Risk Experts Who Predicted 2008 Financial Crash Believe GMOs To Be Riskier Than 2008 Crash
“The G.M.O. Experiment, Carried Out In Real Time
and with Our Entire Food and Ecological System As Its Laboratory, Is
Perhaps the Greatest Case of Human Hubris Ever”
Image: Painting by Anthony Freda: www.AnthonyFreda.com
Risk analyst Nassim Nicholas Taleb predicted the 2008
financial crisis, by pointing out that commonly-used risk models were
wrong. Taleb – a distinguished professor of risk engineering at New
York University, and author of best-sellers The Black Swan and Fooled by
Randomness – Taleb became financially independent after the crash of
1987, and wealthy during the 2008 financial crisis.
Taleb noted last year that most boosters for genetically modified foods (GMOs) – including scientists – are totally ignorant about risk analysis. Taleb said that proliferating GMOs could lead to “an irreversible termination of life [on] the planet.”
This month, Taleb – and tail-hedging expert Mark Spitznagel, who
also made a hugely profitable billion dollar derivatives bet on the
stock market crash of 2008 – wrote in the New York Times:
Before
the crisis that started in 2007, both of us believed that the financial
system was fragile and unsustainable, contrary to the near ubiquitous
analyses at the time.
Now, there is something vastly riskier facing us, with risks that entail the survival of the global ecosystem
— not the financial system. This time, the fight is against the current
promotion of genetically modified organisms, or G.M.O.s.
Our critics held that
the financial system was improved thanks to the unwavering progress of
science and technology, which had blessed finance with more
sophisticated economic insight. But the “tail risks,” or the effect from
rare but monstrously consequential events, we held, had been
increasing, owing to increasing complexity and globalization. Given that
almost nobody was paying attention to the risks, we
set ourselves and our clients to be protected from an eventual collapse
of the banking system, which subsequently happened to the benefit of
those who were prepared.
***
We
were repeatedly told that there was evidence that the system was
stable, that we were in “the Great Moderation,” a common practice that
mistakes absence of evidence for evidence of absence. For the financial
system to be viable, the solution is for it to resemble the restaurant
business: decentralized, with mistakes that stay local and that cannot
bring down the entire apparatus.
Indeed, a Nobel prize-winning economist and many other experts say that too much centralization destabilizes economies and other systems.
Taleb and Spitznagel by pointing out that the GMO-cheerleaders are
making the same anti-scientific arguments as those who said the
financial system was stable prior to 2008:
The
financial system nearly collapsed, but it was only money. We now find
ourselves facing nearly the same five fallacies for our caution against
the growth in popularity of G.M.O.s. [Nearly 80% of all food produced in the U.S. contains GMOs.]
First, there has been a
tendency to label anyone who dislikes G.M.O.s as anti-science — and put
them in the anti-antibiotics, antivaccine, even Luddite category. There
is, of course, nothing scientific about the comparison. Nor is the
scholastic invocation of a “consensus” a valid scientific argument.
Interestingly,
there are similarities between arguments that are pro-G.M.O. and snake
oil, the latter having relied on a cosmetic definition of science. The
charge of “therapeutic nihilism” was leveled at people who contested
snake oil medicine at the turn of the 20th century. (At that time,
anything with the appearance of sophistication was considered
“progress.”)
Second, we are told
that a modified tomato is not different from a naturally occurring
tomato. That is wrong: The statistical mechanism by which a tomato was
built by nature is bottom-up, by tinkering in small steps (as with the
restaurant business, distinct from contagion-prone banks). In nature,
errors stay confined and, critically, isolated.
Third, the
technological salvation argument we faced in finance is also present
with G.M.O.s, which are intended to “save children by providing them
with vitamin-enriched rice.” The argument’s flaw is obvious: In a
complex system, we do not know the causal chain, and it is better to
solve a problem by the simplest method, and one that is unlikely to
cause a bigger problem.
Fourth, by leading to
monoculture — which is the same in finance, where all risks became
systemic — G.M.O.s threaten more than they can potentially help.
Ireland’s population was decimated by the effect of monoculture during
the potato famine. Just consider that the same can happen at a planetary
scale.
We noted in 2009:
It has been accepted science for decades that when all
the farmers in a certain region grow the same strain of the same crop –
called “monoculture” – the crops become much more susceptible.
Why?
Because any bug (insect or germ) which happens to like that particular strain could take out the whole crop on pretty much all of the region’s farms.
For example, one type of grasshopper – called “differential
grasshoppers” – loves corn. If everyone grows the same strain of corn in
a town in the midwest, and differential grasshoppers are anywhere
nearby, they may come and wipe out the entire town’s crops (that’s why
monoculture crops require such high levels of pesticides).
On the other hand, if farmers grow a lot of different types of crops
(“polyculture”) , then a pest might get some crops, but the rest will
survive.
Taleb and Spitznagel conclude:
The G.M.O. experiment, carried out in real time and with our entire food and ecological system as its laboratory, is perhaps the greatest case of human hubris ever. It creates yet another systemic, “too big too fail” enterprise — but one for which no bailouts will be possible when it fails.
In the real world –
using statistical analysis – GMOs are inferior when compared to other
types of food, because GMOs are associated with:
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