The Fat Tail: The Power of Political Knowledge in an Uncertain World (with a New Preface)

I loved this book. For political economists such as myself, the problems presented by Bremmer & Keat are resounding in academic literature. They present a well-argumented review on risk economics and its shortcomings, as well as possible solutions to skewed models.

Book Review submitted by: Stephen J. Hage, [...]I bought this book because Fareed Zakaria recommended it at the end of one of his Global Public Square (GPS) broadcasts.The authors describe a Fat Tail as being the same as what Nassim Nicholas Taleb described as a Black Swan in his book of the same name. One which, by the way, I bought for the same reason I bought the Fat Tail.Early in the book, the authors, after showing what a fat tail looks like on a graph compared to a normal Gaussian distribution or bell shaped curve made a statement which caught my attention and made reference to Taleb's excellent work."Those who would apply Taleb's theory to political risk face another important problem. Unlike financial, economic, or environmental risks, political risks are usually generated by individuals, people with particular and identifiable sets of motivations and limitations. This makes them predictable--and not black swans. If we can map these incentives and constraints, it is considerably easier to forecast downside risks (and the limitations on upside outcomes.)"I grabbed my pen and wrote in the margin BIG IF!It's hard to argue against the conclusion that political risks are usually generated by individuals. I'm not as sanguine, however, regarding how readily identifiable sets of motivations are in any individual at any given time. And, the moment I hear anyone begin talking about mapping incentives and constraints, alarm bells start going off and red lights start blinking on my danger grid. Human nature, motivations, political advantage and hidden agendas are, under ideal circumstances, at best squishy.When I think of mapping something...anything, I see mental images of scientists, mathematicians or technologists working with sets of data represented by numbers. I see graphs, computers and mathematical models. In this book, I saw none of that.Instead, I saw a series of discussions about events like geopolitics, political risk and capital markets, domestic instability, civil war, state failure and terrorism discussed with anecdotal references to how such events impacted the business of companies and corporations and how they were able to deal with those situations.And, while these discussions were interesting and instructive, in my opinion, they hardly represented even any semblance of the word mapping, as I believe most people understand the term.I found the book disappointing because, as I read it, I couldn't help thinking that what Bremmer and Kent were saying, in addition to their exposition was, we're the ones who know this stuff and, if you are interested in or worried about any of what we've said, maybe you should get in contact with us.Now, maybe that's just me but after making a concerted effort to read the book objectively I can't, in good conscience, recommend it.My strong recommendation for and support of Taleb's Black Swan, however, remains unchanged.

A textbook on understanding political risk, it's complexity and why it should be included I our ERM systems, must read for the risk scholar in sociology.

terrific

It was deliverd in a timmely manner. i was glad because i need for an assignment. would buy again. thanks

This book is better read as an introduction for how to think about political risks. Although there are anecdotes about how companies manage risk, the intellectual framework for risk is not well developed.

EXCELLENT!

Was in great condition!