All Episodes
Previous Next
Aug. 28, 2025 - Ron Paul Liberty Report
29:51
Nassim Nicholas Taleb - 'The World in Which We Live Now'

Taleb provides seven main points to address the conundrum of our current times...

|

Time Text
Skin in the Game 00:03:12
Okay, next, another heavy hitter, very well known for his books, especially The Black Swan.
And he deals with risk and uncertainty.
I see people mention him on X all the time because he is known, and even somebody said it earlier today, for pointing out how politicians do not have skin in a game, and they really don't.
And even Professor Sachs, when he was talking to Jake Sullivan, don't do this, don't go to war.
They did it, you know, and look, half a million dead.
And he's elf at Harvard in his new job because they have no skin in the game.
They use other troops, other people's kids.
They use other people's money to pay for it.
They're totally sheltered from their consequences.
And this man, this is what he specializes in.
Please welcome Nassim Nicholas Taleb.
Hello, I'm honored to be here.
And I thank Colonel McGregor for discussing skin in the game because basically I have nothing to add, maybe a few details.
So before I start my thing on seven points that characterize a modern world that's completely different from what we have in mind, let me mention something on skin in the game.
The idea of skin in the game is that it's not so much a deterrent as much as a filter.
When you drive on a highway, even on Friday night or even on New Year's Eve, you know, anyone could make, to drive backwards, kill 15 people.
Why it doesn't happen frequently?
It's because you can only do it once.
Drivers have skin in the game.
So car accidents kill people, you kill innocent victims, but you're first to go, or you're more likely to go.
So skin in the game used to be part of war.
But that was my talk in 2018, so I'm not going to repeat that talk.
I have something else.
So it was to be because most commanders were on the front line.
So society got rid of Sullivans and Schmullovans and all these guys, okay, by putting them in front of the line.
So warmongers were more likely to die.
And this is how we had control that we lost now with technology, because you can be in an air-conditioned room, kill half a million people, and incur no personal risk.
So this time I'm going to talk to thank you, but my talk was, you know, was my alternative talk was presented because it's not more than that simple point presented by Colonel Klukron.
Debt and Growth Concentration 00:15:47
So now, what is it in a modern world?
Please stop me five minutes before, so I can, okay, so because I can't carry it on, I can carry it on.
Another good speaker, and by design, because if the message can survive in spite of my poor speaking abilities, it means it's got to be powerful, all right?
So there's seven things.
Why seven points?
Because I've been studying Babylonian history and seven is a Babylonian number.
So, and also it's good marketing.
Anyway, seven points that characterize our modern world that our educational system can't grasp.
The first one, and that was the center of the black swan, is concentration, winner-take-all effects.
How?
If you have an island, you take an island, it would have a lot of species, but it would have much higher densities of species per square meter than a continent.
You open up, you're going to have fewer species because some of them will win.
We had that in cultural life.
The Beatles, Harry Potter.
Now everybody reads the same book.
You can't make a living as an author now because a few authors make most of the money, particularly in a fiction space.
Because either you sell 20 million or you work for Starbucks.
Unless you work out Starbucks, in which case you can work for other places.
I work out Starbucks personally.
So anyway.
So that causes winner-take-all effects.
Opera singers could make a living because there was no audiovisual.
And of course, today, or as of, you know, 2000, 10 opera singers made most of the income of all opera singers.
Okay?
So, and that concentration is okay so long as the road from Google, from college dorms to Google, remains as short as the road from Google to college dorms.
And that was the case.
We saw what happened.
Alta Vista disappeared in how many?
12 minutes?
Was replaced by Google.
Nothing replacing Google.
Why?
Because it's getting sticky at the top, and that's unhealthy.
The process of concentration in itself is not unhealthy, this market mechanism.
What is unhealthy is when people become powerful and what we have now is techno-feudalism.
So that's my first point on concentration.
Now it applies to a lot of things.
Example, viruses.
It took about a week for COVID to dominate the planet.
Okay, to reach, you know, one convention in Chicago, you know, can redistribute across the whole planet.
The bubonic plague took 330 years to go from what's Istanbul now to the north of England.
You see, and of course never reached the Americas because we didn't have the same connectivity.
Now, connectivity is not a problem.
It's only a problem if you have an archaic textbook understanding of our economic and social cultural and biological life.
See?
So we got to, and it is pathological, of course, if it's sticky.
When I wrote Skinny Game, I think I looked at the data and the fourth billionaires, you had about, I think, only 10% of the families were there 30 years later.
