A central aspect of my philosophical work these days is this: to warn against over-estimating, for example, how much one can learn from past financial crises, in thinking about future financial crises. How much, to put it in more general – and philosophical – terms, one can learn inductively. There is plenty one can learn; but there is also a severe limit on what one can learn. There is a limit, in other words, on the value of evidence.

The danger of not being continually aware of this point is that one may think, at least unconsciously, that there are specific lessons to learn and that, once one has learnt them, then one's job is done and one has genuinely ensured as best one can that there will not be further such crises in the future.

This would be a hubristic stance. Hubris, in the long run, inevitably leads to nemesis.

For we are always going to be living in a social world that defies full comprehension and control. A world that we do not and never will fully understand, as my colleague Nassim N. Taleb puts it, in his 2012 book Anti-Fragile.

The real challenge, the deep thing that one has to learn, is how best to seek safety for the economy, for citizens, in such a world: in a world that one accepts as a world one cannot predict and control.

That we live in such a world is revealed by financial crises. In fact, that might itself be justly said to be the deepest thing one can learn from them. 

This is the challenge we face: to learn to live more safely in a world that we are never going to be able to understand or control or even ‘manage’. This entails a ‘letting-go’.

But the alternative is worse: that, by seeking to manage, to master, our world, we give ourselves a false assurance that all is going to be well, and make it more likely that we will ‘blow up’.

Now: it is of course an excellent thing to seek to learn from history – from the history, for example, of past financial crises. Hyman Minsky and John Maynard Keynes are among the maestros of having done so.

But there is danger in such learning, too. One such danger is what Taleb calls 'the narrative fallacy': falling into the trap of seeing in history an anticipation of all future possibilities, rather than (as one ought to) seeing in history only a tiny sub-section of what could have happened, let alone what might happen in the future.

When seeking to minimise the chances of financial crises in the future, one ought to focus most of one's attention on what can be done to build down the risk of 'black swans’ (Taleb, 2007); rare, devastating, inherently-unpredictable events. By definition, such events are vanishingly rare in the historical record, and what such events there are are only a very poor sample of the possible such events that there could be.

The philosophical work that I am undertaking at present jointly with Taleb is devoted to exploring these and related thoughts in relation to financial crises, and to other such black swans (e.g. in the environmental sphere). In particular, Taleb and I are formulating a version of the Precautionary Principle not vulnerable to the kinds of objections usually made against it (by Cass Sunstein - the author of Nudge, and others).