Thanksgiving is a festival which Europeans rarely celebrate. And since I had not much to do and the weather was bad, I took some time to ponder about some things.

In particular I thought about the current global situation, why there are so many popular economic misjudgments, and why people seem to have lost any attempt to critically think about them more critically… and I keep thinking about all the possible future outcomes… and due to all the social media talk about Thanksgiving, I was also reminded about the sorrowful life of turkeys… which for many of them comes to an abrupt end on this day. 

This inspired me to have some fun and write a little turkey story, which hopefully also provides some thought-provoking awareness of the precarious situation in which not only turkeys, but most of the world might be in.

Actually, part of the idea for this blog stems from sections of Nassim Taleb’s “Black Swan” and “Antifragile” books, in which he introduces the “Turkey Problem”.

Taleb has a special talent for making parables with meaningful insights making him definitely one of my favorite writers (although I totally disagree with him on his recent comments, writings and positions about Covid, as well as Bitcoin). He uses the “Turkey Problem” to illustrate how wrong conclusions can be drawn from an environment with constant improvements and absence of harm, which in turn might lead to disastrously wrong future projections. As Taleb puts it:

“Consider a turkey that is fed every day. Every single feeding will firm up the bird’s belief that it is the general rule of life to be fed every day by friendly members of the human race “looking out for its best interests,” as a politician would say. On the afternoon of the Wednesday before Thanksgiving, something unexpected will happen to the turkey. It will incur a revision of belief.”

― Nassim Nicholas Taleb, The Black Swan

I see the “Turkey Problem” also as a great analogy to what is globally going on at the moment. Thus, I felt tempted to write a little story to give the “Turkey Problem” my own spin.

So let’s dig in and turn to the world of our beloved thanksgiving turkeys.

The name of our hero is Jack. 

His life so far has been great.

He lives together with his friends on a large farm, providing them with enough space to run and play around all day long. Even better, since they get plenty of food,  they don’t even need to worry about working or finding a job.

In addition, the farm provides shelter where they can retreat on rainy or cold days. It’s just like living in a 5-star hotel.

If that’s not enough, they are protected from possible outside predators and in the rare cases where inside turmoils arise, the farmers will quickly rush in and resolve the dispute so that no harm is done amongst them, hence even the legal structure is magnificent. What a great life!

Sometimes Jack and his friends wonder how life would be beyond the walls and whether it would be worth an attempt to break out and give it a try!?

Some fellow turkeys quickly take the stance that it is “too dangerous” and “not worth taking the risk”. They quickly conclude that giving up the good life they are enjoying is definitely not worth it.

“Look, we have everything we need, what else do you want?” is one argument. “The downside to freedom is responsibility!” reasons another. Another turkey worries that it is “against the rules” and that everyone should “just comply with what the leaders (the farmers) want”. Yet another raises the question of “how would you even get food out there anyway?”.

Nonetheless, Charlie (one of Jack’s friends, who is known for his critical thinking and has always been a contrarian) is not satisfied yet. He actually has a lot of very reasonable arguments and also raises some worrisome questions: “Do you really trust that our leaders have good intentions?”,  “why do they feed us anyway?”, and “wouldn’t it be great to be independent and enjoy some freedom?” He also argues that “taking risks should be a part of being alive!”. 

One day Charlie escapes… (and none of our turkeys will ever find out how his life will go on).

Jack thinks a lot about following him, but he remains undecided.

Anyway, all of his freedom thoughts are crushed and quickly come to a halt when one day a wild turkey is brought into the farm. He tells them horrifying stories about the wilderness life: “There are numerous Predators, food shortages, freezing temperatures and living outside bears burdensome responsibilities everyday”.

Besides, he also ensures the others that the taste and amount of food is much better here on the farm. Moreover, in order to survive, the turkeys outside “need to be very fit and way leaner than in here!” he proclaims and he concludes that he would definitely never go out again!

Jack is now finally convinced that staying inside was the right decision and that he would never worry about breaking out again ― how could he even have had such foolish thoughts anyway ―  everything is fine in here.

As the pleasant life of our turkeys continuously goes on and the food keeps coming everyday, the turkeys feel more and more confident that this will keep going on forever.

Why shouldn’t it? 

The food is coming, the flowers are blossoming and the sun is shining ―  Life is great! Our hero Jack is totally content with his situation ―  and well on his way to achieve Ataraxia! 

Graphically we can look at the life of Jack as follows:

As this keeps going on year by year, our turkeys start to come up with different theories in order to rationalize how all of this is working and also in order to combat and finally eliminate the critical questions once raised by Charlie ― which some of the turkeys still haven’t totally forgotten… yet. 

Some have quite simple explanations: “That’s just how it is.”

Or: “We turkeys are just very special animals, they must just love us”. Some go even further in pointing out that they are “exceptional” and that compared to the other animals on the farm they therefore “deserve” a special treatment.

Another weighs in that “they would never allow food to stop coming, since there are animal rights and regulations which makes them responsible for supplying food and they might be on the line for lawsuits in case they did not”.

Some religious turkeys see it as “God’s will” and abstain from any further considerations. 