I mean, up till 2010, I think.
In Europe, it's a reverse.
And it looks like we're going to be more like Europe, but with even more concentration and more technological.
So that's point one.
Point two.
We have problems understanding dominance and geography, mostly because historians aren't statisticians.
And I'm statisticians, so we view things differently.
And you got to look at history more as a process than as some kind of textbook museum description of things.
In 2007, when I published The Black Swan, it's an old book now.
Strangely, it came back to the bestseller list not long after someone warned me, he said, your tweets are going to make your books extinct.
Okay, out of print.
Anyway, so it looks like things are working in reverse.
So the United States had about 20% of the world economy.
I'm using person power parity, which is the most rational one.
Europe, same thing.
What's Europe now?
What's EU now?
20%.
And China, 6%.
Now the US is about, what, 15%?
And declining, dropping.
Europe is about 14% and really dropping.
And what's China?
North at 20%.
Okay?
So I'm talking about within the life of a book.
So you think that the future is going to be any different?
There's something called compound growth.
Very small differential in growth can produce monstrously large outcomes.
And this is what Warren Buffett discovered over time.
So we talk about the next generation, even half a generation from today, we know who's going to dominate the planet.
Someone may argue, well, PPP, you know, is not real.
It's real dollars.
Even the real dollars, the story is similar.
But the other thing I'm going to say now that we're talking about weapons, but PPP, how much would it cost to produce this share probably made in China?
Probably cost $1 there.
How much would it cost to make that share here?
A lot.
I mean, we, and in the military, apply that to the military.
We spend what, about a trillion.
How much do the Chinese spend?
About a third of that.
Just compare the prices, what they get for a third of that.
And you realize who is the real superpower getting to be a superpower.
And if it's not a superpower now, wait about two hours, I don't know, or two weeks, or maybe two months, just like we see buildings coming out of nowhere.
Now, this is not pro-China, anti-China.
This is just a description.
And as I noticed in the Black Swan, we have difficulties dealing with time, with projecting things with time, the way we project how things will happen based on a very primitive analysis of the past.
No even, you know, no consideration of second world effects.
So this is, now you can expect that this meeting about war may have to take place in Beijing because you may find it more important to convince them than a bunch of people in Washington who are overpaid because of, you know.
And then we have disease they don't have.
There's three diseases we have.
The first one is educational cost.
100,000, you know what they produce for.
You know, I mean, as a professor, we have students coming in, very qualified.
How much does an education cost?
It's not one order of magnitude, it's two order of magnitude less.
Okay, the second point is healthcare.
By now, China is 20% of the nature index and publication, largely in biology and medicine.
So you know that they're and their healthcare is improving very fast, and you know how much cheaper it is for them to do business.
And the third problem is the military.
You know, they don't yet have the $53,000 trash can.
You remember years ago the $3,000 toilet seat, you know, that caused uproar, it got worse.
Well, you gotta imagine that the $53,000 trash can is gonna get worse.
That was what Boeing charged taxpayer.
So that's point number two.
That was point number two.
Point number three, there is an S-curve in life in biology everywhere.
This I discuss in anti-fragile and great details.
That things go up with accelerating returns, it's a convex word, and then it slows down.
And you've got to imagine that that too applies to economic growth.
Once you have a two-car garage, do you want to have a five-car garage?
Maybe, yeah, some people like to have five cars, all right?
Some people collect cars.
But in general, the incentive is not there.
So China is growing fast.
Why?
Because they still have people who don't have a car, don't have a car garage.
So it's still growing, okay?
They got a lot of people.
And you can, you know, you have your own growth to take into consideration.
So whereas Europe, they have their one month vacation.
They'd like to grow, but there's no incentive.
So you have diminishing growth.
And it's entirely healthy.
You reach destination.
It applies to your life.
Same thing with food.
You don't have food, you want a lot of food, and then you saturate.
Now, what is the problem there?
The problem is that it is the countries that have reached saturation that have the most debt, amount of debt.
And that's when you need to grow.
There's a French expression, one only lends to the rich people.
So the problem is you get rich, and then you borrow.
You borrow a lot.
And then now you need to grow.
And how are you going to grow?
Okay?
And of course, you have blunders like by this current government.
They don't realize that the aim of these tariffs is to prevent growth.
Why?
Because the economy has 4% unemployment.
So if you're, you know, you're going to have someone who is a brain surgeon, you're going to have to move resources into lower margin items.
