Skin in the Game – chapter drafts by Nassim Taleb(fooledbyrandomness.com)
fooledbyrandomness.com
Skin in the Game – chapter drafts by Nassim Taleb
http://fooledbyrandomness.com/SITG.html
130 comments
For somebody who wrote 'Fooled by ..' one of my favorite books of all time, he certainly doesn't seem to suffer from self-doubt when it comes to stating his personal hypotheses. I can look past his condescending tone (especially towards the wealthy and 'pseudo' intellectuals), but his certitude in his own ideas -- especially after pressing home the point that we are surrounded by randomness -- tarnishes his punditry in my view.
I read Fooled and Black Swan and I'm just going to admit it: I don't get it. I mean, I think I understood both books. But can someone explain why they're supposed to be so revelatory? I found them to be... something else.
Many, many smart people seem to swear by Fooled. Why? What am I missing?
Many, many smart people seem to swear by Fooled. Why? What am I missing?
I liked both and learned significant things from both. Haven't yet read anti-fragile.
In particular, the idea that the financial models (think Black Scholes and Long Term Capital Management) are based on seriously bad (e.g., non-fractal) ways of thinking about the way that the world works. The incident where Mandelbrot detected the prices of cotton to have an element involving some unexpected exponent (one sixth? memory isn't bringing that up). The standard way of thinking about these facts admit that they can't handle that. Thus, much of the way risk is modeled is like the guy looking for his lost ring under the street lamp even though he lost it half a block down. "At least there is light here."
Who else is telling us that bell curves and current risk models don't work? Not CNBC, Yahoo, Fox.
Another thing that I took away was how uncomfortable financially successful people are with the idea that luck is a significant component, perhaps even more than their talent and business skill.
Insofar as the issue of his tone or arrogance is concerned, I don't get that. Is it possible that when we complain about an adversary or messenger with bad "tone" or "arrogance" that there is something in the message that we don't like? Certainly he is direct and blunt in his approach. Doesn't put me off.
I feel like it is similar to the reaction that many classically trained engineers when confronted with chaos theory. The world can't possibly be that "random". Except that there is some deep beauty in this oddly-named "Chaos" theory that lends exceptional stability to many phenomenon.
And on the topic of Chaos, it is interesting to go back to James Gleick's Chaos: Making a New Science and read the part about how "there is no climate". Essentially, there isn't anything that guarantees us that the whole system won't just float off arbitrarily into a new Ice Age. Contemplate that in today's debate about climate change. That is, if you postulate that there is "global warming" (renamed to the more apparently less controversial "climate change") and get everybody to agree, what do you do? Is it not possible, in a chaotic system that is moving to a new attractor, that actions we take, like cutting in half carbon emissions, might have a totally unexpected effect? That would be my bet. Kind of a complicated decision to make in a heated political arena, populated by tribes of one sort or another, don't you think?
So the lesson from Swan and Fooled, in the large, to me, are "your models for how stuff works is likely busted, particularly if your income depends on you believing in them."
But then I am just a simple country boy.
In particular, the idea that the financial models (think Black Scholes and Long Term Capital Management) are based on seriously bad (e.g., non-fractal) ways of thinking about the way that the world works. The incident where Mandelbrot detected the prices of cotton to have an element involving some unexpected exponent (one sixth? memory isn't bringing that up). The standard way of thinking about these facts admit that they can't handle that. Thus, much of the way risk is modeled is like the guy looking for his lost ring under the street lamp even though he lost it half a block down. "At least there is light here."
Who else is telling us that bell curves and current risk models don't work? Not CNBC, Yahoo, Fox.
Another thing that I took away was how uncomfortable financially successful people are with the idea that luck is a significant component, perhaps even more than their talent and business skill.
Insofar as the issue of his tone or arrogance is concerned, I don't get that. Is it possible that when we complain about an adversary or messenger with bad "tone" or "arrogance" that there is something in the message that we don't like? Certainly he is direct and blunt in his approach. Doesn't put me off.
I feel like it is similar to the reaction that many classically trained engineers when confronted with chaos theory. The world can't possibly be that "random". Except that there is some deep beauty in this oddly-named "Chaos" theory that lends exceptional stability to many phenomenon.
And on the topic of Chaos, it is interesting to go back to James Gleick's Chaos: Making a New Science and read the part about how "there is no climate". Essentially, there isn't anything that guarantees us that the whole system won't just float off arbitrarily into a new Ice Age. Contemplate that in today's debate about climate change. That is, if you postulate that there is "global warming" (renamed to the more apparently less controversial "climate change") and get everybody to agree, what do you do? Is it not possible, in a chaotic system that is moving to a new attractor, that actions we take, like cutting in half carbon emissions, might have a totally unexpected effect? That would be my bet. Kind of a complicated decision to make in a heated political arena, populated by tribes of one sort or another, don't you think?
So the lesson from Swan and Fooled, in the large, to me, are "your models for how stuff works is likely busted, particularly if your income depends on you believing in them."
But then I am just a simple country boy.
> Insofar as the issue of his tone or arrogance is concerned, I don't get that. Is it possible that when we complain about an adversary or messenger with bad "tone" or "arrogance" that there is something in the message that we don't like? Certainly he is direct and blunt in his approach. Doesn't put me off.
Wasn't a substantial part of Black Swan a story about a fake novelist writing a novel that people didn't like and wouldn't publish or something? It's been a while so I don't remember the details but it was pretty clearly Taleb coyly describing how he couldn't take editorial criticism.
There was also a lot of shit talking about sycophants, and then talk about how Benoit Mandlebrot was so smart that he thought Von Neumann was not that bright, and Mandlebrot likes Taleb so therefore Taleb's work must be super important.
I don't think any of that falls under the category of being direct and blunt in making an intellectual argument. It's just extraneous ego-driven bullshit.
