What is Mediocristan? Where is it? Where does the word come from? What elements of our lives fall under the purview of Mediocristan?
Mediocristan is a term coined by Nassim Nicholas Taleb to explain the facets of our experience that are nonscalable. Mediocristan’s law is: Given a large-enough sample size, no individual event will have a significant effect on the total. The term was popularized by Taleb’s book The Black Swan.
We’ll cover what Mediocristan is, how it differs from Extremistan, and what kinds of events, characteristics, and professions come from the land of Mediocristan.
Scalability and the Provinces of Mediocristan and Extremistan
One reason that Black Swans are so profoundly disruptive is that they occur in the “scalable” parts of our lives—where physical limits don’t apply and effects tend toward incredible extremes. When a particular thing—an income, an audience for a particular product—is “scalable,” it can grow exponentially without any additional expenditure of effort.
“Massage therapist,” for example, is a “nonscalable” profession. There is an upper limit on how many clients you can see—there’s only so much time in a day, and therapists’ bodies fatigue—and thus there’s only so much income you can expect from that profession.
“Quantitative trader,” however, is a “scalable” profession. It takes no additional energy or time to purchase 5,000 shares of a stock than 50, and your income isn’t limited by physical constraints.
Artists, too, are in a scalable profession (at least in the age of digital reproduction). For instance, a singer doesn’t need to perform her hit song each time someone wants to hear it. She performs it once for the record, and that performance can be disseminated widely.
The problem with scalability is that it creates vast inequalities. Let’s look at the singer example again:
- Before the advent of recording technology, a singer’s audience was limited to those for whom she could physically perform. That is, a singer in one town wasn’t likely to prevent the survival of a singer in another town; they might have different sized audiences—based on the populations of their respective towns—and thus different incomes, but those differences would be comparatively mild.
- After the advent of recording technology, however, a small number of singers come to dominate the listening public. Now that we can pay pennies to stream Beyoncé any time we want, why spend the $10 or $20 to see a local singer we’ve never heard of? Suddenly, differences in audience and income become vast. With scalability comes extremes.
The Contrary Worlds of Mediocristan and Extremistan
“Mediocristan”: Taleb’s term for the facets of our experience that are nonscalable. For example, like the income of a massage therapist, human physical traits such as height and weight hail from Mediocristan—they have upper and lower bounds, and if you were to graph every human’s height and weight, you would produce a bell curve.
Mediocristan’s overriding law can be stated thus: Given a large-enough sample size, no individual event will have a significant effect on the total. That is, there will be outliers—extremely heavy or tall people—but those outliers (1) will not be exponentially larger or smaller than the average, and (2) will be rendered insignificant by the sheer number of average cases. Most physical phenomena—human footspeed, trees’ rate of growth—come from Mediocristan. (Shortform note: Taleb sometimes treats Mediocristan as a distinct place, other times as an adjective to describe certain kinds of phenomena.)
“Extremistan,” oppositely, describes those facets of our experience that are eminently scalable. In Extremistan, inequalities are vast enough that one instance can profoundly affect the total.
Most social (man-made) phenomena come from Extremistan. For example, wealth: It has no readily detectable upper limit; and if you were to include, say, Jeff Bezos, in any average of human wealth, you would produce a grossly distorted picture of how much money most people have.
|Key Qualities of Mediocristan||Key Qualities of Extremistan|
|Most members are dwarfs, a few are |
|Best-off are |
only marginally better
|Best-off are considerably better off |
|Events are predictable from |
|Events are highly unpredictable from |
|Probability distribution is a bell |
|Probability distribution accords either |
with Mandelbrotian “Gray” Swans or is
dominated by Black Swans
The Limits of the Bell Curve
The classic bell curve—which is also called the “Gaussian distribution” after German mathematician Carl Friedrich Gauss—is an accurate description of Mediocristan phenomena, but it is dangerously misleading when it comes to Extremistan.
Consider human height, an eminently Mediocristan phenomenon. With every increase or decrease in height relative to the average, the odds of a person being that tall or short decline. For example, the odds that a person (man or woman) is three inches taller than the average is 1 in 6.3; 7 inches taller, 1 in 44; 11 inches taller, 1 in 740; 14 inches taller, 1 in 32,000.
It’s important to note that the odds not only decline as the height number gets further and further away from the average, but they decline at an accelerating rate. For example, the odds of someone being 7’1” are 1 in 3.5 million, but the odds of someone being just four inches taller are 1 in 1 billion, and the odds of someone being four inches taller than that are 1 in 780 billion!
Now consider an Extremistan phenomenon like wealth. In Europe, the probability that someone has a net worth higher than 1 million euros is 1 in 62.5; higher than 2 million euros, 1 in 250; higher than 4 million, 1 in 1,000; higher than 8 million, 1 in 4,000; and higher than 16 million, 1 in 16,000. The odds decrease at a constant, rather than accelerating, rate, indicating that their distribution doesn’t conform to a bell curve.
(Note: The European wealth statistics cited above aren’t precise, but they illustrate the central point: that wealth is scalable and does not look like a bell curve.)
The upshot is that in Extremistan, as the name suggests, extreme events have much better odds of occurring than in Mediocristan. Simply put, the bell curve does not apply.
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