FT.com / Comment / Opinion - Ten principles for a Black Swan-proof world
What is fragile should break early while it is still small.
N.N. Taleb's ideas about how to avoid financial black swans in the future, based principally on greater regulation (regulating to help people from themselves)
"No incentives without disincentives: capitalism is about rewards and punishments, not just rewards."FT.com / Comment / Opinion - Ten principles for a Black Swan-proof world
10 principles to rebuild on.
1. What is fragile should break early while it is still small. Nothing should ever become too big to fail. 2. No socialisation of losses & privatisation of gains. 3. People who were driving a school bus blindfolded (& crashed it) should never be given a new bus. 4. No incentives without disincentives: capitalism is about rewards and punishments, not just rewards. 5. Complexity from globalisation and highly networked economic life needs to be countered by simplicity in financial products. The complex economy is already a form of leverage: the leverage of efficiency. 6. Complex derivatives need to be banned because nobody understands them and few are rational enough to know it. 7. Governments should never need to “restore confidence”. 8. Using leverage to cure the problems of too much leverage is not homeopathy, it is denial. 9. Citizens should not depend on financial assets or fallible “expert” advice for their retirement. 10. we will have to remake the system before it does so itself"
Taleb k současné krizi
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.When you succeed with Free, you are going to die by Free « blog maverick