Misc notes on Nassim Nicholas Taleb’s The Black Swan

The excerpts I found the most interesting are below, with an occasional comment or attempted connection.

The beast…. is the drive to “focus” on what makes sense to us. Living on our planet, today, requires a lot more imagination than we are made to have. We lack imagination and repress it in others.

Like Wendell Berry, Taleb often criticized the ills of overspecialization, but from completely different angles.

History is opaque. You see what comes out, not the script that produces events, the generator of history. There is a fundamental incompleteness in your grasp of such events, since you do not see what’s inside the box, how the mechanisms work. What I call the generator of historical events is different from the events themselves, much as the minds of the gods cannot be read just by witnessing their deeds. You are very likely to be fooled about their intentions.
This disconnect is similar to the difference between the food you see on the table at the restaurant and the process you can observe in the kitchen.
The human mind suffers from three ailments as it comes into contact with history, what I call the triplet of opacity. They are:
a. the illusion of understanding, or how everyone thinks he knows that is going on in a world that is more complicated (or random) than they realize;
b. the retrospective distortion, or how we can assess matters only after the fact, as if they were in a rearview mirror (history seems clearer and more organized in history books than in empirical reality); and
c. the overvaluation of factual information and the handicap of authoritative and learned people, particularly when they create categories – when they “Platonify”.

Taleb spends a lot of the first part of the book talking about humans amazing ability to confidently come up with explanations of why something happened after the fact, usually in ways that imply that we obviously would have seen it coming if we had been paying attention. We want to feel in control so we exercise control over history by over-explaining things that maybe have no other explanation than luck (or I would add, divine providence).

Scientists may be in the business of laughing at their predecessors, but owing to an array of human mental dispositions, few realize that someone will laugh at their beliefs in the (disappointingly near) future.

Taleb grew up as an Orthodox Christian in Lebanon, though he is mostly an agnostic today. Still he frequently takes pot shots at those who put too much faith in contemporary science and he does not ridicule the religious, which is definitely refreshing.

Information WANTS to be reduced – either into stories we can understand, or into smaller chunks we (or robots) can handle.

We reduce too much information into stores because then we can remember it. Computers have to do the same thing (or rather we help them do the same thing) because you can’t do jack with too much non-boiled-down data.

People in professions with high randomness (such as in the markets) can suffer more than their share of the toxic effect of look-back stings: I should have sold my portfolio at the top; I could have bought that stock years ago for pennies and I would now be driving a pink convertible; et cetera. If you are a professional, you can feel that you “made a mistake,” or, worse, that “mistakes were made,” when you failed to do the equivalent of buying the winning lottery ticket for your investors, and feel the need to apologize for your “reckless” investment strategy (that is, what seems reckless in retrospect).

This is a good reminder. We needn’t have scruples for things we truly can’t control. We needn’t beat ourselves up and feel guilty for things that nobody could have seen coming, even if people accuse us of being reckless for not seeing it coming in the first place. Much understanding can only exist in hindsight. There will always be someone to chastise you for not saving enough money, even if you are the greater miser in the world. You have to draw the line somewhere.

Making $1 million in one year, but nothing in the preceding nine, does not bring the same pleasure as having the total evenly distributed over the same period, that is, $100,000 every year for ten years in a row. The same applies to the inverse order – making a bundle the first year, then nothing for the remaining period. Somehow, your pleasure system will be saturated rather quickly, and it will not carry forward the hedonic balance like a sum on a tax return. As a matter of fact, your happiness depends far more on the number of instances of positive feelings, what psycholigists call “positive affect,” than on the intensity when they hit. in other words, good news is good news first; HOW good matters rather little. So to have a pleasant life you should spread these small “affects” across time as evenly as possible. Plenty of mildly good news is preferable to one single lump of great news.

I know this is a pop psychology gem of dubious value, but it sounds more or less true to me. It makes me wonder if our presentation of the Gospel of Christ breaks down sometimes because we present it as this ONE BIG GOOD THING, but fail to articulate how it is also a thousand little good things every day. It might have more felt power in that form.

