The Voice of the Outsider
By Arnold Kling
Russ Roberts interviews Nassim Taleb in a fast-paced discussion. They kick around a number of interesting ideas. One of them is that leverage is linked to overconfidence. When you believe you can predict the future, you borrow a lot. When you doubt the future, you do not.
Taleb is also a fan of small firms. He sees large firms as inherently fragile. He may be right from a social point of view. As an individual, if you want a stable job or a stable supplier, you may actually find that it is riskier to depend on a small firm. In any event, I agree with him that we should let the market decide.
Once again, let me rant that the Insider view of finance is that our biggest financial firms did socially destructive things and took in profits that were not merited–but it is really, really important that they keep doing what they have been doing with as much continuity as possible! Taleb takes the classic Outsider view, which is that they are fragile and we are better off without them.
There are many more ideas, and you can see where Taleb is willing to offend people and risk seeming silly to people. Near the end, you can hear him stating a preference for what I would call Outsider status.