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    Middle East
     Dec 8, 2012


BOOK REVIEW
Hirsute iconoclasts
Joseph Anton - A Memoir by Salman Rushdie.
Antifragile: Things that gain from Disorder by Nassim Nicholas Taleb Reviewed By Chan Akya

"The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man." - George Bernard Shaw (1856 - 1950)

Salman Rushdie's book came out a couple of months ago and Nassim Nicholas Taleb's was published at the end of November. In the event, I ended up reading the two books simultaneously on


 
my e-reader, essentially jumping between the two narratives at random intervals.

Initially designed to maximize my reading activity by going across genres, this exercise produced an unintended consequence, namely an examination of the core similarities between the two bearded authors besides their rejection of and by the conventional authors of their own genres, and an examination of within their life histories the context of grand opposition from folks who can be called establishment figures, merely for want of a better narrative.

Truly perhaps, both authors may be horrified to be hyphenated in an article that pretends to be a book review; but such descriptions - reductionism as either may have termed it derisively - also help to frame a wider construct wherein the rules of modern society and many of its activities may have to be rewritten to incorporate the effects of these iconoclasts.

Background
It goes against the very grain of both books for any reviews to examine their background in detail; as both books are in effect about the backgrounds of the authors. Rushdie provides a description of the events leading up to the infamous death sentence imposed on him by Ayatollah Khomeini; while Taleb provides a background to his examination of events that were termed low-probability but were anything but both in terms of frequency and severity.

I do not wish to deprive the authors of any revenues from the sales of the books by providing an easy summary of their books here; this is after all a review and so will attempt a critical evaluation of the ideas. It is interesting to note that both authors voyage not so much in the unknown as the unprovable - one deliberately as an author of fiction and the other who started out covering the world of finance before going on a deeper metaphysical journey.

There are other coincidences: this is Taleb's third major book after Fooled by Randomness and while it was Rushdie's third major work after Midnight's Children and Shame, which got the author into a spot of trouble that is dealt with in Joseph Anton - A Memoir, one could even begin to see other patterns.

At the heart of both books is an invisible and unmoving "other" - an orthodoxy if you will, arising from the specific spheres of operation of the two protagonists. Rushdie operated in the literary sphere, where he was attempting to bring in his own culture as a contextual background over which he applied the literary liberations that a comfortable Western education and an uncomfortable economic existence had taught him. In his case, the other was basically a group of cultures covering billions of people - India, Islam - that had not been subject to intelligent and critical attacks from the inside as much as they had from the outside.

A confluence of factors including the rise in oil prices and the demographic decline of the West was pushing more geopolitical power towards the east, with both Islam and later India to emerge as potential winners; hence any sense of recidivist doubt particularly expressed by one's own was bound to rankle. As India struggled through democracy after a nasty interruption in the 1970s that was to scar certain individuals in the ruling party, the country reacted with an overly sensitive approach to Midnight's Children. Later, in Iran, having lost a war with Iraq and facing internal dissent, the Ayatollah needed a cause that was bigger than Iran and something that could be turned to his advantage. Rushdie provided that with his Satanic Verses.

Equally, there was an accident in how it came about; namely the Iranian awards bestowed on Rushdie's previous works (through their illegally translated Farsi versions) were the main reason the new book was simply imported and stocked up in Tehran. Absent a previous success, it is unlikely that the new book would have ever made its way to the country. This is randomness, the very subject of Taleb's work then and hence.

For Taleb, it was a different kind of orthodoxy but orthodoxy nevertheless as it controlled hundreds of billions in funds swishing around the world, all invested and with an applied investment approach that relied on deliriously faulty risk and financial modelling. It was possible and indeed it was de rigueur for a number of faulty financial and business models to still produce generational benefits to its practitioners in effect allowing the orthodoxy to take hold with greater charm.

The decline of Japanese stock markets from 1989, the fall of communism all energized investments into the US market; while the dotcom bubble and sundry accounting collapses - Sunbeam, Worldcom, Enron - were dismissed as aberrations to what was a generically important story. Thus 20 years after Rushdie's Midnight's Children was published, when the financial world was looking at reasons behind certain crises, it discovered an author who had previously been dismissed as part of a niche tendency. With Fooled by Randomness in 2001, Taleb provided the spark that was to light a thousand fires in the world of finance.