The irony of the author whose manuscript is rejected by a publisher who never read it and then years later, after he has become somewhat famous for a different book he wrote, the same manuscript is accepted for publication by another publisher who also didn’t read it. Nobody has read it.
(Paraphrase from p.105)

Good stuff here about knowledge being invisible when we don’t count it or it can’t be counted in contrast with opposite data points. The example he gives is from the world of medicine, where the problem is especially pronounced.

Our neglect of silent evidence kills people daily. Assume that a drug saves many people from a potentially dangerous ailment, but runs the risk of killing a few, with a net benefit to society. Would a doctor prescribe it? He has no incentive to do so. The lawyers of the person hurt by the side effects will go after the doctor like attack dogs, while the lives saved by the drug might not be accounted for anywhere.
A life saved is a statistic; a person hurt is an anecdote. Statistics are invisible; anecdotes are salient.
Silent evidence can actually bias matters to look less stable and riskier than they actually are. Take cancer. We are in the habit of counting survival rates from diagnosed cancer cases – which should overestimate the danger from cancer. Many people develop cancer that remains undiagnosed, and go on to live a long and comfortable life, then die of something else, either because their cancer was not lethal or because it went into spontaneous remission. Not counting these cases biases the risks upward.

Think how this relates to everyone dumping their bad news of Facebook, linking ranting news articles, and snide memes. It makes it look like the world is burning up, but it’s only telling a tiny slice of the story.

The appearance of busyness reinforces the perception of causality, of the link between results and one’s role in them.

A great tribute to engineers here, and a shout out to the value of dinking around verses building toward a defined purpose.

Engineers tend to develop tools for the pleasure of developing tools, not to induce nature to yield its secrets. It so happens that SOME of these tools bring us more knowledge; because of the silent evidence effect, we forget to consider tools that accomplished nothing but keeping engineers of the streets. Tools lead to unexpected discoveries, which themselves lead to other unexpected discoveries. But rarely do our tools seem to work as intended; it is only the engineer’s gusto and love for the building of toys and machines that contribute to the augmentation of our knowledge. Knowledge does not progress from tools designed to verify or help theories, but rather the opposite. The computer was not built to allow us to develop new, visual, geometric mathematical objects that few cared to look for. Nor was the computer invented to let you chat with your friends in Siberia, but it has caused some long-distance relationships to bloom. As an essayist, I can attest that the Internet has helped me to spread my ideas by bypassing journalists. But this was not the state purpose of its military designer.
The laser is a prime illustration of a tool made for a given purpose (actually no real purpose) that then found applications that were not even dreamed of at the time. It was a typical “solution looking for a problem.” Among the early applications was the surgical stitching of detached retinas. Half a century later, The Economist asked Charles Townes, the alleged inventor of the laser, if he had had retinas on his mind. He had not. He was satisfying his desire to split light beams, and that was that. In fact, Townes’s colleagues teased him quite a bit about the irrelevance of his discovery. Yet just consider the effects of the laser in the world around you: compact disks, eyesight corrections, microsurgery, data storage and retrieval – all unforeseen applications of the technology.
We build toys. Some of those toys change the world.

It has been bothering me lately how we overuse the word ‘random’ in casual conversation. However, reading Taleb’s discussion of how “true” randomness rarely matters (outside of fields like cryptography perhaps) has quelled my fears!

A true random system is in fact random and does not have predictable properties. A chaotic system has entirely predictable properties, but they are hard to know. So my answer to them is dual.
a) There is no functional difference in practice between the two since we will never get to make the distinction – the difference is mathematical, not practical. If I see a pregnant woman, the sex of her child is a purely random matter to me (a 50 percent chance for either sex) – but not to her doctor, who might have done an ultrasound. In practice, randomness is fundamentally incomplete information.
b) The mere fact that a person is talking about the difference implies that he has never made a meaningful decision under uncertainty – which is why he does not realize that they are indistinguishable in practice.
Randomness, in the end, is just unknowledge. The world is opaque and appearances fool us.

Randomness as incomplete information: simply, what I cannot guess is random because my knowledge about the causes is incomplete, not necessarily because the process has truly unpredictable properties.