The more intellectually-minded turkeys come up with more advanced explanations. For instance, there are some economists among them who come up with scientific models to explain it:

They scribble a lot of different charts with lines, slopes and equations on blackboards and ramble about how the latest government policies and stimulus packages are going to have positive effects, which in turn will increase the aggregate overall well-being and therefore will also result in favorable results for the turkeys.

One specifically applauds the central bank’s continuous increase in the money supply, which sets in effect a “healthy” rate of inflation, enabling price increases and finally higher wages, thus making the farmers more willing to spend more money for their turkeys. He somehow doesn’t explain why the particularly picked rate of inflation is “healthy”, nor does he continue to reason about other effects this might cause. 

Another economist turkey argues that the economy is 70% driven by consumption and that therefore the spending on the turkeys is one important ingredient to keep the economy moving.

A behavioral economist puts forward the theory of the reflexivity theory. He explains that as long as most turkeys have a positive future outlook, this will cause feedback loops of future expectations, which in turn leads to a self-fulfilling outcome of an increasing quality of life.       

A turkey with an MBA does a regression analysis and argues that based on historical data there is basically no risk and also no doubt that life will continue to improve in the future. Showing his charts he explains that the volatility is super low and therefore all of them may rest assured and don’t need to worry. He further points out that given the data, “the sharpe ratio is absolutely stellar”, and if there would be an ETF constructed based on the “Turkey Quality of Life Index”, it should definitely be included in every portfolio.
(Note: that’s actually how risk assessment is taught in investment classes in every MBA program today, which is totally nuts, but that’s a whole different story for another time).

Some of the turkeys simply contribute it all to the great leaders and their benevolent and wise future thinking, while the more historian minded turkeys refer to the Whig-theory: “The world has been a dark place in the past” they explain, “but with time going on things have always become and will always be getting better and better, hence, it’s just a constant upward shaping slope of advancement. And it is supposed to be so.”

There is one very last doubter who still considers the possibility that the farmers at some point might stop with the feeding and paradise might come to an end. He gets asked the question: “Why should they do that?”
He doesn’t have a good answer and finally falls into line agreeing with the others that his doubts have been misplaced and unjustified. There is really nothing he needs to worry about. 

At this point of our story it is important to point out that from the turkeys’ point of view all of these arguments seem totally feasible! After all, among all living turkeys inside the farm, there has never been anyone who experienced something contrary to it. Indeed, all evidence seems to confirm that the prospects of a glorifying future is set in stone.

After some time, the turkeys are noticing that even more food than usually is coming in. They are of course happy about it and none of them is really surprised or largely concerned about it anymore. Some wonder a little, but none of them wastes even a thought on the possibility that it might be the final pampering up (as Thanksgiving is approaching). 

If life was great before, it is getting even better now!

Also the arguments to justify this increase come in rapidly: 

The economists explain that “there is a trickle down effect going on”, and that the increase in wealth occurring in society also justifies the increased feeding of turkeys. 

Another one refers to “the exponential developments in the technology sector” which in turn have exponentially increased the methods and output of food production.

The MBA turkey explains to the others how compounding works. 

Jack doesn’t really care a lot about it, he just likes the way things are going.

But one day this all changes ―  dramatically!

It is Thursday, November 25th 2021.

As Jack wakes up to another great day he is not yet aware of the things that are gonna unfold over the coming hours. 

Strangely, today there is no breakfast coming, but instead the man that usually brings in the food insteads leads Jack together with the other turkeys to a part of the farm-complex and into a room where they have never been before. As time passes and the turkeys are waiting, there is whispering among them wondering what promising surprise is getting prepared for them. Jack whispers to his friends that it must be some very special thing. He considers several possible gifts: is it some special food? Or maybe a new more comfortable home? Since the turkeys’ consciousness is solely based on their experience, they are very excited for some very special treatment.

…And they are going to get it.

Now, one of the turkeys gets led out of a door into another room. The other turkeys go on to excitedly whisper and make suspicions of what goodies it is probably gonna receive. 

“I can’t wait, I wanna be the next” shouts out one of the turkeys ― and Jack thinks the same.

The turkeys are starting to move closer and closer to the door, so that the area in front of the miraculous room is exceedingly getting clogged.

Suddenly strange sounds occur…

…a scream…

…some feathers are blowing through the door.

The atmosphere instantly becomes quiet.

It has not fully set in yet what has just happened, but the nervosity among the remaining turkeys is quickly rising. Something seems suspicious here.

As the second turkey is led away, Jack is not so certain anymore whether he wants to be the next one.

…Another scream…

…some more feathers… 

As the third turkey disappears behind the door, the realization of what’s happening here sets in among our turkey crowd.

The next scene is one of total panicking setting in: crying, screaming and scrambling over each other, the turkeys are rushing towards the remaining doors.

But they are all closed. 

There is no way to escape their destiny anymore. The turkeys are finally facing their day of reckoning. 

One after one is taken away. And then it is Jack’s turn.

His last thought is about Charlie. What might he be doing right now!?

I will spare the reader the exact details of what happens next, but expressed in our chart, it looks like this:

Unfortunately, this story has no happy ending as our hero Jack finally has to face his day of reckoning and his life comes to an abrupt end.

Feeling as great as never before, being at the absolut zenith of his life, and then waking up one day and his head gets chopped off.

Taleb would describe this as the black swan event. What a shame. 

5 Key takeaways:

I hope that everyone had a happy Thanksgiving.