BOOK
REVIEW Hirsute
iconoclasts Joseph Anton
- A Memoir by Salman
Rushdie. Antifragile: Things that
gain from Disorderby 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
(Copyright 2012 Asia Times
Online (Holdings) Ltd. All rights reserved. Please
contact us about sales, syndication and
republishing.)
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
