Unthinkable_ Who Survives When Disaster Strikes - and Why - Amanda Ripley [19]
We gauge risk literally hundreds of times per day, usually well and often subconsciously. For more predictable calamities, the first phase of disaster think actually begins with this calculus. We start assessing risk before the disaster even happens. We are doing it right now. We decide where to live and what kind of insurance to buy, just like we process all kinds of everyday risks: we wear bike helmets, or not. We buckle our seat belts, smoke a cigarette, and let our kids stay out until midnight. Or not.
To deconstruct how we place these bets, I called Nassim Nicholas Taleb, a man obsessed with risk. Taleb spent twenty years as a trader in New York and London, earning money off other people’s blind spots. While other traders indulged in big short-term risks in hopes of big, short-term gains, Taleb set up his investments so that he could never win big—nor lose big. He was hedged every which way. “I never have blown up, and I never will,” he likes to say.
One autumn day, Taleb and I met for tea in Washington, D.C. Taleb, who has a balding head and a gray beard, is an author and a professor now, in addition to holding a large stake in a hedge fund. He likes to do many things at once, and he speaks so quickly that it is sometimes hard to keep up. That afternoon, he had come from the Pentagon, where he had briefed officials on his theories about uncertainty. The Pentagon was a strange place for him to be, since Taleb is a self-described pacifist. But he’s the kind of pacifist the Pentagon can tolerate—which is to say, the stoic kind. “I am a peace activist simply out of rationality,” he explains.
Taleb grew up in Lebanon, a country haunted by war’s unintended consequences. He has concluded that human beings are unable to handle war in the modern age. “We’re not really able to assess how long wars will take and what the net outcome will be.” The risk is too complex for our abilities. Once upon a time, we were better at war. “In a primitive environment, if someone is threatening me, I go kill him,” he says in his clipped, matter-of-fact way. “And I get good results most of the time.” He calls this environment “Mediocristan,” a place where it is hard to kill many people at once; a place where cause and effect are more closely connected. Homo sapiens spent hundreds of thousands of years living in Mediocristan. We rarely needed to understand probability because, most of the time, life was simpler, and the range of possible events was narrower.
But today, we live in a place Taleb calls “Extremistan,” subject to the “tyranny of the singular, the accidental, the unseen and the unpredicted.” Technology has allowed us to create weaponry that can strafe the planet in minutes. Lone individuals can alter the course of history. People kill each other every day without much physical exertion. And, at the same time, we have become ever more interdependent. What happens on one continent now has consequences for another. World War I, Taleb points out, was expected to be a rather small affair. So was Vietnam. In fact, the twentieth century was, and now the twenty-first century is, characterized by wars of unforeseen results. America’s war in Iraq was certainly not intended to create more terrorists