Living in big cities is invaluable because you increase the odds of serendipitous encounters – you gain exposure to the envelop of serendipity. The idea of settling in a rural area on grounds that one has good communications “in the age of the Internet” tunnels out of such sources of positive uncertainly. Diplomats understand that very well: casual chance discussions at cocktail parties usually lead to big breakthroughs – not dry correspondence or telephone conversations. Go to parties! If you’re a scientists, you will chance upon a remark that might spark new research. And if you are autistic, send your associates to these events.

Oh, you can just learn everything on the internet right? I can just work from home and do all the things, right? I like to think that, but when I read anything like this on the value of serendipitous connections, it makes me want to move to, say Ethiopia, or at least stay in the city I’m at rather than move to the deep forest.

I will repeat the following until I am hoarse: it is contagion that determines the fate of a theory in social science, not its validity.

Sooooooo, true.

Objects seem to have invisible but significant auxiliary functions that we are not aware of consciously, but that allow them to thrive – and on occasion, as with decorator books, the auxiliary function becomes the principal one.

Many readers (say, those who work in forecasting or banking) do not often understand that the “actionable step” for them is to simply quit their profession and do something more ethical.

I love that Taleb is able to at least entertain the idea that when faced with a problem, the solution might be to just quit because WHAT YOU ARE TRYING TO DO IS EVIL. I think the religious formation of his childhood did him good, even if he doesn’t openly acknowledge it today.

“iatrogenics” – harm caused by the need to use quantitative models

What a great word. Apparently this is Taleb’s version of Iatrogenesis, (“brought forth by the healer”). That is, bad stuff that happens when you try to quantify stuff. If one is to critique modern science, this is perhaps the most fruitful branch to explore.

You cannot do anything with knowledge unless you know where it stops, and the costs of using it. Post-Enlightenment science, and its daughter superstar science, were lucky to have done well in (linear) physics, chemistry, and engineering. But at some point we need to give up on elegance to focus on something that was given short shrift for a very long time: the maps showing what current knowledge and current methods do not do for us; and a rigorous study of generalized scientific iatrogenics, what harm can be caused by science (or, better, an exposition of what harm has been done by science). I find it the most respectable of pursuits.

How do you live long? By avoiding death. yet people do not realize that success consists mainly in avoiding losses, not in trying to derive profits. Positive advice is usually the province of the charlatan. Bookstores are full of books on how someone became successful; there are almost no books with the title What I Learned Going Bust, or Ten Mistakes to Avoid in Life. Linked to this need for positive advice is the preference we have to DO SOMETHING RATHER THAN NOTHING, even in cases when doing something is harmful.

Sometimes, maybe often, doing nothing or just holding the current course really is the best advice. But we don’t like that answer. It requires more patience (and perhaps trust) than we feel we have.

Things that have worked for a long time are preferable.

Economic life should be definancialized. We should learn not to use markets as warehouses of value: they do not harbor the certainties that normal citizens can require, in spite of “expert” opinions. Investments should be for entertainment. Citizens should experience anxiety from their own businesses (which they control), not from their investments (which they do not control).

This is good stuff when it comes to community building. For example, instead of stashing away as many pennies as you can in your 401K, what if you invested in your relationships with your children enough that when you get old and feeble later, they would welcome you coming to live with them. Crazy I know, but this is how most of the world has done it for millennia.

I also wonder if this can be extrapolated to argue that we should not worry about the federal government (which we also do not really control!?).

For learning to read other languages:

Seneca should be read in the original Latin. Trying to read him in English is the equivalent of reading Yeats in Swahili.
p.378 (paraphrase)

You need a story to displace a story. Metaphors and stores are far more potent (alas[!]) than ideas; they are also easier to remember and more fun to read. If I have to go after what I call the narrative disciplines, my best tool is narrative. Ideas come and go, stories stay.

I know this to be true, though it is very hard for me to put into practice. I love ideas. I don’t really love stories. But my own writing and especially sermons would be better if I told more stories. I’ve talked to more than a few good preachers that also lament this (since they also love ideas more than stories), but who force themselves to be better communicators regardless.

The fact that stories are especially needed in these times to drive out lies or previously planted deceptions should be reason enough to learn the craft.