Of course, you're going to slow down economic growth.
It's the equivalent of asking for more balance a brain surgeon to become a gardener once a week, you know, take care of his garden or her garden on grounds that he, you know, is already ripped off by a gardener, so you've got to do it yourself.
That's the reasoning of the Trump administration.
Well, that depresses GDP.
So it's gonna is, you know, I'm sure there are economists.
Yeah, I mean, they're say I disagree with the economic establishment, but at that point, that's pretty much orthodox economics.
So so we have a problem now with that metastatic government and of course you know irresponsible fiscal policy, all right?
And we don't have the political mechanism to correct for that.
Okay, hence I'm here because people can understand that debt is maybe interesting when you're growing in the lower part of the S-curve, but it's a bad thing up top, and you got to do something quickly because soon most of our expenditure will be servicing the debt.
But there is a problem.
And what is the problem?
That you got to borrow, no?
Now you depend on borrowing.
And guess what?
You need foreigners or locals to buy your debt.
Now, what did former President Joseph Biden do in 2022?
He convinced any human being on a planet who is not part of the US government to avoid US-denominated assets.
Why?
Because if you freeze assets in your own currency, you're discouraging anyone from having it's no longer a safe currency.
Because you had breakfast with the first cousin of someone who knew Putin when he was a student in St. Petersburg.
Now your assets are frozen.
Okay?
What are you going to do?
Avoid the dollar, hence, go where.
Gold.
So we have more and more transactions conducted in US dollars nominally with the money stored in gold.
And guess what?
By forcing the EU to do the same, and even Switzerland to freeze assets, you're basically convincing people that that's what we've got to do.
So gold rallied now about what 35% and all central bank reserves and the BRICS are moving into gold.
Okay?
Now, not counting the new, I would say, schizophrenic, or I would say a random rather than schizophrenic, because schizophrenia has this pattern, but here is random.
Our new random president is definitely convincing people to stay even further away than the previous less random but more predictable, but of course no less nefarious one.
That's number three.
As I said, there's an S curve and you got a problem from that.
Point number four: immigration or migrations here, Western Europe, anywhere.
When the economy becomes mature, it so happens that fewer people are interested in cleaning bathrooms.
They're more interested in teaching medieval history than cleaning bathrooms.
You can't blame, do you want to blame him for that?
Okay, so you run out of people to clean the streets.
Immigration's Mature Economy Dilemma 00:04:09
You don't yet have robots to do that.
And what do you do?
And you don't have domestic servants, you know, so you import people, okay?
Hence, immigration in mature economies, Western Europe, and dependence on that immigration.
In the US, I tend to ride my bicycle because I became a cyclist since 2018, which changes my life.
So I added more books and, of course, the activity of cycling.
So I go to neighborhoods, and all I see is Latin American workers.
I mean, I didn't ask them for their immigration status, but I think I can, just looking at statistics, make my own inference.
So now what happens if you deport a substantial number of these people?
Have a brain surgeon, as I said, will have to do what?
To go mow the lawn, learn masonry, and then of course empty the garbage can, stuff like that, that brain surgeons prefer to delegate.
And then you know what happened during COVID when we had a small little shortage of labor, what happened to prices?
Restaurants had to close because waiters were asking astronomical number of dollars.
Well, that's what would happen without immigration.
This is what's not sinking in.
That it's fine.
You want to be an ethno-state.
You're welcome.
It's free.
It's freedom.
But what comes with it is that you're going to have to teach your people to clean bathrooms.
So you've got to decide.
And it's a market that is not on immigration.
This is why Meloney got elected on a platform, an anti-immigration platform, and guess what?
Immigration increased in Italy.
And it would have been worse if Ukraine did not supply Western Europe with all these people eager to work, doing anything.
So that's the problem we have now with ICE.
They fundamentally know that the U.S. economy would collapse without illegal immigrants simply because that's how it was built.
You had to reverse, you have people have to have no lawn, you have to change the culture, reduce the size of houses, and live in prefabs.
I mean, of course, prefabs would be made in China and shipped here or maybe made in Mexico with Chinese equipment.
But you can imagine what would happen if you want to restrict immigration.
So you can't have the pioneer tool.
So what happens is that the solution they're opting for is a solution of humiliating the workers, but sort of keeping them here.
That's what is happening with ICE.
So someone is vicious and not far from here.
I mean, you can ride a bike to where the person is operating.
And it looks like that's the only motive, because the economics doesn't match the, I mean, the output is not, or maybe getting good for it.