The climate stuff is unrelated but worth making a short note on. The physics of climate change (not called that because it's less politically controversial, but because it's an umbrella term that describes a host of related phenomena that aren't solely an increase in temperature) are obviously complicated but not completely chaotic. As a professional (caveat emptor!) geoscientist I would phrase it that the longer-term changes are more linear but the shorter-term changes are less so, described quite nicely by you: "'Chaos' theory that lends exceptional stability to many phenomenon.' That being said, there is certainly a fair amount of stochasticity in the system but cutting carbon emissions by half (back to 1977 levels) just is not going to result in ice bulldozing Omaha. Really. It wouldn't be adding a new attractor, but it might be bringing one on a little more slowly.
But then again I'm just Ozark trailer trash...
Wasn't a substantial part of Black Swan a story about a fake novelist writing a novel that people didn't like and wouldn't publish or something? It's been a while so I don't remember the details but it was pretty clearly Taleb coyly describing how he couldn't take editorial criticism.
There was also a lot of shit talking about sycophants, and then talk about how Benoit Mandlebrot was so smart that he thought Von Neumann was not that bright, and Mandlebrot likes Taleb so therefore Taleb's work must be super important.
I don't think any of that falls under the category of being direct and blunt in making an intellectual argument. It's just extraneous ego-driven bullshit.
The climate stuff is unrelated but worth making a short note on. The physics of climate change (not called that because it's less politically controversial, but because it's an umbrella term that describes a host of related phenomena that aren't solely an increase in temperature) are obviously complicated but not completely chaotic. As a professional (caveat emptor!) geoscientist I would phrase it that the longer-term changes are more linear but the shorter-term changes are less so, described quite nicely by you: "'Chaos' theory that lends exceptional stability to many phenomenon.' That being said, there is certainly a fair amount of stochasticity in the system but cutting carbon emissions by half (back to 1977 levels) just is not going to result in ice bulldozing Omaha. Really. It wouldn't be adding a new attractor, but it might be bringing one on a little more slowly.
But then again I'm just Ozark trailer trash...
I don't think any of that falls under the category of being direct and blunt in making an intellectual argument. It's just extraneous ego-driven bullshit
I probably can't strongly disagree with that. And you are probably right about the fake novelist--it has been some time.
Certainly Mandelbrot was one who got seriously delayed recognition for his contributions. As did Lorenz for his remarkable discovery that he couldn't get anyone to pay attention to.
I don't disagree that both Mandelbrot and Taleb are/were arrogant. I would rather pay attention to someone who is arrogant and smart rather than arrogant and stupid.
Your statement obviously complicated but not completely chaotic intrigues me. The reading I have done on the topic suggests that weather systems are to their core chaotic. I wonder if there is additional reading you can point to that suddenly cutting carbon emissions by half won't result in Omaha getting hammered. This conclusion does in fact seem to be the one that anti-climate-change-deniers have reached. The massive increase in carbon dioxide into the system is an impulse that seems to have moved the attractor in a scary direction. Why wouldn't a massive impulse in the opposite direction do the same?
An engineer, not a climate scientist.
I probably can't strongly disagree with that. And you are probably right about the fake novelist--it has been some time.
Certainly Mandelbrot was one who got seriously delayed recognition for his contributions. As did Lorenz for his remarkable discovery that he couldn't get anyone to pay attention to.
I don't disagree that both Mandelbrot and Taleb are/were arrogant. I would rather pay attention to someone who is arrogant and smart rather than arrogant and stupid.
Your statement obviously complicated but not completely chaotic intrigues me. The reading I have done on the topic suggests that weather systems are to their core chaotic. I wonder if there is additional reading you can point to that suddenly cutting carbon emissions by half won't result in Omaha getting hammered. This conclusion does in fact seem to be the one that anti-climate-change-deniers have reached. The massive increase in carbon dioxide into the system is an impulse that seems to have moved the attractor in a scary direction. Why wouldn't a massive impulse in the opposite direction do the same?
An engineer, not a climate scientist.
I think the most important thing is to not conflate weather and climate. Weather is a local, relatively instantaneous, open system whereas climate is global, long-term and less open.
Weather is chaotic in part because energy can be rapidly brought into or removed from a weather system like a storm (a storm can go from over ocean to over land, or encounter hot and wet or cold and dry air, or the incoming solar radiation can change because of sunrise/sunsets), because internal circulation and lateral boundary conditions are really important (Navier-Stokes) and because water phase transitions (freezing/melting, evaporation/precip/sublimation) are all rapid and can account for a big chunk of the available energy.
The earth's climate is a bit different. Incoming energy from the sun doesn't change that rapidly--the sun has some 'weather' patterns and then there are earth's own orbital patterns that very regularly over periods from 23,000 to 100,000 years (Milankovitch cycles). But these are changes of a few % over long term. Very different than a hurricane hitting land or afternoon sun causing microscale convective systems to intiate. Greenhouse gases can change the amount of energy lost to either direct reflection of incoming short-wavelength solar radiation or later, long-wavelength radiation (i.e. radiation of energy that was initially absorbed rather than straight reflected), and again these changes are a few % net. Additionally, the earth's climate can't interact with any other climates, unlike weather systems.
There are some other things to keep in mind particularly about ice ages, ice sheets and changing greenhouse gas emissions. First, the timescales are important. Unlike some chaotic math functions, the changes to the global ice balance is mediated by the processes involved. Melting of ice sheets can happen as quickly as the ice can absorb heat--this is relatively fast. However, continental ice sheets don't grow by freezing of liquid water (we're talking Antarctica/Greenland/ the Laurentide ice sheet that covered northern North America, not the Arctic seasonal sea ice which is minuscule in comparison and can't cover land). Continental ice sheets grow by slow accumulation of snow. So this takes a lot of time relative to melting (tens of thousands of years).
>The massive increase in carbon dioxide into the system is an impulse that seems to have moved the attractor in a scary direction. Why wouldn't a massive impulse in the opposite direction do the same?
Because we're still moving in the same direction by reducing emissions, just less rapidly. We'd be changing the sign of the second derivative, not the first, much less the root function (CO2 through time). A good way to think about it is a big pot of water over a heat source. The climate is the broad distribution of heat in the system, the major convection cells, etc. The weather is the eddies and other turbulence. What we're doing by modifying greenhouse gases is changing how much the lid on top of the pot is covering the pot. Slowing emissions is more or less just covering the pot more slowly. Now, there are feedbacks in the climate system (more clouds mean more reflection of solar radiation, etc.) but in general we're still adding insulation to the system which is really unlikely to cause major, long-term cooling.
