Friday, 27 April 2018

Risk


Continuing the theme of Nassim Nicholas Taleb's latest book that I'm reading, he says; “One should not mess with a system if the results are fraught with uncertainty, or, more generally, should avoid engaging in an action with a big downside if one has no idea of the outcomes.”

Now, this seems rather obvious advice from someone who studies risk and has implications for the Brexit situation; however, Taleb is, perversely, a supporter of Brexit. It should be said though, that his support for Brexit is not so much that he believes Brexit is a good idea, but that he's convinced the EU will ultimately fail because it has become too intrusive - but doesn't all government fall into that trap?

The wide disparity in economic forecasts proves that economies are extremely complex systems. Forecasts, however imperfect though, are a better guide to action than pure hope. While an economic forecast may be legitimately doubted (it's analogous to weather forecasting - the further one goes out, the less reliable it becomes), the link between price and demand is as close to a fact as you can get and a tariff on something that was tariff-free is a price rise – this is an indisputable fact - and a price rise will reduce demand.

That said, a forecast predicated on trading relationships that do not yet exist (and may never exist) has no more validity than an astrological prediction.

Taking the spark plugs out of a complex system like a car will not produce a faster car, or even a car that behaves like a car. The sensible approach is to secure another set of spark plugs before you remove the originals.


When the UK was outvoted in only 2% of cases, when the government allowed fishermen to sell their quotas abroad, when we’re already selling to the rest of the world, when the cost of membership of the EU is between 1/12th and 1/29th of what we stand to lose in GDP by leaving, when EU accounts have indeed been signed off by auditors, when we don’t send £350m a week to Brussels, when the UK government has as many unelected roles as the EU, when the UK won't be made to pay for future bail-outs, when Turkey stands no chance of joining the EU, when the UK would have a veto on an EU Army, for the average Brexiteer, no matter how much they protest otherwise, the issue was only ever about immigration - currently a thorny issue for Amber Rudd and Theresa May.

While this is a legitimate concern, it's ironic when fully 50% of immigrants are not even from the EU and demonstrates that any problem is a direct result of a failure of successive governments to implement the rules already available to them.

When Brexiteers complain about immigrants blocking access to the NHS, schools and housing - which is totally untrue if, one bothers to look into the facts - it's ironic that we can now no longer recruit NHS doctors and nurses from abroad, leading to an acute shortage of medical staff. The Brexit solution to what was only ever a problem within the confines of Brexiteers' heads has turned the perceived problem into an actual and very real problem that's killing the patient.


1 comment:

  1. Indeed, you are probably right. We are heading for the greater of two evils it would seem. Happy days to come

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