So we have a problem here and elsewhere.
Now you say, okay, I want to be in museum state, and it's bad to have immigrants.
That's fine.
You kick the immigrants out.
You have your museum state.
And you say, okay, I'm not going to have economic growth.
Or maybe the GDP would go down by 30, 40%.
That's fine.
But you've got to make your choices rationally.
Not like, like, I want to eat a cake.
I skipped the cake now.
Lunch.
I want to eat the cake and I want to lose weight.
Okay?
There's no such thing as Ozempic for economies.
Why We Lost Control Over Media 00:03:27
So that was my point number four.
Point number five.
Now, let me enter the positive aspects of things.
The last hundred years or so, we were victims of the media in the sense that you go home, sit, eat your TV saying, and the victim of the media is a victim of, of course, the suppliers of TV dinners, where families of four would sit down and communicate with the rest of the world.
Actually, not communicate, just receive without communicating.
But traditionally, The way we humans received information was by trading it.
You go to the barber shop, you go to the fishmonger, and you get all the rumors, and you convey rumors.
So you were both a conveyor and recipient of information.
That was the old model.
It was destroyed by state media or by big media, where you sit down and you have someone lecturing you, and then you turn the TV off and then you go to bed, all right?
Or you have your nightcap and then go to bed, whatever, depending on your lifestyle.
So now what we have, TikTok, Schmick Talk, Google, stuff where you're both conveying information and receiving information.
And that's so natural, and it's impossible to control the social media.
Even with all their techniques, it's not easy to control social media.
And even more difficult to control AI because then you start having incoherent outcomes if you control AI.
It's a little technical, but for now, let me explain that Gaza happened, they should have done the ethnic cleansing of Gaza in, I would say, 97.
It would have worked.
Okay, you have ABC News, CBS, all that, that would have covered for them.
Okay, but you can't do it in 2025 because of social media.
You can't control social media.
Even if they can boulderize, they can censor, still.
So this is a good point because someone was talking to me about the media in Washington, and I told him the only people who cares about the media are people who are either in a wheelchair or in politics.
So other than that, anyone under the age of 31 and a half has no idea what ABC News means.
even i mean i i never watched tv but but even people my generation a lot of people don't watch tv anymore so this is positive because here we have the i mean i got here via twitter okay So I didn't get here via conventional methods.
Now, number six.
When we talk about governments, you go to history books and you talk about Henry VIII and this and that and the king of France, Colbert, you're talking about different notions of government.
Government Scale Matters 00:02:52
Today in Europe, the governor represents about 55% of GDP.
In France, it depends if you count education or not.
Up to 70%, I don't know.
It depends how you come.
See, high numbers.
And here in the US, it's actually higher than reported because the government is involved indirectly.
And plus you have local government.
You can add that up.
100 years ago, it was mostly under 10% and often under 5% of GDP.
So you realize that the government role had been creeping up in things that, you know, so when we talk about a dictatorial government in 1900, they couldn't control that much because that was not much of the economy.
That was not a large share of the economy compared to today.
So government has been creeping up.
Even in economies deemed to be driven by Adam Smith, government has been creeping up.
So this is something you can't stop.
Please let me know before we finish.
And then finally, point number seven is scale matters as a central element of any description.
And let me say so.
I had an aphorism inspired by two brothers.
So I was arguing with them about who's libertarian, not libertarian, why the size and the scale matters.
And the aphorism came out like I'm libertarian.
at the national level, national mean U.S. Republican at a state level, Democrat at a municipal level, and communist at a family level, right?
So you can be, and basically, so basically it depends on scale, where you want the government to be, because sometimes you can't escape government.
If you're a member of country clubs, they have a government, they have the rules, enforcement, all of that.
But this is not a trivial point because when we compare countries, when we look at the successes of nation states, the ones that have been successful are tiny ones.
So not or within tiny ones, city-states.
The city-state model has worked beautifully in history.
And when we look at the success of Dubai, because it's small, Dubai, Singapore is small.
Venice was small and lasted a thousand years.
So we look at successful models of governance, you always see scale.
And what's happening is that with the growth of the US economy, and of course hence the complexity of it, we are going away from governance naturally.
Drastic Control Needed 00:00:21
And so you need even more drastic control of the US government than we have had to have in, say, 40 years or 50 years ago.
So I don't know.
The questions are not allowed, I think.
No?
No?
Okay, so no questions.
So thank you very much.
I think I'm done.
So seven points.
Okay.
Export Selection