What worries me is direct, large-scale climate engineering: doing things to block incident solar radiation, etc. rather than reducing greenhouse gas emissions (this also won't help ocean acidification and other major ecological issues). I think the possibility of unforeseen consequences is much, much higher than going back to emissions levels that have been observed recently. Like Ol' Dirty Bastard said, "let's take it back to seventy-nine".
Weather is chaotic in part because energy can be rapidly brought into or removed from a weather system like a storm (a storm can go from over ocean to over land, or encounter hot and wet or cold and dry air, or the incoming solar radiation can change because of sunrise/sunsets), because internal circulation and lateral boundary conditions are really important (Navier-Stokes) and because water phase transitions (freezing/melting, evaporation/precip/sublimation) are all rapid and can account for a big chunk of the available energy.
The earth's climate is a bit different. Incoming energy from the sun doesn't change that rapidly--the sun has some 'weather' patterns and then there are earth's own orbital patterns that very regularly over periods from 23,000 to 100,000 years (Milankovitch cycles). But these are changes of a few % over long term. Very different than a hurricane hitting land or afternoon sun causing microscale convective systems to intiate. Greenhouse gases can change the amount of energy lost to either direct reflection of incoming short-wavelength solar radiation or later, long-wavelength radiation (i.e. radiation of energy that was initially absorbed rather than straight reflected), and again these changes are a few % net. Additionally, the earth's climate can't interact with any other climates, unlike weather systems.
There are some other things to keep in mind particularly about ice ages, ice sheets and changing greenhouse gas emissions. First, the timescales are important. Unlike some chaotic math functions, the changes to the global ice balance is mediated by the processes involved. Melting of ice sheets can happen as quickly as the ice can absorb heat--this is relatively fast. However, continental ice sheets don't grow by freezing of liquid water (we're talking Antarctica/Greenland/ the Laurentide ice sheet that covered northern North America, not the Arctic seasonal sea ice which is minuscule in comparison and can't cover land). Continental ice sheets grow by slow accumulation of snow. So this takes a lot of time relative to melting (tens of thousands of years).
>The massive increase in carbon dioxide into the system is an impulse that seems to have moved the attractor in a scary direction. Why wouldn't a massive impulse in the opposite direction do the same?
Because we're still moving in the same direction by reducing emissions, just less rapidly. We'd be changing the sign of the second derivative, not the first, much less the root function (CO2 through time). A good way to think about it is a big pot of water over a heat source. The climate is the broad distribution of heat in the system, the major convection cells, etc. The weather is the eddies and other turbulence. What we're doing by modifying greenhouse gases is changing how much the lid on top of the pot is covering the pot. Slowing emissions is more or less just covering the pot more slowly. Now, there are feedbacks in the climate system (more clouds mean more reflection of solar radiation, etc.) but in general we're still adding insulation to the system which is really unlikely to cause major, long-term cooling.
What worries me is direct, large-scale climate engineering: doing things to block incident solar radiation, etc. rather than reducing greenhouse gas emissions (this also won't help ocean acidification and other major ecological issues). I think the possibility of unforeseen consequences is much, much higher than going back to emissions levels that have been observed recently. Like Ol' Dirty Bastard said, "let's take it back to seventy-nine".
Thanks for the long and seriously thoughtful post.
So, let's not block out sunlight.
Do you have a sense of what a reasonable approach is? It seems that most of the public attention is on reducing greenhouse gasses. Except for the methane, which I understand is much more effective a greenhouse gas than CO2, as emitted from cows. Your argument that we are adjusting the second derivative is convincing.
What is your recommendation for correction--more than just reducing greenhouse gasses?
So, let's not block out sunlight.
Do you have a sense of what a reasonable approach is? It seems that most of the public attention is on reducing greenhouse gasses. Except for the methane, which I understand is much more effective a greenhouse gas than CO2, as emitted from cows. Your argument that we are adjusting the second derivative is convincing.
What is your recommendation for correction--more than just reducing greenhouse gasses?
The biggest thing for me, apart from emissions reduction, is habitat preservation. The climate is always shifting of course, and humans will be OK (some populations will suffer, some will benefit but probably fewer, but we won't go extinct from this). However, limiting the contribution of climate change to the very real wave of anthropogenic extinctions is pretty important. Habitat loss is the most important here because the ecological health of an area is superlinearly related to its intact area; large areas are necessary for apex predators and migratory populations, but larger areas are much better at absorbing point-source disturbances, and allowing for spatial shifts in ecology as coastlines move uphill, streams and lakes dry up, etc. The individual communities can adjust more easily if they're not squeezed.
Healthy communities mean that populations are less likely to be decimated by some of the 'chaotic', nonlinear problems that accompany climate change. For example, slight warming of winter temps mean that bark beetles can move much farther north and ravage forests. Stressed forests can't deal as well which causes massive tree dieoffs of a species or two, leading to lots of standing dead timber which helps fires spread, killing the other tree species that were less susceptible to the beetles. Etc.
Healthy communities mean that populations are less likely to be decimated by some of the 'chaotic', nonlinear problems that accompany climate change. For example, slight warming of winter temps mean that bark beetles can move much farther north and ravage forests. Stressed forests can't deal as well which causes massive tree dieoffs of a species or two, leading to lots of standing dead timber which helps fires spread, killing the other tree species that were less susceptible to the beetles. Etc.
There is no HN comment better than one that opens with Navier-Stokes and ends with O.D.B.
>> GP: But then I am just a simple country boy.
Then you end with.
> But then again I'm just Ozark trailer trash...
Both of you folks make a lot of solid points and then end with such humility. Don't know what to make of it, is that sort of a deliberate Anti-Taleb (i.e. contrarian) style? :-) ... In any case its very refreshing. Please carry on.
Then you end with.
> But then again I'm just Ozark trailer trash...
Both of you folks make a lot of solid points and then end with such humility. Don't know what to make of it, is that sort of a deliberate Anti-Taleb (i.e. contrarian) style? :-) ... In any case its very refreshing. Please carry on.
