If every plane crash makes the next one less likely, every bank crash makes the next one more likely. We need to eliminate the second type of error-the one that produces contagion-in our construction of an ideal socioeconomic system. Let us examine Mother Nature once again.
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The natural was built from nonsystemic mistake to nonsystemic mis-take: my errors lifting stones, when I am well calibrated, translate into small injuries that guide me the next time, as I try to avoid pain-after all, that's the purpose of pain. Leopards, who move like a true sym-phony of nature, are not instructed by personal trainers on the "proper form" to lift a deer up a tree. Human advice might work with artificial sports, like, say, tennis, bowling, or gun shooting, not with natural movements.
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Some businesses love their own mistakes. Reinsurance companies, who focus on insuring catastrophic risks (and are used by insurance companies to "re-insure" such non-diversifiable risks), manage to do well after a calamity or tail event that causes them to take a hit. If they are still in business and "have their powder dry" (few manage to have plans for such contingency), they make it up by disproportionately rais-ing premia-customers overreact and pay up for insurance. They claim to have no idea about fair value, that is, proper pricing, for reinsurance, but they certainly know that it is overpriced at times of stress, which is sufficient to them to make a long-term shekel. All they need is to keep their mistakes small enough so they can survive them