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Risk analyst Nassim Nicholas Taleb predicted the 2008 financial crisis, by pointing out that commonly-used risk models were wrong. Distinguished professor of risk engineering at New York University, author of best-sellers The Black Swan and Fooled by Randomness, Taleb became financially independent after the crash of 1987, and wealthy during the 2008 financial crisis.
Now, Taleb is using his statistical risk acumen to take on genetically modified organisms (GMOs).
Taleb’s conclusion: GMOs could cause “an irreversible termination of life at some scale, which could be the planet.”
Sure it does … but only because we don’t understand statistics, and so we have no handle on what’s risky and what’s not.
Taleb and his 2 co-authors write in a new draft paper:
For nature, the “ruin” is ecocide: an irreversible termination of life at some scale, which could be the planet.
Genetically Modified Organisms, GMOs fall squarely under [the precautionary principle, i.e. the rule that we should err on the side of caution if something is really dangerous] not because of the harm to the consumer because of their systemic risk on the system.
Top-down modifications to the system (through GMOs) are categorically and statistically different from bottom up ones (regular farming, progressive tinkering with crops, etc.) There is no comparison between the tinkering of selective breeding and the top-down engineering of arbitrarily taking a gene from an organism and putting it into another. Saying that such a product is natural misses the statistical process by which things become ”natural”. [i.e. evolving over thousands of years in a natural ecosystem, or at least breeding over several generations.]
What people miss is that the modification of crops impacts everyone and exports the error from the local to the global. I do not wish to pay—or have my descendants pay—for errors by executives of Monsanto. We should exert the precautionary principle there—our non-naive version—simply because we would only discover errors after considerable and irreversible environmental damage.
Taleb shreds GMO-boosters – including biologists – who don’t understand basic statistics:
Calling the GMO approach “scientific” betrays a very poor—indeed warped—understanding of probabilistic payoffs and risk management.
It became popular to claim irrationality for GMO and other skepticism on the part of the general public —not realizing that there is in fact an ”expert problem” and such skepticism is healthy and even necessary for survival. For instance, in The Rational Animal, the author pathologize people for not accepting GMOs although ”the World Health Organization has never found evidence of ill effects” a standard confusion of evidence of absence and absence of evidence. Such a pathologizing is similar to behavioral researchers labeling hyperbolic discounting as ”irrational” when in fact it is largely the researcher who has a very narrow model and richer models make the ”irrationality” go away).
In other words, lack of knowledge of basic statistical principles leads GMO supporters astray. For example, they don’t understand the concept that “interdependence” creates “thick tails” … leading to a “black swan” catastrophic risk event:
Fat tails result (among other things) from the interdependence of components, leading to aggregate variations becoming much more severe than individual ones. Interdependence disrupts the functioning of the central limit theorem, by which the aggregate is more stable than the sum of the parts. Whether components are independent or interdependent matters a lot to systemic disasters such as pandemics or generalized crises. The interdependence increases the probability of ruin, to the point of certainty.
(This concept is important in the financial world, as well.)
As Forbes’ Brian Stoffel notes:
Let’s say each GM seed that’s produced holds a 0.1% chance of — somehow, in the intricately interdependent web of nature — leading to a catastrophic breakdown of the ecosystem that we rely on for life. All by itself, it doesn’t seem too harmful, but with each new seed that’s developed, the risk gets greater and greater.
The chart below demonstrates how, over time, even a 0.1% chance of ecocide can be dangerous.
I cannot stress enough that the probabilities I am using are for illustrative purposes only. Neither I, nor Taleb, claim to know what the chances are of any one type of seed causing such destruction.
The focus, instead, should be on the fact that the “total ecocide barrier” is bound to be hit, over a long enough time, with even incredibly small odds. Taleb includes a similar graph in his work, but no breakdown of the actual variables at play.
Source: Author’s input, based on Taleb, Read, and Bar-Yam paper
Taleb debunks other pro-GMO claims as well, such as:
1. The Risk of Famine If We Don’t Use GMOs. Taleb says:
Invoking the risk of “famine” as an alternative to GMOs is a deceitful strategy, no different from urging people to play Russian roulette in order to get out of poverty.
And calling the GMO approach “scientific” betrays a very poor—indeed warped—understanding of probabilistic payoffs and risk management.
2. Nothing Is Totally Safe, So Should We Discard All Technology? Taleb says this is an anti-scientific argument. Some risks are small, or are only risks to one individual or a small group of people. When you’re talking about risks which could wipe out all life on Earth, it’s a totally different analysis.