Yeah, that's the message I got. Maybe I'm just too receptive to that idea? I felt like, for the number of words and metaphors he spent, there must be some subtlety I was missing.
I learned from Black Swan about how pervasive power laws and fractals were in social/financial phenomena, and how the important the framing (i.e. the prior expectations) of 'black swan' events are (black swan event for the turkey who gets beheaded, not for the farmer that does it every Thanksgiving). I'm a geophysicist and this stuff is our bread and butter, as a ton of risk and complexity theory applies to earthquakes (self-similarity, power laws, etc.) but I had never really made the connection to the human side of things, which I still thought about on a more atomic/psychological level than a systems level at that point. Since then I've read more widely in complexity, econ, etc., and while Taleb wasn't an introduction per se, or even that influential, I did learn some important things from him by virtue of reading him early on. Your friends might be in the same position.
The book itself was fairly repugnant. The few interviews I've read since have been interesting in that you can watch him self-destruct. For example the Edge.org interview where he answers the question of 'what scientific idea needs to be retired' with 'standard deviation'.
However, by far the best part of reading Black Swan (or some interview?) was his discussion about how he believed the body adjusted to regular but not random exercise, and therefore the best fitness strategy was to randomly break into a sprint when walking. I haven't been to NY since and would prefer not to but if I do go I really want to see him pinballing through bewildered pedestrians.
The book itself was fairly repugnant. The few interviews I've read since have been interesting in that you can watch him self-destruct. For example the Edge.org interview where he answers the question of 'what scientific idea needs to be retired' with 'standard deviation'.
However, by far the best part of reading Black Swan (or some interview?) was his discussion about how he believed the body adjusted to regular but not random exercise, and therefore the best fitness strategy was to randomly break into a sprint when walking. I haven't been to NY since and would prefer not to but if I do go I really want to see him pinballing through bewildered pedestrians.
I think Black Swan was mostly propelled forward by its extremely poignant timing: It was published just before the financial crash, an event it seemed to describe in pretty high detail.
Also, I liked it. I felt it did very a good job of describing some important concepts in statistics and epistemology that weren't obvious to me at the time. YMMV, especially if you (unlike me) paid much attention in college maths and statistics.
Also, I liked it. I felt it did very a good job of describing some important concepts in statistics and epistemology that weren't obvious to me at the time. YMMV, especially if you (unlike me) paid much attention in college maths and statistics.
> I think Black Swan was mostly propelled forward by its extremely poignant timing: It was published just before the financial crash, an event it seemed to describe in pretty high detail.
If true that's ironic, since Taleb is the first to say that the mortgage crisis and the associated problems were not black swans (they were predictable).
If true that's ironic, since Taleb is the first to say that the mortgage crisis and the associated problems were not black swans (they were predictable).
That's sounds strange. It's been a while since I've read it, but as I recall it, black swan events are inherently predictable (they are explicitly different from truly unpredictable events), it's just that human nature struggle to intuitively process their low probability and round it off to zero - which makes their impact so much greater if they do end up happening.
Which is exactly what happened in the financial crash. All of the mortgage investors assumed a worst case scenario of zero growth in house prices. If they had modelled even a modest decline, the fragility would have been exposed.
Which is exactly what happened in the financial crash. All of the mortgage investors assumed a worst case scenario of zero growth in house prices. If they had modelled even a modest decline, the fragility would have been exposed.
In Taleb's words:
For the last 12 years, I have been telling anyone who would listen to me that we are taking huge risks and massive exposure to rare events. I isolated some areas in which people make bogus claims --epistemologically unsound. The Black Swan is a philosophy book (epistemology, philosophy of history & philosophy of science), but I used banks as a particularly worrisome case of epistemic arrogance --and the use of "science" to measure the risk of rare events, making society dependent on very spurious measurements. To me a banking crisis --worse than what we have ever seen -- was unavoidable and NOT A BLACK SWAN, just as a drunk and incompetent pilot would eventually crash the plane. And I kept receiving insults for 12 years!
(http://www.fooledbyrandomness.com/imbeciles.htm)
In other places I've seen Taleb acknowledge that he was not the only one who predicted the problems.
For the last 12 years, I have been telling anyone who would listen to me that we are taking huge risks and massive exposure to rare events. I isolated some areas in which people make bogus claims --epistemologically unsound. The Black Swan is a philosophy book (epistemology, philosophy of history & philosophy of science), but I used banks as a particularly worrisome case of epistemic arrogance --and the use of "science" to measure the risk of rare events, making society dependent on very spurious measurements. To me a banking crisis --worse than what we have ever seen -- was unavoidable and NOT A BLACK SWAN, just as a drunk and incompetent pilot would eventually crash the plane. And I kept receiving insults for 12 years!
(http://www.fooledbyrandomness.com/imbeciles.htm)
In other places I've seen Taleb acknowledge that he was not the only one who predicted the problems.
Fooled by randomness is his best book, but it's probably getting replaced by Robert Frank's book "Success and Luck" on my recommendation list for that topic.
It's just a good reminder that you might be luckier than you think and that skill doesn't fully explain the successful achievements.
Black Swan is seriously hard to read through; his arrogance is insufferable. The point he's making is fairly self evident; the book just got published at a very appropriate time.
You can get by without reading, or thinking about, his writings. He doesn't deserve the level of fame he has achieved by all standards.
It's just a good reminder that you might be luckier than you think and that skill doesn't fully explain the successful achievements.
Black Swan is seriously hard to read through; his arrogance is insufferable. The point he's making is fairly self evident; the book just got published at a very appropriate time.
You can get by without reading, or thinking about, his writings. He doesn't deserve the level of fame he has achieved by all standards.
I also found his arrogance in Black Swan insufferable - enough that I lost all taste for his writing. I saw him talk in person in my building when he was promoting Anti-Fragile, and I was also not impressed. Do you still recommend I read Fooled By Randomness?
Read Success and Luck by Robert Frank instead
I would.
Do you think highly of Mandebrot? Clearly a deep thinker. Most of his writings are filled with his self references.
