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Economists bullshit for a living : NN Taleb gives Kaushik Basu a lesson on ‘Skin in the Game’

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Nassim Nicholas Taleb is one of the deepest, and more importantly, most independent thinkers of our time. His writings are among the clearest expositions on varied topics such as rationality, religion and minority populations, and these constitute arguably the best debunkings of simplistic but grandiose and judgmental liberal takes on these topics.

Ever sensed something wrong with the “Terrorism kills far fewer people than road accidents or falls from ladders” argument, but struggled to articulate your objection? Many smart people struggle with that too, but here is Taleb demolishing it like kniving through butter. Many of us have pointed out Bollywood’s hypocrisy, selectivity and sanctimony, but to understand the structural mechanics of how that comes about, one has to read Taleb [twitter thread], [article]. One of the few well-known thinkers to emphasize the tolerance of pagan religions, he is also among the rare few that put into practice the idea of distinguishing virtue from virtue-signalling, distinguishing true humility from fake humility/humility-signalling.

In contrast, Kaushik Basu is what Taleb terms Intellectual Yet Idiot (IYI). You may remember him as the economist who did not merely stop at criticizing demonetization (as many economists did) but actually asked that it be rolled back, echoing similar and suspicious demands from Mamata Banerjee. From December 2009 to July 2012, Basu was the Chief Economic Adviser to the Government of India. During that and the immediately following period, Indian economy fell to its worst crisis in over a decade, and the political class was voted out in the 2014 elections. Yet, IYIs like Basu remained unquestioned: they have no accountability, no skin in the game (please read this Taleb article in its original, since it is easy to misinterpret it, e.g., by confusing it with incentives). The main point is that there is no mechanism to punish economists for coming up with disastrous policies: as Taleb notes, from pilots to plumbers, those with a real job can get fired if they do not know their job well or execute it poorly, but the same never happens to tenured economics professors. Basu is a Professor of Economics at Cornell University and occupies a named chair. His PhD was guided by another IYI, Amartya Sen.

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Unsurprisingly, IYI professors leave no stone unturned in using their position to claim expertise (a form of rent-seeking), to lay claim to power without accountability at the expense of those outside their ecosystem. This attitude is reflected in the following tweet of Basu:

It was of course left to Taleb to show Basu his place, by highlighting the crucial missing ingredient, Skin In The Game:

In fact, Basu wasn’t even being original. The very same analogy earlier figured in a condescending and elitist New Yorker cartoon that mocked American citizens’ exercise of the franchise:

Many smart people fell for the too-clever-by-half cartoon, and it was Taleb who injected clarity then:

To familiarize with Basu’s IYI thought patterns, let us take this occasion to visit a few of his previous “gems” on Twitter. Here is an unbelievable one:

Of course, no one in the world ever doubts that a mathematical proof doesn’t further need to be enhanced by data. It is outside the world of mathematics (to which Basu certainly doesn’t belong), where deductive reasoning doesn’t suffice to get us started, that data and facts are needed. One wonders what potent mix of muddle-headedness and arrogance it takes to mix the two worlds like this.

Another tweet showcases his contempt for the average human:

Note the use of the word “high office”, suggesting an attitude at odds thinking of the state as an employee or sevak of the people, and the use of the word “philistinism”, which is a comment on manners, habits and cultural tastes rather than any majoritarianism; the tweet is a naked chauvinistic assertion of cultural superiority.

A third “gem” is a window into the povertarian nature of his mind. He routinely tweets beautiful images from various countries, but when it came to his own home city, Kolkata, here is what he tweeted as an “impressionist’s dream”:

Like many racists from a bygone era, and like many povertarian IYIs, Profesor Basu too has internalized an aesthetic convention wherein western countries are to be represented by beautiful imagery from them (no offense with that per se), but not only in India to be represented by images of its heart-wrenching poverty, but that humiliating poverty, rather than evoking pity, is to be enjoyed as a great work of art. Is it any surprise that his economics is what it is?

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