A few notes / riffs.
Mediocristan: normal distributions.
Extremistan: power law distributions.
Any mechanism that has preferential attachment is by definition Extremistan.
The Extremistan power law is called a log normal.
A power law implies scale free, which implies fractal behavior.
At the critical point in a system, fractal behaviors show up.
Systems tune themselves to criticality automatically.
Criticality is balanced on a knife's edge, the most interesting position to be in.
In a system that's in self organized criticality none of the physical details matter for how it behaves.
Insurance fundamentally assumes Mediocristan not Extremistan.
If it's a power law it's uninsurable because the average goes up to infinity.
This is true only if the extreme phenomena are correlated.
Of course, in a crisis all correlations go to 1.
Only the world of information can live in Extremistan.
You need to be able to replicate the product quickly.
Of course, physical things can also be constructed quickly, on a spectrum.
But the more it requires atoms to be configured the more it will live in Mediocristan.