WHY DECENTRALIZED STATES ARE MORE STABLE. Taleb’s principle that reducing small risks can increase the severity of low probability events explains why decentralized states are more stable. The Zero Hedge post quotes him: “Although centralization reduces deviations from the norm, making things appear to run more smoothly, it magnifies the consequences of those deviations that do occur….In other words, centralization decreases local risks, such as provincial barons pocketing public funds, at the price of increasing systemic risks, such as disastrous national-level reforms.”

For Taleb, the autocratic Arab states which went from seemingly tight control to chaos are examples of the vulnerability of centralized systems.

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