SOME THOUGHTS ON EXTREMISTAN

Here's a good video of Nassim Taleb giving a presentation at the Long Now Foundation (taped last fall).  For long time readers of this blog, Nassim's thinking should be familiar (the first post on him here was way back in 2004).  As always, reading and listening to anything from Nassim incites me to think, which means it is a valuable experience.  I suspect, given my correspondence with him, that the experience is mutual since we are both on a similar journey of discovery.  

Watching the video today prompted some thinking about extremistan.  That's Nassim's term to describe areas of our experience that defy statistical analysis, modeling and thereby prediction.  Essentially, he makes the persuasive case that all of the topics covered by the social sciences (from economics to warfare) are now firmly in extremistan, rather than the gaussian and statistically predictive world of mediocristan.  Outcomes in extremistan are opaque to prediction yet can yield system changing results.  Additionally, he makes the case that we are moving more deeply into extremistan due to the rapid increase in our use of highly leveraged, tightly coupled, and blindingly fast network connectivity.  Here are some examples of what a world dominated by a hyper-extremistan yields:

• More winner take all competitions.  As in: a small number of individuals or companies win everything.  More inequality and less social justice are inevitable.
• Actions by individuals and small groups generate increasingly extreme results (this is akin to the superempowerment thesis for global guerrillas readers).  As in: "eventually, one man might be able to declare war on the world and win."
• Systemic events, both negative and positive, will occur at a high frequency, faster and with more extreme outcomes than ever before (this is also a common feature of unstable, high performance systems that lack a correspondingly high performance control system -- as in, you don't need to predict far in advance if you can correct fast enough).

NOTE (here's a follow up to the earlier post on Entrepreneurship as Resilience):  In a world dominated my mediocristan outcomes, employment is a function of long term planning, training and experience.  People could spend a lifetime working in the same industry and doing the same thing.  Further, it was possible to rely on the idea that things like pensions, health care, and a job would be there when you retire.  That's gone.  Entrepreneurship can provide a salve to this problem.  It is a vital skill/mind set that allows you to rapidly pilot new strategies for income generation within a rapidly changing environment.  Further, it assumes very little.  If it doesn't work, try something else.  If it does work, reap the rewards and go onto the next idea.