I am in the business of detecting fragility. I am going to tell you the US business is weak. The banking system is still weak and now we are transferring weakness to the governments... We are facing an environment where a huge amount of debt is going to break the economy. The next mistake would be overprinting, which will lead to hyper inflation. I think the centre of the world is moving away from the West towards Russia and, of course, to countries that don't have debt. Even Dubai, which has a lot of debt, is borrowing to put up impressive buildings, but America is borrowing to eat. Europe is also in deep trouble. So we have the post-Enlightenment Industrial Revolution wave. Europe is starting to fall apart towards a more conservative, robust model of less integration and less globalisation. We must stop relying on exports and instead build robustness.
India is more robust than the US. People in the US have high incomes but they are addicted to a high level of debt, a high level of spending supported by an incompetent government. There are several countries with a high level of GDP that are very fragile. The US is a lot more fragile than, say, the erstwhile Soviet Union. London is a lot more fragile than India.
There was no breakdown of order in Soviet Russia. There was no efficiency. Agriculture in the Soviet Union was inefficient. Stalin tried to make it efficient and he couldn't. You can't have, like in America, one centre that makes all the oranges; one centre that has all the wheat; one or two places that have all the apples. Every city had around it enough agriculture to be self-sufficient.
In India, you have the same. In America, for every calorie you consume you have nine calories of energy wasted in transportation. In Russia, it is less than one calorie. This makes Russia very robust during a crisis. Also, lack of social mobility means living in the same place with people who have known each other for two or three generations. So there is a build up of trust. You have that in the provinces, except in a couple of big cities like Mumbai and Bangalore. In America, most people live in suburbs, very few are inefficient and most of their friends are on Facebook. So, there are a lot of other elements which make America very fragile. Also, people in the West have so much debt. So, GDP is meaningless.
The nation-state is a very modern invention, very unstable and, of course, has led to a lot of problems. If you remember, 1914 was not an exceptionally good year for nation-states, so it is a modern invention. The city-state was a very robust model. The nation-states require a big government, and governments, as we have seen in the US, keep swelling and go out of control and then they wage wars. We saw what happened to the Soviet Union. So, hopefully big states will fall apart and will go back to the old model of city states. Sorry, but this is life. Something big typically becomes a lot more fragile.
...I don't think anybody understands the Internet. I don't know the fragility of the Internet. All I know is that I make sure that I print anything that I need to retrieve. We are physically a lot more fragile because technology makes us softer. We are not exposed to thermal variations. That makes you more fragile. You are not exposed to strain in your systems. So, we are weaker than our ancestors. I think that the next super germ would be one with long incubation period. It will not kill its host immediately, we will let it spread. This is why I am worried about the Internet.
— Nassim Nicholas Taleb, Philosopher and Expert on Risk
(Based on Taleb's speech at the Conclave)