3. Assuming that Nature Is Always Good Is Anti-Scientific. Taleb says that statistical risk analysis don’t use assumptions such as nature is “good” or “bad”. Rather, it looks at the statistical evidence that things persist in nature for thousands of years if they are robust and anti-fragile. Ecosystems break down if they become unstable.
GMO engineers may be smart in their field, but they are ignorant when it comes to long-run ecological reality:
We are not saying nature is the smartest possible, we are saying that time is smarter than GMO engineers. Plain statistical significance.
3. People Brought Potatoes from the Americas Back to Europe, Without Problem. Taleb says that potatoes evolved and competed over thousands of years in the Americas, and so proved that they did not disrupt ecosystems. On the other hand, GMOs are brand spanking new … created in the blink of the eye in a lab.
As if “ecocide”isn’t enough, there are many other reasons to oppose GMO foods … at least without rigorous testing, including decreased crop yield, increased pesticide requirements, and potentiallysevere health effects.
On the plus side? A few companies will make a lot of money.
Knowledge and Power: The Information Theory of Capitalism and How it is Revolutionizing our World | 1913 Intel
Ronald Reagan’s most-quoted living author – George Gilder – is back with an all-new paradigm-shifting theory of capitalism that will upturn conventional wisdom, just when our economy desperately needs a new direction.
America’s struggling economy needs a better philosophy than the college student’s lament: “I can’t be out of money, I still have checks in my checkbook!” We’ve tried a government spending spree, and we’ve learned it doesn’t work. Now is the time to rededicate our country to the pursuit of free market capitalism, before we’re buried under a mound of debt and unfunded entitlements. But how do we navigate between government spending that’s too big to sustain and financial institutions that are “too big to fail?” In Knowledge and Power, George Gilder proposes a bold new theory on how capitalism produces wealth and how our economy can regain its vitality and its growth.
Gilder breaks away from the supply-side model of economics to present a new economic paradigm: the epic conflict between the knowledge of entrepreneurs on one side, and the blunt power of government on the other. The knowledge of entrepreneurs, and their freedom to share and use that knowledge, are the sparks that light up the economy and set its gears in motion. The power of government to regulate, stifle, manipulate, subsidize or suppress knowledge and ideas is the inertia that slows those gears down, or keeps them from turning at all.
One of the twentieth century’s defining economic minds has returned with a new philosophy to carry us into the twenty-first. Knowledge and Power is a must-read for fiscal conservatives, business owners, CEOs, investors, and anyone interested in propelling America’s economy to future success.
Game-changing but flawed
July 7, 2013
By William R. Wiltschko
Format:Hardcover|Amazon Verified Purchase
As other viewers have remarked, an information theory-based foundation for polical economy explained by this book is a big new idea. Revolutionary, game-changing, etc., all true. I have recommended the book to several friends, and will continue to do so, but the book is also flawed. The least of these flaws is that the core collection of important new ideas could have been explained in a magazine article. The book is divided into 25 chapters and three parts. Eleven chapters are in part one and are must reading. There are six interesting chapters in part two. All of part three can be skipped except the last chapter.
Gilder has integrated free markets and limited government under an information theory umbrella that credibly shows both theoretically and anecdotally how entrepreneurs drive economic and social progress. This is huge. He showed how more parts of the political-economic world fit together that I had formerly thought disparate.
Besides the length, a flaw of the book is that much of it is a series of extended book reviews. In many cases, I failed to see a compelling link to his information theory of political economy. Another flaw is the intellectual fights he picks with some unlikely targets. One of these fights is an attempt to resurrect “supply side” as a useful term. I agree with him on the substance, but see this as a re-branding loser.
A notable fight is with Nicholas Taleb, author of “Black Swan” and more recently “Anti-Fragile”. Gilder doesn’t acknowledge until the last two pages of the Taleb chapter (#18) that Taleb is on his side. Taleb has railed for years against over-dependence on Gaussian dogma, which is perfectly consistent with the acknowledgement of “surprises” that entrepreneurs produce. Gilder also fails to acknowledge that macro events, such as currency collapses, render moot for a short time any insider knowledge an investor might have about a company or industry. In the last two pages of the Black Swan chapter, Gilder seems to take back everything he said earlier in the chapter. If so, why did he leave in the chapter???
I have tremendous respect for Gilder. I actually met him once when I was at Intel. I respect his digging and digging to understand the economic ramifications of technology. While I think this book is a blockbuster of ideas, it is marred with misguided tangents and padding.