Do you think highly of Mandebrot? Clearly a deep thinker. Most of his writings are filled with his self references.
My own academic papers have a decent number of self references, too. But there is an enormous difference between referencing your own work, and telling the reader that the author is brilliant and those other people over there are stupid.
Ok, so what your call be about Benoit pointing out how smart he is making me feel non-brilliant?
What so you think of this one star review of success and luck (from Aaron):
http://www.amazon.com/gp/aw/cr/0691167400/?filterByStar=one_...
I did not analyze it carefully, but he tears the book to bits.
http://www.amazon.com/gp/aw/cr/0691167400/?filterByStar=one_...
I did not analyze it carefully, but he tears the book to bits.
It's a legitimate criticism, but he's arguing a strawman.
First off, the reviewer's coinflip analogy is deeply flawed. If you take a million draws from a binomial distribution, it's not going to end up the same as a million draws from an exponential distribution. That has an even deeper meaning when you, as an individual, are one random draw from said distribution, especially if you want to live in a society that considers itself "fair" (whatever that may mean).
Now Frank is not arguing against inequality. Frank is an economist, and almost no serious economist is against inequality as a whole concept (though many are against extreme inequality and, importantly, social immobility) because inequality is what you'd call "incentive compatible".
Frank's policy proposal is consistent and sane, but it will rub some the wrong way, as any policy proposal does. I'm certainly in favor of it; consumption is a better target for progressive taxation than most of what has been proposed this election season. That's the part that got the reviewer so riled up. I'm guessing the reviewer is not a professional economist.
The idea of a progressive consumption tax is consistent with microeconomic theory, too. People value things in an ordinal (not cardinal) manner, and at a sufficiently high level of income this means consumption has to be conspicuous to some degree (that's Veblen's whole insight).
Of course, political feasibility of the policy proposal is one thing, and certainly many worse policies are more politically feasible, as exemplified by how rubbed that reviewer has been by Frank's book.
The main difference between this book and Taleb's book is that Franks book is "Successful people are lucky, here's a policy proposal" and Taleb's book is "Successful people are lucky and also everyone is dumb and I'm so smart"
First off, the reviewer's coinflip analogy is deeply flawed. If you take a million draws from a binomial distribution, it's not going to end up the same as a million draws from an exponential distribution. That has an even deeper meaning when you, as an individual, are one random draw from said distribution, especially if you want to live in a society that considers itself "fair" (whatever that may mean).
Now Frank is not arguing against inequality. Frank is an economist, and almost no serious economist is against inequality as a whole concept (though many are against extreme inequality and, importantly, social immobility) because inequality is what you'd call "incentive compatible".
Frank's policy proposal is consistent and sane, but it will rub some the wrong way, as any policy proposal does. I'm certainly in favor of it; consumption is a better target for progressive taxation than most of what has been proposed this election season. That's the part that got the reviewer so riled up. I'm guessing the reviewer is not a professional economist.
The idea of a progressive consumption tax is consistent with microeconomic theory, too. People value things in an ordinal (not cardinal) manner, and at a sufficiently high level of income this means consumption has to be conspicuous to some degree (that's Veblen's whole insight).
Of course, political feasibility of the policy proposal is one thing, and certainly many worse policies are more politically feasible, as exemplified by how rubbed that reviewer has been by Frank's book.
The main difference between this book and Taleb's book is that Franks book is "Successful people are lucky, here's a policy proposal" and Taleb's book is "Successful people are lucky and also everyone is dumb and I'm so smart"
Okay, so I haven't read the book but I read the scathing review - and I think your rebuttal isn't quite fair.
You started to address the review but switched to ad hom attacks to discredit the reviewer - when in reality the reviewer is a past financial professor who works in risk management, and makes some very salient points about the logic behind the books claims.
Even what you say about sampling binomial vs. exponential populations isn't quite relevant, because as a coin or a person, you're not going to be switching between such distributions when sampling.
You started to address the review but switched to ad hom attacks to discredit the reviewer - when in reality the reviewer is a past financial professor who works in risk management, and makes some very salient points about the logic behind the books claims.
Even what you say about sampling binomial vs. exponential populations isn't quite relevant, because as a coin or a person, you're not going to be switching between such distributions when sampling.
Sorry about the ad homs; the reviewer used moral/philosophical instead of technical reasons to argue against (except that point on simulations), so I assumed he was a riled up layperson. I read his review too fast, I guess.
The reviewer's point is this:
"Finally, the author is not asking me to personally give more money to the government, he wants me to support forcing other people to do it. But those other people have average luck, by definition "
But that's wrong; if the tax is progressive, and you take it as given that the successful are lucky, then you are in fact taxing the lucky with a progressive tax. The question is targeting the tax correctly.
The reviewer's point is this:
"Finally, the author is not asking me to personally give more money to the government, he wants me to support forcing other people to do it. But those other people have average luck, by definition "
But that's wrong; if the tax is progressive, and you take it as given that the successful are lucky, then you are in fact taxing the lucky with a progressive tax. The question is targeting the tax correctly.
The reviewer had a few more points than just that, such as how the author not only fails to point out that luck is correlated with success, but contradicts himself.
Even in that statement you quoted out of context, the reviewer is referring to how we all have the same amount of luck, so luck alone shouldn't be the basis for a progressive tax.
Now, there are good reasons for a progressive tax, but the reviewer is saying it doesn't justify ignoring illogical arguments in the book. Just because the conclusion is proven right somewhere else doesn't mean that all arguments for it are valid.
Even in that statement you quoted out of context, the reviewer is referring to how we all have the same amount of luck, so luck alone shouldn't be the basis for a progressive tax.
Now, there are good reasons for a progressive tax, but the reviewer is saying it doesn't justify ignoring illogical arguments in the book. Just because the conclusion is proven right somewhere else doesn't mean that all arguments for it are valid.
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It's all about when it was done. Before the GFC everyone believed that if you were rich you were smart and the opposite. If you challenged this you were a loser.
Then along came a cranky old uncle, who had no business being in the building, except that he did.
Turns out he had a point and now we consider these ideas trivial.
Today if you say all people are born equal and deserve equal rights 99% of the world will agree. There was a time when this wasn't true.
