a few, the virus will go away. In other words, a party in a villa is required where one person can infect 70 others. Or that a woman in South Korea manages to spread the virus at mass gatherings in her religious sect. Pandemics are not black swans in a globalized world. Therefore, we must learn to deal with them on time. Close the border and set the big events, says Nassim Taleb. Then it will be the airlines and Allsvenskan that will take the financial hit.
Instead of the entire world economy.
– Now the state must help people financially through the crisis. People, not companies, he adds.
As soon as you start helping companies it will inevitably end up in a situation where you are effectively rewarding companies that didn’t. It was never a question of whether it would be a global pandemic, but only of when, according to Nassim Taleb. And why should we reward the French for not taking out insurance?
– Provide small businesses with interest-free loans that they can repay for fifteen years. But don’t help big American companies that have bought their own stock instead of saving money on the account.
With regard to Sweden, he does not want to speak specifically because he has not studied the details of Swedish politics.
– But I can say in principle, he says.
Photo: REX
As Nassim Taleb sees it Swedish policy is completely wrong, regardless of whether Sweden, in retrospect, proves to have worked as well as other countries.
– If I tell you that you should play Russian roulette. I raise the gun to my head and my finger to the traces and pain, nothing happens. So I laugh and mock you for warning me: look I’m still alive! It is not very wise. And that doesn’t prove that Russian roulette is a good idea.
In other words, what proves to be the best way to deal with covid-19 does not have to be the smartest way to deal with pandemics in the future. This is Nassim Taleb’s comment on Sweden. He is overworked and tired and trying to catch the “Count of Monte Christo” in French to read. But Nassim Taleb feels safer than in many years.
– I was depressed after the Ebola outbreak. But now the world has an opportunity to learn. This virus is not a dead man. The next time we are threatened by a pandemic, the world will know what to do. We may have learned our homework, he says.
Read more: How to Reveal the Shit Around You
