Risk, Uncertainty, & Democracy

This multiplicity of meanings would have likely vexed Frank Knight, whose 1921 book Risk, Uncertainty, and Profit argued that risk that differed from uncertainty or hazard on account of being calculable. ‘The essential fact is that “risk” means in some cases a quantity susceptible of measurement’, he wrote, drawing on the example of a champagne producer who knows that a certain percentage of bottles will break during production. Because the risk of breakage is predictable and quantifiable, its associated costs can be passed along to the consumer alongside other expenses, like labor (Knight Citation1921, 19–20). Uncertainty, on the other hand, involved that about which ‘the conception of an objectively measurable probability or chance is simply inapplicable’ (231). This was a distinction that John Maynard Keynes echoed both his Treatise on Probability (1921) and his comments on The General Theory: ‘About these matters [e.g. the price of copper in twenty years time] there is no scientific basis on which to form any calculable probability whatsoever. We simply do not know’ (Keynes Citation1937, 214).

A century later, it is evident that Knight’s narrow definition of risk has been largely overtaken by a more expansive, and ambiguous, alternative. On the one hand, advances in risk modeling such as the Monte Carlo method – and the securities and derivatives it helped popularize – have enabled financial services firms to commodify and price risk in novel ways. Yet, as the contribution by Andrea Saltelli underscores, there are good reasons to look critically at the increasingly complex and often opaque mathematical models used in estimations of risk. Infamous in this regard is the former CEO of Goldman Sachs, David Viniar, who claimed in 2007 that the bank had experienced ‘25 standard deviation events, several days in a row’. As John Kay and Mervyn King have argued in Radical Uncertainty (Citation2020), tools developed to understand risk cannot fully tame uncertainty. It is not just that models might not correspond with the underlying reality they purport to describe, but that the mere existence of a model projects an unwarranted sense of security.

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As this brief survey suggests, thinking about risk, uncertainty, and democracy in the twenty-first century is a practice that cuts across disciplines, subject matter, and time periods. Trying to craft a comprehensive volume would be a fool’s errand, and the contributions included here only begin to scratch the surface. In lieu of comprehension, we have aimed to model a different way of thinking and speaking about risk – one that moves away from technocratic approaches to center the workings of power, and that can be applied to a broad range of analyses. We trust readers will find something worthwhile in our efforts.

- Full Paper Here

India’s Northeast Reveals A Path Beyond Factory Farming

India is a good example because it has states with human populations as big as some countries, and many of these have transitioned away from small-scale, extensive chicken production. While about 35% of chickens in India are still raised in small backyard flocks, most are now kept in indoor commercial systems. Large-scale free-range broiler farms and cage-free egg farms are very rare.

For their analysis, the authors looked at factors linked to intensive chicken farming, including the state’s wealth, human population density, level of urbanization, and local feed production like maize and soy. To spot the outliers, they checked for states whose actual intensification levels were far below predictions. Then they explored whether state policies could help explain this discrepancy.

The authors found that several states in Northeast India, especially Manipur, Assam, Arunachal Pradesh, and Sikkim, have much lower levels of chicken intensification than expected, given their income levels. For example, Sikkim has the second-highest income per person in India but less than 1% of its chickens are raised on commercial farms. In these states, chicken production remains reliant on smallholders, unlike most of India where commercial farming dominates.

One possible reason for these outliers is geography, as the mountainous, forested terrain of the Northeast makes large-scale farming difficult. Another reason could be the region’s lower human population densities, meaning that the market might not be large enough to encourage commercialization.

However, in the authors’ view, the most compelling reason is strong policy choices. Sikkim became the world’s first 100% organic state, banning hormones, growth regulators, feed additives, and antibiotics. Similar organic farming regulations exist in Mizoram, Arunachal Pradesh, and Meghalaya, with support from an organic agriculture program launched by the national government. These states also promote self-sufficiency in egg and chicken meat production through organic farming, and Sikkim has even invested in high-yield indigenous chicken breeds to improve productivity while keeping backyard systems.

The role of these organic policies is highlighted when considering Uttarakhand, a state with similar geography and population density to the Northeastern states but with high levels of chicken intensification. This suggests that the difference is less about physical conditions and more about policies shaping farming practices.

- More Here

How Iran Got To The Point Of Water Bankruptcy

I think we will hear more and more in every geography these two words "Water" & "Bankruptcy" in pairs. 

God bless my moronic species; it's a miracle how we got here. 

During Thanksgiving week,  there was a question about what are you thankful for. I said water and people were like ...  water? 

So even after reading about the Iranian situation nothing is going to change: 

Fall marks the start of Iran’s rainy season, but large parts of the country have barely seen a drop as the nation faces one of its worst droughts in decades. Several key reservoirs are nearly dry, and Tehran, the nation’s capital, is facing an impending “Day Zero” – when the city runs out of water.

The situation is so dire, Iranian President Masoud Pezeshkian has revived a long-debated plan to move the capital from this metro area of 15 million people.