What you say + when you say it = what it's worth
Then along came a cranky old uncle, who had no business being in the building, except that he did.
Turns out he had a point and now we consider these ideas trivial.
Today if you say all people are born equal and deserve equal rights 99% of the world will agree. There was a time when this wasn't true.
What you say + when you say it = what it's worth
The books are interesting, but I think that the reason that a lot of people actually 'swear by them' is because they give 'smart people' a very nice excuse for any failings they might see in themselves.
what do you think the "it" is that you're missing?
the thesis is pretty simple: reasoning about randomly distributed events is counter-intuitive and we should not use mathematical models to convince ourselves that low probability/high impact events are somehow mitigated because they disappear in statistics when you smooth out the outliers.
the thesis is pretty simple: reasoning about randomly distributed events is counter-intuitive and we should not use mathematical models to convince ourselves that low probability/high impact events are somehow mitigated because they disappear in statistics when you smooth out the outliers.
Well it is like GoF design pattern book I have seen many knowledgeable people find it as master piece for software design while others think it is describing ways to overcome some rather obvious shortcoming of C++/Java etc. Nothing earth shattering in that.
I once had a chance to meet him in person when he happened to be in town, and I was surprised by how pleasant, friendly and even soft-spoken he was, given how arrogant his writing can be. I suppose it riles up more critics and sells more books that way.
I think a lot of the text written on this page can be explained by his tweets. Your experience reminded me of his this tweet:
"Proud of being gentle with the waiter & tough with powerful ass*les rather than reverse..." https://twitter.com/nntaleb/status/709083677993598976
(Also, please take it in good faith. Don't at all mean to imply equivalence or difference of social positions of any parties. )
"Proud of being gentle with the waiter & tough with powerful ass*les rather than reverse..." https://twitter.com/nntaleb/status/709083677993598976
(Also, please take it in good faith. Don't at all mean to imply equivalence or difference of social positions of any parties. )
Yes, this is consistent with my experience. He was patient and kind with a bunch of students, very present and listening closely.
"people 'nice' in print are assholes in person and vice versa" Nassim Taleb :P
I wouldn't imagine he would be hostile to you unless he suspected you were a charlatan.
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We are surrounded by some amount of randomness, but quite a bit of complexity and chaotic/nonlinear behavior that can look like randomness but does in fact contain information.
A PRNG function is an extreme example; if you know its state and the function you can predict its output precisely. A PRNG is 'pseudo' because it is not in fact random at all.
Evolution is a learning (information transfer) process. If most of our inputs and data were random, evolution would have nothing to "grab onto" and complex stable genomes and phenotypes would never have developed. Life would never have risen above the level of archaebacteria, if at all.
E.g. : http://www.nature.com/nature/journal/v412/n6844/abs/412331a0...
I've never been impressed by Taleb. I think his popularity comes from providing a pseudo-intellectual gloss for the popular "hater" prejudice that success is random and thus wholly undeserved.
(I do support the existence of a welfare state, but for reasons that differ dramatically from Taleb's. I do not support the precautionary principle, which is absurd and dangerous and reduces to an argument against any form of innovation or action.)
A PRNG function is an extreme example; if you know its state and the function you can predict its output precisely. A PRNG is 'pseudo' because it is not in fact random at all.
Evolution is a learning (information transfer) process. If most of our inputs and data were random, evolution would have nothing to "grab onto" and complex stable genomes and phenotypes would never have developed. Life would never have risen above the level of archaebacteria, if at all.
E.g. : http://www.nature.com/nature/journal/v412/n6844/abs/412331a0...
I've never been impressed by Taleb. I think his popularity comes from providing a pseudo-intellectual gloss for the popular "hater" prejudice that success is random and thus wholly undeserved.
(I do support the existence of a welfare state, but for reasons that differ dramatically from Taleb's. I do not support the precautionary principle, which is absurd and dangerous and reduces to an argument against any form of innovation or action.)
I agree with this and loved Fooled By Randomness. Taleb clearly thinks a lot about these types of things and usually has very interesting ideas. He also has fun analogies and presents things in a way that makes you think differently (partly because he doesn't state things with a lot of nuance).
However, he also comes off as quite arrogant to me with criticism of just about all others in society except for himself for one reason or another. Criticism of 'pseudo' intellectuals is especially ironic -- as at this point in his career he is probably best described as a pseudo-intellectual book author.
However, he also comes off as quite arrogant to me with criticism of just about all others in society except for himself for one reason or another. Criticism of 'pseudo' intellectuals is especially ironic -- as at this point in his career he is probably best described as a pseudo-intellectual book author.
https://arxiv.org/a/taleb_n_1.html
If that is pseudo intellectual for you, you are too rich. Lets not forget his success as bond trader and his fund making massive sums of money in market volatility.
If that is pseudo intellectual for you, you are too rich. Lets not forget his success as bond trader and his fund making massive sums of money in market volatility.
> The Precautionary Principle (with Application to the Genetic Modification of Organisms)
That article is a prime example of pseudo intellectualism, mostly because he lumps all GMOs in one big bucket, there's no general characteristic yet he and co-authors forces one. No wonder it's "only" on arxiv and hasn't made it anywhere else (look at the endorsers: https://arxiv.org/auth/show-endorsers/1410.5787 )
A rebuttal did however make it into a journal: http://www.nature.com/nbt/journal/v33/n9/full/nbt.3333.html
That article is a prime example of pseudo intellectualism, mostly because he lumps all GMOs in one big bucket, there's no general characteristic yet he and co-authors forces one. No wonder it's "only" on arxiv and hasn't made it anywhere else (look at the endorsers: https://arxiv.org/auth/show-endorsers/1410.5787 )
A rebuttal did however make it into a journal: http://www.nature.com/nbt/journal/v33/n9/full/nbt.3333.html
FWIW, I read Antifragile, and this GMO position seems to go against the general principles he espoused there. Having read it, I expected he would think the status quo is already optimal for addressing GMOs: some regions go full forward with it, some heavily restrict it, some ban it entirely. This will then give a great dataset for long term effects while also hedging against it being a catastrophe.
