Indian Union Can Become Antifragile Only by Decentralizing

Pic source: www.canadianbusiness.com

Nassim Nicolas Taleb is a Lebanese-American essayist, scholar and statistician, who shot to fame by his book Fooled by Randomness. The book dealt with human fallibility and was ranked as one of the 75 smartest books of all time by Fortune. He is also well known to have publicly criticized the risk management methods used by finance industry; when financial crisis occured in late-2000, he is said to have profited from it.

Mr. Taleb has been making a career out of understanding and dealing with randomness – his keen area of interest. His business has been to safeguard investors against crises by reaping rewards from rare and less-understood events. In his latest book, titled Antifragile, Mr. Taleb explores the fragility of systems. As the world we live in is random, volatile and disorderly, any system that cannot withstand the random events, Mr. Taleb calls them as fragile. Any system that thrives on such randomness has been classified as antifragile. One thing that is highlighted in all the famous books of Mr. Taleb (Fooled by randomness, Black Swan and Antifragile) is, randomness that is faced by humans daily since their living in wilderness hasn’t changed much even in the current world. In other words, randomness is as natural as rain.

What kind of systems are fragile and what are antifragile?
Based on his observation and research, Mr. Taleb has classified couple of systems as fragile and few as antifragile. The banking system based in New York is classified as fragile, while fail fast startup businesses of silicon valley are classified as antifragile.
As nimble startups of silicon valley encourage mistakes and thrive on them, an idea that cannot continue is cornered sooner and gets scrapped. At the same time, any idea that can continue gets validated sooner and goes on to be a winner; Google or Facebook for instance.
The investment banking system in New York cannot afford many mistakes. Hence, the system grows fragile as days pass. Even the ideas that cannot continue are covered up, and are allowed to exist. Such fragile systems yield to unforeseen random events and collapse; Lehman brothers for example.

How has Mr. Taleb classified the political systems?
In his book Antifragile, Mr. Taleb has called the centralized political system as fragile. He has also called the decentralized political system as antifragile. If one looks to history for centralized political system, the Soviet union is the one to hit the eye first. USSR came into existence in 1922, and was considered one of the world-leaders till the eighties. The centralized system of functioning did provide many results and USSR’s military might was respected around the world. However, as with every centralized political system, Soviet Union was fragile too. The fragility took the better of USSR in 1991, resulting in disintegration.
The American union is much decentralized when compared to the USSR. Since the American civil war that ended in 1865, the united states of America has been a world-leader in many fronts. This observation of the USSR and the USA goes onto validate Mr. Taleb’s thesis that more centralized a political system is, more fragile it is.

Is the Indian union Fragile? 
A centralized political system is what Jawaharlal Nehru envisioned for the Indian union. It is said that Mr. Nehru was very much impressed with the USSR’s centralized planning  and governance. That explains why Mr. Nehru favored setting up planning commission and initiated five-year plans, much like the USSR. This centralized political system continues to exist in the Indian union even today. With only one-third of subjects under the state list in Schedule 7, rest being in the centre-list or the concurrent list, majority of power and say is concentrated at the centre. That makes the Indian union very fragile. Being fragile, the Indian union is vulnerable to random events that will continue to occur in future as well. To make the Indian union antifragile, so that it thrives under randomness and grows strong, decentralization is the right step.

Otherwise, sooner or later, we all will be fooled by randomness.

(This piece had originally appeared in thefedetalist.in)