In both the oil and Social Security examples, there are powerful long-term trends which mean we should have as much or more confidence in long-term projections than short-term ones: in oil, as a nonrenewable resource, the more efficient the market the closer it will conform to Hotelling’s rule, and in SS, it’s almost entirely driven by locked-in demographics or actuarial factors, and the uncertainty is in how and whether payouts will be modified or revenue increased.
(The latter might be what Taleb is getting at, but since he’s an arrogant blowhard who loves to oversimplify and believes he is right about everything, I am not inclined to be charitable and think he’s making a subtle claim about the different sources of variability and their foreseeability over the short and long run.)
Regardless, Taleb is making the argument: “if we cannot predict something in the short term, we cannot predict it in the long-term” which is not true of many things and may not even be true of his chosen examples.
In both the oil and Social Security examples, there are powerful long-term trends which mean we should have as much or more confidence in long-term projections than short-term ones: in oil, as a nonrenewable resource, the more efficient the market the closer it will conform to Hotelling’s rule, and in SS, it’s almost entirely driven by locked-in demographics or actuarial factors, and the uncertainty is in how and whether payouts will be modified or revenue increased.
(The latter might be what Taleb is getting at, but since he’s an arrogant blowhard who loves to oversimplify and believes he is right about everything, I am not inclined to be charitable and think he’s making a subtle claim about the different sources of variability and their foreseeability over the short and long run.)
Regardless, Taleb is making the argument: “if we cannot predict something in the short term, we cannot predict it in the long-term” which is not true of many things and may not even be true of his chosen examples.