But Taleb's current position is way more conservative than that stance!
Edit: I think this commenter gave a more "Talebian" response to GMOs (despite not having read the book): basically, let them exist, but make it easy for people to opt out in favor of foods with a longer track record. https://news.ycombinator.com/item?id=11506599
But Taleb's current position is way more conservative than that stance!
Edit: I think this commenter gave a more "Talebian" response to GMOs (despite not having read the book): basically, let them exist, but make it easy for people to opt out in favor of foods with a longer track record. https://news.ycombinator.com/item?id=11506599
Part of the current problem with "opting out" (at least in America) is that companies producing GMOs have fought huge legal battles to avoid labeling requirements.
Without accurate information, you can't know if your corn flakes were made with GMOs or not.
Without accurate information, you can't know if your corn flakes were made with GMOs or not.
Ha! Love the understated tone there.
Nature is "a journal" like the Pyramids are "a stone pile".
Nature is "a journal" like the Pyramids are "a stone pile".
Nature Biotechnology is in fact only "a journal", there is Nature proper and then lots of spin-offs that have to be evaluated on their own merit.
Nature Biotech is a pretty prestigious journal in its own right.
He is involved in a long-standing feud with Steven Pinker which basically goes like this:
Pinker: Descriptively, there is less violence in the world today than at any time in recorded human history.
Taleb: How can you claim that we are in a "Long Peace"? There could be a huge terrorist attack tomorrow!
Pinker: I'm not making predictions, I am describing the world as it currently is. The "Long Peace" is a term used by historians to describe post-1945, not a predictive one to describe what will happen in the future.
Taleb: Violence is fat-tailed, nuclear bombs could kill millions of people instantly tomorrow, if you say violence is down you are statistically incompetent. See for example: https://www.facebook.com/13012333374/posts/10151641931853375
According to Taleb, a descriptive book of hundreds of pages of data is insufficient conclusion to say, descriptively, that violence is lower than in the past.
Pinker: Descriptively, there is less violence in the world today than at any time in recorded human history.
Taleb: How can you claim that we are in a "Long Peace"? There could be a huge terrorist attack tomorrow!
Pinker: I'm not making predictions, I am describing the world as it currently is. The "Long Peace" is a term used by historians to describe post-1945, not a predictive one to describe what will happen in the future.
Taleb: Violence is fat-tailed, nuclear bombs could kill millions of people instantly tomorrow, if you say violence is down you are statistically incompetent. See for example: https://www.facebook.com/13012333374/posts/10151641931853375
According to Taleb, a descriptive book of hundreds of pages of data is insufficient conclusion to say, descriptively, that violence is lower than in the past.
His fund lost massive amount of other people's money over the long term. (Guess he didn't have enough skin in the game.)
Where are you getting those numbers from? The most reliable numbers I could find where in this WSJ article: http://www.wsj.com/articles/SB118429436433665637
which claims that while his fund may have under-performed other funds over its lifetime and suffered a couple of years of modest losses during a period of stable growth, it did make massive returns during the dot.com crash which was kind of the funds raison d'etre.
which claims that while his fund may have under-performed other funds over its lifetime and suffered a couple of years of modest losses during a period of stable growth, it did make massive returns during the dot.com crash which was kind of the funds raison d'etre.
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Only LPs have true access to fund returns but there are a lot of examples of falsehoods being claimed by Taleb et al;
http://www.businessinsider.com/wait-before-you-invest-in-nas...
Plus the fact that he started an new fund in 2009 that essentially was relying on hyperinflation to make their returns;
http://www.wsj.com/articles/SB124380234786770027#mod=testMod
http://www.businessinsider.com/wait-before-you-invest-in-nas...
Plus the fact that he started an new fund in 2009 that essentially was relying on hyperinflation to make their returns;
http://www.wsj.com/articles/SB124380234786770027#mod=testMod
That seems to be an error on GQ's part, not Taleb's.
See http://blogs.reuters.com/felix-salmon/2009/06/30/the-taleb-g...
See http://blogs.reuters.com/felix-salmon/2009/06/30/the-taleb-g...
It is actually not Taleb's fund but Mark Spitznagel's an it is doing phenominally well
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I suspect people who've read Talib make a lot of money in prediction markets this year from people who just read Nate Silver
Have you got more info on that? I'd be interested in following it up.
None of his theories are scientific. They're nice mental models to keep of the world, but they certainly don't justify his level of arrogance, especially not towards others who actually follow the scientific process to postulate theories
His theories are largely a rejection of placing too much faith in the scientific method (without rejecting it entirely, of course). The essence of his entire philosophy is that naive empiricism causes you to ignore things that happen rarely, and the more you build the assumption that rare events do not happen into your models, the more it hurts when they do happen.
This is, by definition, a hypothesis that is both obviously true and also almost impossible to test. The very problem in question is that there is a fundamental lack of data on these rare events because they happen rarely.
This is, by definition, a hypothesis that is both obviously true and also almost impossible to test. The very problem in question is that there is a fundamental lack of data on these rare events because they happen rarely.
He has a 450 page mathematical explanation of his theories in his book Silent Risk.
http://www.fooledbyrandomness.com/FatTails.html
http://www.fooledbyrandomness.com/FatTails.html
I'll read this thanks.
anton1989(1)
You don't seem to know what scientific means, do you?
Are his theories formulated in a rigidly defined and testable manner, and empirically tested?
No, they're "rules of thumb". Rules of thumbs can be great to make complex decisions (like in trading, as he does), but coming up with a few rules of thumb and doing well at your job does not warrant his level of confidence in his intellect.
No, they're "rules of thumb". Rules of thumbs can be great to make complex decisions (like in trading, as he does), but coming up with a few rules of thumb and doing well at your job does not warrant his level of confidence in his intellect.
Aren't rules of thumb in his case the outcome of inductive reasoning based on many observations? Sounds pretty empirical to me. It is a fundamental strength of science that such formulations accept falsifiability - so the fact that his hypotheses/theories/laws don't hold in all cases just means they need to be refined for those cases.
It also common scientific practice to accept hypotheses within bounds of probability.