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Iran’s escalating water and environmental problems are the predictable outcome of decades of treating the region’s finite water resources as if they were limitless.

Iran has relied heavily on water-intensive irrigation to grow food in dry landscapes and subsidized water and energy use, resulting in overpumping from aquifers and falling groundwater supplies. The concentration of economic activity and employment in major urban centers, particularly Tehran, has also catalyzed massive migration, further straining already overstretched water resources.

Those and other forces have driven Iran toward “water bankruptcy” – the point where water demand permanently exceeds the supply and nature can’t keep up.

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The country needs to start to decouple its economy from water consumption by investing in sectors that generate value and employment opportunities with minimal water use.

Someone Had To Openly Say This - Taleb Did It!

To clear - I do respect Buffet and Munger. I build a temple for them when compared to contemporary morons (read Paypal mafia). 

and to be clear - Buffet and Munger optimized on legal money (Munger made a billion before his death investing in coal).

and to be clear - In capitalism all in game as long as it's within legal boundaries. They never crossed that line. 

Taleb's Tweet

My problem is they had so much money they could have shown a way to the younger generation by not investing in processed food (Heinz, Kraft Foods) et al., which has long term health effects. 

My problem is they had so much money they had options to bet on stocks sans second order effects but yet they choose not to do so. 

My bet is history will not treat them like messiahs they are treated now. 

A missed opportunity. 

Reading Rules

There are some gems are in Ryan Holiday's 2026 reading rules: 

• You should always be carrying a book.

• If you’re not reading with a pen, you’re not really reading.

• Books are not precious things. It should look like you’ve read the book. Mark it up. Fold pages. Beat them up. Books are not precious things.

• Forget the news, the best way to understand what’s happening in the world is by reading books.

• Don’t be a book snob. I find myself sometimes reluctant to read the latest super popular book. That snobbishness never serves me well. More often than not, when I get around to those bestsellers I kick myself — they were bestsellers for a reason! They’re great!

• If a book sucks, stop reading it. The best readers actually quit a lot of books. You turn off a TV show if it’s boring. 

• The rule for quitting books is one hundred pages minus your age. Meaning: as you age, you have to endure crappy books less and less. I give books a little more time than my 95 year old grandmother does.

• Good writers (and good books) are not hard to read.

• A long book must justify itself. 

• “What’s a book that changed your life?” is a question that will change your life. Ask people you admire for book recommendations. Emerson’s line was, “If we encounter a man of rare intellect, we should ask him what books he reads.”

• Look for wisdom, not facts. We’re not reading to just find random pieces of information. What’s the point of that? We’re reading to accumulate a mass of true wisdom — that you can turn to and apply in your actual life.

• When you find an author you love, read ALL the books they’ve written.

• If you see a book you want, buy it. Don’t worry about the price. Reading is not a luxury. It’s not something you splurge on. It’s a necessity. 

• Our aim as a reader is to understand WHY something happened, the what is secondary. 

Two New Studies Dig Into The Long, Curving Path That Cats Took Toward Domestication

Instead, the study suggests, domesticated cats flourished in China only by following the Silk Road, arriving there around 1,400 years ago. It’s also possible that climate change led to agricultural and population shifts in the region, possibly affecting how much food was available to the lurking Asian wildcats, the researchers suggest.

The paper published in Science, by contrast, focused on Europe and North Africa. It builds on previous work that had suggested the ancestors of domestic cats were a blend of Near Eastern and North African wildcats.

For the new research, the scientists analyzed samples of nuclear DNA—the main genome of an organism, containing both parents’ contributions—from the same specimens that were examined in the older study, which had not looked at this type of DNA.

Particularly intriguing was taking a new look at cats that lived in Turkey thousands of years ago. “I was so excited to have a look at their nuclear genomes for the first time,” says Marco De Martino, a paleogeneticist at the University of Rome Tor Vergata and co-author of the study.

Yet the new analysis suggested something dramatically different to the older work. These Neolithic felines were pure wildcat. The finding, similarly to the results of the analysis done in China, suggests that cat domestication unfolded much more slowly than scientists had thought.

“The cat is a complex species; they are independent,” says Claudio Ottoni, a paleogeneticist at the University of Rome Tor Vergata and another co-author of the Science study. “They were not just staying with humans—they would still go around and mix with local wildcats.”

Both findings suggest truly domesticated cats arose far later than previously believed—perhaps as late as 2,000 years ago. If that timeline is correct, it underscores just how rapidly cats have settled into the human world—and how much we have to learn about our feline friends.

- More Here

The two papers:

• The dispersal of domestic cats from North Africa to Europe around 2000 years ago

• The late arrival of domestic cats in China via the Silk Road after 3,500 years of human-leopard cat commensalism

What I've Been Reading

London is Tacoma before Tacoma is even a gleam in a Guggenheim’s eye. 

We pay attention to the wrong things. We make a mystery of Jack the Ripper. 

It’s not a mystery. It’s history.

