Mulboyne wrote:The question is not, therefore, which system better avoids "Black Swan" events, but which one can cope with the fact that they happen. You could argue that Japan's rapid industrialization during the Meiji restoration is evidence that the country and culture is highly adaptive to randomness. I can't say I'm certain either way.
Could Japanese society be primed to better cope psychologically with Black Swan events due to the prevalence and past history of extreme natural (and occasionally man-made) disasters that have hit the country?
I've only skimmed the book, but on the topic of such disasters, Taleb notes that a massive earthquake today would have significantly greater economic impact than, for example, the 1923 Tokyo quake:
Clearly, weather related and geodesic events (such as tornadoes and earthquakes) have not changed much over the past millennium, but what have changed are the socioeconomic consequences of such occurrences. Today, an earthquake or hurricane commands more and more severe economic consequences than it did in the past because of the interlocking relationships between economic entities and the intensification of 'network effects'. Matters that used to have mild effects now command a high impact. Tokyo's 1923 earthquake cased a drop of about a third in Japan's GNP. Extrapolating from the tragedy of Kobe in 1994, we can easily infer that the consequences of another such earthquake in Tokyo would be far costlier than that of its predecessor.
Now imagine if The Big One hits in the next few weeks or months as the world is struggling with the current financial crisis. It would be the perfect storm of economic havoc. Reminds me of an old book -- "Sixty Seconds That Will Change the World: How the coming Tokyo earthquake will wreak worldwide economic devastation"
