Daniel Kahnemann and Nassim Taleb discuss biases at DLD09

An interesting video recording of the conversation between Nassim Taleb and Daniel Kahneman during the DLD09 conference in Munich has been made available on YouTube.

For those who haven't heard about Nassim Taleb and Daniel Kahnemann:

  • Taleb is the author of Fooled by Randomness and The Black Swan, two fantastic books about risk and illusion of control and the role randomness plays in life. I love these two books and they are in my list of all time favorites.
  • Khaneman is probably, after Richard Thaler, one of the world acclaimed psychologists, working on the judgement, behavioral economics, cognitive biases and the process of decision making.
The discussion is interesting if you want to hear about cognitive biases and how the world ignores the statistically improbable but still real events because they cannot be modeled by a bunch of geeky PhDs.

The take-aways in that area are quite interesting. Of course, you should ignore all the fallacies that Taleb spreads when it comes to economics. The more he talks, the more he reveals his lack of understanding of the banking industry, the financial, federal reserve and fiat money system which lead him to suggest socialist non-solutions to the problems ("the banks should all be nationalised", or "you have the right to access your account the same way that you have the right to have water in your house").

The solutions are far more simple: Banks should be allowed to fail, fractional reserve lending should be banned, gold backed currency introduced.

Who said it is a right to have water in the house? The only right you have, if you will, is to pay for someone to sell you running water in your house.

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