Conceptually, the two authors took on holy cows and took them to the woodshed, to use the rather colorful American expression. The central idea of Islam which Rushdie attacked was the logical follow through in the Satanic Verses episode - namely a critical evaluation of whether what was called poison by the scholars was actually the core of an undiscovered original book of the divine; while what replaced it was the work of the "other": ergo questioning the notion of what is "good" in a binary setting and then proceeding to examine the other qualities of "good" that were singularly absent in this narrative. The poetic license of an author allowed Rushdie to take various flights of fancy within this tortured construct.

This evaluation of counter-logic to the prevailing consensus is also a feature of Taleb's work: in his case, looking at how financial managers approach the concept of uncertainty and how they attempt to deal with it by identifying as an aberration: not dissimilar (again, conceptually) to the few verses in the holy book, unknown volatility was just a random event that needed no special preparation or intense questioning by fund managers.

Yet it was the frequency and severity of these random events that posed the biggest problem to long-term performance; and in effect disallowed the wider managed funds industry to outperform passive benchmarks; much less the performance of these artificially constructed benchmarks themselves against what would have constituted "acceptable" returns for the kinds of risks being exposed by the very random events.

This is delicious intellectual introspection, but completely poisonous to anyone without a sense of humor, particularly if that someone were to occupy a position of power the legitimacy of which was derived from the very religious or financial fallacy that was being examined in the book(s).

The central ideas of what I shall call "traditional" Islam and finance (namely the concepts that acquired legitimacy fairly recently) themselves belie the criticisms of the past. Ibn Rushd, after whom the Rushdie pater named himself and his children, was a noted polymath hailing from the time that Islam ruled over Spain; his application of rational thought to Islam was controversial enough in its time; but did spawn internal discussions.

Notably, Ibn Rushd also faced hardships from the orthodoxy of his time although they stopped at denial of court privileges for the great man (ironically Rushdie suffered an opposite fate, namely a death sentence that has been arguably compensated to some degree by a greater intellectual acceptance of his views during his own lifetime). In the context of finance, the notion of risk versus uncertainty goes back to Frank Knight, but its modern day applications through Brownian motion assumptions were (and are) essential simplifications to present concepts within the technological limitations of the time in the 1970s and 1980s. Go back even to the previous orthodoxy in finance, namely the Graham & Dodd school of investing, and one is encouraged to avoid statistical malarkey even as the authors grudgingly accepted the works of John Burr Williams and his ilk on the focus towards "intrinsic" value or fundamental analysis.

Thought processes

The primary focus of the new books is therefore the radical afterthought that comes from post-trauma. Rushdie defends his life's works and brings out a stirring defense of intellectual freedom in his work; the fundamental requisite of a civilized society is how it treats its dissenters. Taleb goes one step further by arguing for a pursuit of the anti-fragile - things that actually become stronger and better because of the very stresses imposed on them by modern society. In a way, he could have been talking about Rushdie's ideas (and perhaps even Rushdie himself) without quite realizing the connection.

That crux is what unites the two books - the pursuit of independent enquiry and a focus on what lies outside the conventional and normal body of thought; what passes as consensus in other words. The notion that the world of finance is a deeply unhappy place now doesn't need much amplification - Taleb doesn't show a way out, but does provide a framework for how to construct such a pathway. Islamic societies around the world have been rocked from within ever since the Arab Spring spilled into the streets; a question that hasn't been addressed by the angry youth is the direction of their anger at authorities, who have used Islam as a way to keep themselves in power rather than as a support mechanism for the downtrodden of society. Perhaps some of the young angry people in the Middle East should attempt to read Rushdie's new book and figure out the application of free will and thought in their own circumstances.

"Vested interests" to use a popular phrase of conspiracy theorists may have much to lose and nothing to gain from a wider discussion of these two books. Given what we have witnessed over the past few years, it appears to be the best possible time for exactly such an evaluation. Perhaps Random House - which coincidentally published both books - could arrange a joint tour of the two hirsute authors and take them to various places together.

I am not quite sure which part of that tour would be the most risky - addressing a gathering of bankers and financial experts in New York or a social gathering in Cairo.

Notes:

1. Joseph Anton - A Memoir by Salman Rushdie. Random House, September 2012. ISBN-10: 0812992784. US$30. 656 pages.


2. Antifragile: Things that gain from Disorder by Nassim Nicholas Taleb. Random House, November 2012. ISBN-10: 1400067820. US$30. 544 pages


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