Ancient Black Swan Randomness
BY CEES BRUGGEMANS
Long before Nassim Taleb came onto the modern scene and gave us the concepts of ‘Black Swan’ (extreme uncertainty offering us fat-tailed risk with a difference) and ‘fooled by randomness’ (luck), there is at least one ancient author who basically expressed the same ideas.
If only we had listened earlier and been forewarned. Imagine the pickings.
Herodotus of Halicarnassus, popularly identified as the first true historian who invented this field of study, wrote his ‘The Histories’ nearly 2,500 years ago.
Early on in the work, he tells of Solon, the wise Athenian, visiting Croesus, the rich despot-ruler of Lydia (south modern Turkey), a self-made man in every respect and remembered to this day in the saying ‘as rich as Croesus’.
Croesus deeply craved affirmation. After giving Solon a tour of the royal treasuries and pointing out the richness and magnificence of everything, Croesus praised Solon’s wisdom, wanting to know the identity of the happiest man he had ever seen.
Croesus supposed himself to be the happiest of men. Solon, however, refused to flatter and answered truthfully “An Athenian called Tellus”.
Taken aback, and after demanding an explanation, duly given, Croesus tried again, thinking he would at least be awarded second prize. No such luck. “Two young men of Argos”, came the answer, with yet more convincing explanation as to why.
Croesus was vexed, snapping: “That’s all very well, my Athenian friend; but what of my own happiness? Is it so utterly contemptible that you won’t even compare me with mere common folk like those you have mentioned?”
And here is Solon’s reply:
“Croesus, I know God is envious of human prosperity and likes to trouble us; and you question me about the lot of man. Listen then: as the years lengthen out, there is much both to see and to suffer, which one would wish otherwise.
Take seventy years as the span of a man’s life: those seventy years contain 25,550 days, and not a single one of them is like the next in what it brings.
You can see from that, Croesus, that man is entirely a creature of chance. You seem to be very rich, and you rule a numerous people; but the question you asked me I will not answer, until I know that you have died happily.
Great wealth can make a man no happier than moderate means, unless he has the luck to continue in prosperity to the end.
Many very rich men have been unfortunate, and many with a modest competence have had good luck.
The former are better off than the latter in two respects only, whereas the poor but lucky man has the advantage in many ways; for though the rich have the means to satisfy their appetites and to bear calamities, and the poor have not, the poor, if they are lucky, are more likely to keep clear of trouble, and will have besides the blessings of a sound body, health, freedom from trouble, fine children, and good looks.
Now, if a man thus favoured dies as he has lived, he will be just the one you are looking for: the only sort of person who deserves to be called happy.
But mark this: until he is dead, keep the word “happy” in reserve. Till then, he is not happy, but only lucky.
Nobody, of course, can have all these advantages: no man is ever self-sufficient. There is sure to be something missing.
But whoever has the greatest number of the good things I have mentioned, and keeps them to the end, and dies a peaceful death, that man, Croesus, deserves in my opinion, to be called happy.
Look to the end, no matter what it is you are considering. Often enough, God gives a man a glimpse of happiness, and then utterly ruins him”.
Herodotus then tells us how these sentiments were not of the sort to give Croesus any pleasure. Croesus let Solon go with cold indifference, firmly convinced that he was a fool. For what could be more stupid than to keep telling him to look at the ‘end’ of everything, without any regard to present prosperity?
Here, one perhaps may want to add a modern footnote that Croesus was very much a precursor of what was to follow in his footsteps in millennia to come. He was indeed thoroughly modern by today’s standards, the more is the pity for we seemingly have learned nothing yet, as also suggested by Nassim Taleb.
Uncertainty is total, luck everything. And then we die.
” Cees Bruggemans is Chief Economist of First National Bank