Murderland: Crime and Bloodlust in the Time of Serial Killers by Caroline Fraser. 

Did anyone thought about asking this simple question of why there are less serial killers these days? Why?

Jessica Wolpaw Reyes was considering ideas for her PhD while worrying about lead paint since she was pregnant. She happened to listen to Steven D. Levitt's (of Freaknomics) talk. 

She narrowed down on the topic of "early childhood exposure and crime rate" in her dissertation (which was published in 2007). Her question became the seed for Fraser's brilliant book. 

This is yet another example of why it so important to meditate on why question to get at-least some of the causality behind a symptom. 

The most important question for us to ask now is - what is the x in 2025 compared to x = lead in 1950 to 1990 (almost 40 years time span)?

My answer is - consuming processed food, eating dead bodies from factory farming with horrible conditions and antibiotics, over eating sans fasting, plastic, cable news, talk radio, social media, cell phone, ecology collapse and living in concrete urban and sub-urban jungles, daily life sans biophilia and so on. 

Most reading this including myself will not be alive in 40 years if and when such a study comes out. 

One can wait for the next 4 decades or embrace precautionary principle now and avoid those potential mental and physical effects. Absence of evidence is not evidence of absence. 

Here's good excerpt from the book: 

According to Patterson, the average American during of age of leaded gasoline is so filthy when it comes to lead contamination that he's comparable to Pig Pen in the Peanuts comic strip. "Thats what people look like with respect to lead," he says. "Everyone. The lead from your hair, when you walk into a superclean laboratory like mine, will contaminate the whole damn laboratory. Just from your hair."

Not only that but Patterson calculates that the blood lead level of pre-industrial  humans would have have been 0.016 micrograms per deciliter, far lower than that of anyone living in the industrial age, American, he concludes, are suffering from "enough partial brain dysfunction, that their lives are being adversely affected by loss of mental acuity and irrationality. He devotes himself to campaigning against lead gasoline and to proving that everything Robert Kehoe ever said or upblished about "normal levels" of lead in blood is wrong.

The issue is currently its just not American's but the whole goddamn world is stuck in processed food, eating dead bodies from factory farming with horrible conditions and antibiotics, over eating sans fasting, plastic, cable news, talk radio, social media, cell phone, ecology collapse and living in concrete urban and sub-urban jungles, daily life sans biophilia and so on. 

Before even reading this book just last month I wrote: 

People who eat meat from factory farms pretending that nothing is going to happen to them is clearly a form of infallibilism.

I am not talking about the tragedy of commons in terms of moral and ecological consequences but their diet makes them live a parochial life, what thoughts they can think, how to live a good life, how to make better decisions for themselves and their families. 

In other words their diet makes their thinking and life stuck in a small rut of quagmire from which they cannot escape to realize the beauty of life right in front of their noses. Perhaps there are  thoughts we cannot think - in the spectrum of bandwidth of thoughts humans can think probably becomes even much smaller with their dietary choices which causes immense suffering. 

A much better payback happening here and now than some subjective future heaven and hell.

Take a moment and thank those men and women who fought so hard for decades to expose the effects of lead.  I bet "God" will appreciate that gulping dead bodies of Turkey.

Take a moment to identify the men and women are currently fighting to expose the cognitive and physical on human beings who are stuck in consuming processed food, eating dead bodies from factory farming with horrible conditions and antibiotics, over eating sans fasting, plastic, cable news, talk radio, social media, cell phone, ecology collapse and living in concrete urban and sub-urban jungles, daily life sans biophilia.

What I've Been Reading

I cannot remember the last time I laughed out so loud while reading a book :-) 

This is a master piece with around 10 minutes of reading time. 

The Basic Laws of Human Stupidity by Carlo M. Cipolla.

• Law 1: Always and inevitably everyone underestimates the number of stupid individuals in circulation. 

• Law 2: The probability that a certain person be stupid is independent of any other characteristic of that person. 

• Law 3: A stupid person is a person who causes losses to another person or to a group of persons while himself deriving no gain and even possibly incurring losses. 

• Law 4: Non-stupid people always underestimate the damaging power of stupid individuals. In particular non-stupid people constantly forget that at all times and places and under any circumstances to deal and/or associate with stupid people always turns out to be a costly mistake. 

• Law 5: A stupid person is the most dangerous type of person. A stupid person is more dangerous than a bandit.

Benefits of Wandering Mind

Self-awareness, creative incubation, improvisation and evaluation, memory consolidation, autobiographical planning, goal driven thought, future planning, retrieval of deeply personal memories, reflective consideration of the meaning of events and experiences, simulating the perspective of another person, evaluating the implications of self and others’ emotional reactions, moral reasoning, and reflective compassion.

- Psychologist Scott Barry Kaufman via Jonathan Haidt's Babel - On The Death of Daydreaming

Meta Values - 41

In life, the most important traits in everything boils down to three P's. 

Patience, Persistence, and Perseverance. 

The sooner you grasp that, the better your life will be. 

Mine happened at 31 when Max came into my life.