Not Doing Nothing
Taleb argues that interventions intended to suppress small disruptions can allow larger vulnerabilities to accumulate. He contrasts that risk with the pressure on officials and professionals to show that they are taking action.
THE IDEA
Not Doing Nothing
A main source of the economic crisis that started in 2007 lies in the iatrogenics of the attempt by Überfragilista Alan Greenspan—certainly the top economic iatrogenist of all time—to iron out the “boom-bust cycle” which caused risks to go hide under the carpet and accumulate there until they blew up the economy. The most depressing part of the Greenspan story is that the fellow was a libertarian and seemingly convinced of the idea of leaving systems to their own devices; people can fool themselves endlessly. The same naive interventionism was also applied by the U.K. government of Fragilista Gordon Brown, a student of the Enlightenment whose overt grand mission was to “eliminate” the business cycle. Fragilista Prime Minister Brown, a master iatrogenist though not nearly in the same league as Greenspan, is now trying to lecture the world on “ethics” and “sustainable” finance—but his policy of centralizing information technology (leading to massive cost overruns and delays in implementation) instead of having decentralized small units has proven difficult to reverse. Indeed, the U.K. health service was operating under the principle that a pin falling somewhere in some remote hospital should be heard in Whitehall (the street in London where the government buildings are centralized). The technical argument about the dangers of concentration is provided in Chapter 18.
These attempts to eliminate the business cycle lead to the mother of all fragilities. Just as a little bit of fire here and there gets rid of the flammable material in a forest, a little bit of harm here and there in an economy weeds out the vulnerable firms early enough to allow them to “fail early” (so they can start again) and minimize the long-term damage to the system.
An ethical problem arises when someone is put in charge. Greenspan’s actions were harmful, but even if he knew that, it would have taken a bit of heroic courage to justify inaction in a democracy where the incentive is to always promise a better outcome than the other guy, regardless of the actual, delayed cost.
Ingenuous interventionism is very pervasive across professions. Just as with the tonsillectomy, if you supply a typical copy editor with a text, he will propose a certain number of edits, say about five changes per page. Now accept his “corrections” and give this text to another copy editor who tends to have the same average rate of intervention (editors vary in interventionism), and you will see that he will suggest an equivalent number of edits, sometimes reversing changes made by the previous editor. Find a third editor, same.
Incidentally, those who do too much somewhere do too little elsewhere—and editing provides a quite fitting example. Over my writing career I’ve noticed that those who overedit tend to miss the real typos (and vice versa). I once pulled an op-ed from The Washington Post owing to the abundance of completely unnecessary edits, as if every word had been replaced by a synonym from the thesaurus. I gave the article to the Financial Times instead. The editor there made one single correction: 1989 became 1990. The Washington Post had tried so hard that they missed the only relevant mistake. As we will see, interventionism depletes mental and economic resources; it is rarely available when it is needed the most. (Beware what you wish for: small government might in the end be more effective at whatever it needs to do. Reduction in size and scope may make it even more intrusive than large government.)
When to use it
Economic policy: Central bankers should resist the urge to micro-manage business cycles, allowing small corrections to prevent larger crises.
Healthcare administration: comparing the coordination benefits of a central information system with the risks of concentrating failures in it.
Editing and publishing: Limit editorial changes to only essential corrections; overediting can introduce errors and waste resources.
Software development: Resist feature creep and unnecessary code changes; minimal intervention leads to more stable and maintainable systems.
FROM THEORY TO EVERYDAY LIFE
In practice
Alan Greenspan and the 2007 Financial Crisis
Taleb argues that Alan Greenspan’s attempts to smooth the business cycle allowed risks to accumulate before the 2007 crisis. He sees a contradiction between Greenspan’s libertarian beliefs and his interventions. This is Taleb’s causal interpretation of the crisis.
Copy Editing at The Washington Post
An article submitted to The Washington Post was subjected to excessive, unnecessary edits — nearly every word replaced by a synonym. The author pulled the piece and gave it to The Financial Times, whose editor made only one correction: changing the year 1989 to 1990. The Washington Post’s over-intervention caused them to miss the only actual mistake.
A MOMENT TO REFLECT
Put it to work.
Can you think of a situation in your own work or life where doing nothing would have been better than intervening? What stopped you from staying inactive?
How does the concept of 'Not Doing Nothing' apply to modern economic policies? What current interventions might be creating hidden fragilities?
Why is it difficult for leaders or experts to justify inaction, even when it is the most beneficial course?
Often confused with
CONTINUE THE CONVERSATION
Source texts
- Antifragile (Nassim Nicholas Taleb)