It is not every day one learns a new word – or is brought face to face with a word one should have learned back in Statistics class instead of wasting time gazing at co-eds legs: leptokurtic distributions.
A leptokurtic distribution has what is commonly referred to as “fat tails”. Consequently, a leptokurtic return in investing means that risks are coming from outlier events – those now famous “black swans”.
Naturally, the concept can be applied also to the quality of government (with a bit of a stretch), as Martin Hutchinson attempts through historical analysis on his blog:
The Bear’s Lair: 24 Years of Malpolitics! | True Blue Will Never Stain (tbwns.com)
“Government quality is not randomly distributed, but leptokurtic – good and bad trends tend to perpetuate themselves. In so doing, they resemble stock market and real estate malinvestment, as Austrian economists put it.”
Who among us knew that the expression “a chicken in every pot” actually stems from King Henry IV of France in the early 1600s, because of his aspirations for his people? Is incompetent democracy automatically better than benign autocracy?
The hopeful implication of Hutchinson’s analysis is that nothing lasts forever – not even bad government.