ET GBS: Fixers, not corruption, slowing India, says Nassim Taleb

Nassim Nicholas Taleb, author of 2007 bestseller The Black Swan, today said India is not a fragile country because it is not centralised. “India’s strength is that it is an extremely democratic country. The only problem it has is a metastatic bureaucracy,” Taleb, who has changed the way the world thinks about risk, told a packed audience at the Economic Times Global Business Summit.

“It is not so much the corruption but fixers who are slowing down India,” he said.

The world’s best known risk expert said that we are better off with frequent shocks and volatility because it prepares us for large blow outs.

The principle applies to people, companies and nations alike. It is a central error to lower variability to lower risk. “Greenspan (former US Fed Reserve Chairmam) had it in his mind that the economy needed fine-tuning to reduce variability. “When you don't go boom and bust, after some time things will collapse,” Taleb said hinting at the collapse of the US economy in 2008.

That is what also happens to companies that prepares with strategic plans. They become “prisoners in their own plans”. That does not give them the optimality to exit from the plan and benefit from changes in the environment, Taleb said.