It also common scientific practice to accept hypotheses within bounds of probability.
The wildest conspiracy theories you've heard are also "the outcome of inductive reasoning based on many observations". Empirical testing is supposed to be statistical, not subject to human bias.
Well no, because they are neither falsifiable nor independently verifiable. Taleb proposes hypotheses based on openly available information and he provides enough information to replicate his findings.
The chapter about minorities ruling majorities was really insightful. He mentioned how if even a small percent of people become anti GMO, then GMOs will die out. A scary thing to keep in mind with the whole "label it" debate that was on here a few days ago.
That only works if GMOs don't have a significant advantage over non GMOs. And if they don't (in terms of price, properties, etc) then there's really not much point to them, no reason to get excited.
They don't have a significant advantage. The price of non GMO food is only slightly higher. Most of the cost of food is from processing and transportation, not at the agricultural level.
But to the farmer, GMO yields are significantly higher, and can be the difference between making a profit or a loss. It also means less use of pesticides, and safer pesticides, among other possible advantages like disease resistance. On a world scale, we produce more food with less land, which is definitely good. And especially important for the third world.
The future of GMOs also has a lot of potential. We could engineer plants with many times greater photosynthesis, or the ability to grow in salted land, to not be damaged by frost, etc.
But to the farmer, GMO yields are significantly higher, and can be the difference between making a profit or a loss. It also means less use of pesticides, and safer pesticides, among other possible advantages like disease resistance. On a world scale, we produce more food with less land, which is definitely good. And especially important for the third world.
The future of GMOs also has a lot of potential. We could engineer plants with many times greater photosynthesis, or the ability to grow in salted land, to not be damaged by frost, etc.
If all the factors you mentioned don't lead to a big price difference, then that's the market telling us that they don't really matter. If production is cheap, then there's a lot of supply, and there's little to be gained by optimizing supply.
I stand by what I said. You cannot simultaneously have GMOs that are a significant improvement overall without them negating the "minority" argument, and ones small enough to be undermined by a vocal minority shouldn't matter.
"many times greater photosynthesis, or the ability to grow in salted land, to not be damaged by frost"
If any of those were a real problem, then production would be a greater percent of the final cost. If changing those doesn't really change the final product price, then they're not important.
I stand by what I said. You cannot simultaneously have GMOs that are a significant improvement overall without them negating the "minority" argument, and ones small enough to be undermined by a vocal minority shouldn't matter.
"many times greater photosynthesis, or the ability to grow in salted land, to not be damaged by frost"
If any of those were a real problem, then production would be a greater percent of the final cost. If changing those doesn't really change the final product price, then they're not important.
Just because something is only a small portion of the final product, doesn't mean it's negligible overall. If say it raises the price of food by 10%, that's 200 billion dollars lost in just the US. Probably the price increase is smaller than that, but it would still be a non trivial amount of lost value.
And again, the real issue is with third world countries, where the price of food can mean life or death. These countries depend on the first world to innovate in things like GMOs. If we stop doing that, because people won't buy them, we hurt the world's poor disproportionately.
And again, the real issue is with third world countries, where the price of food can mean life or death. These countries depend on the first world to innovate in things like GMOs. If we stop doing that, because people won't buy them, we hurt the world's poor disproportionately.
10% of the price is enough to prevent a vocal minority from blocking it, I think.
Assuming that public policy is based on merit, and that consumers can make critical decisions free of bias.
One has only to look at the new exemptions for vaccinations to see that this clearly isn't true, and has modern-day repercussions.
One has only to look at the new exemptions for vaccinations to see that this clearly isn't true, and has modern-day repercussions.
He's really wrong about the kosher example in a way that makes me wonder whether he really understands a lot of what he's talking about.
Anyone who is familiar with kashrut knows that only vegetarian foods (with a few exceptions) are reliably kosher, because it takes very little to make them kosher, just paying for an inspection and certification to say that there aren't any animal products. But if you want kosher meat, kosher cheese, kosher wine, or kosher cooked food, it's significantly more difficult to find that.
Why?
Because those impose real costs on the producers that force them to change their practices. If you want kosher meat, that excludes pork and animals have to be treated differently. If you want kosher cheese, it can't have rennet (an animal protein), which most cheese does. If you want kosher wine, it needs to be processed in a specific way. And if you want kosher cooked food, not only does the restaurant have to follow all of those rules but they also can't serve milk and meat together. Suddenly, it becomes a lot less common to find kosher food if you actually care about it and aren't just cherrypicking an example for a book.
If you want a real lesson from kosher food, it's that companies will adopt all sorts of certifications and make any number of promises as long as they don't have to significantly change what they're doing. But if you ask them to do something that would really cost them money, then they are much less likely.
Anyone who is familiar with kashrut knows that only vegetarian foods (with a few exceptions) are reliably kosher, because it takes very little to make them kosher, just paying for an inspection and certification to say that there aren't any animal products. But if you want kosher meat, kosher cheese, kosher wine, or kosher cooked food, it's significantly more difficult to find that.
Why?
Because those impose real costs on the producers that force them to change their practices. If you want kosher meat, that excludes pork and animals have to be treated differently. If you want kosher cheese, it can't have rennet (an animal protein), which most cheese does. If you want kosher wine, it needs to be processed in a specific way. And if you want kosher cooked food, not only does the restaurant have to follow all of those rules but they also can't serve milk and meat together. Suddenly, it becomes a lot less common to find kosher food if you actually care about it and aren't just cherrypicking an example for a book.
If you want a real lesson from kosher food, it's that companies will adopt all sorts of certifications and make any number of promises as long as they don't have to significantly change what they're doing. But if you ask them to do something that would really cost them money, then they are much less likely.
He explicitly makes your point, though I agree it could be elaborated (otoh it's only a draft).
>Second, the cost structure matters quite a bit. It happens in our first example that making lemonade compliant with Kosher laws doesn’t change the price by much, not enough to justify inventories. But if the manufacturing of Kosher lemonade cost substantially more, then the rule will be weakened in some nonlinear proportion to the difference in costs. If it cost ten times as much to make Kosher food, then the minority rule will not apply, except perhaps in some very rich neighborhoods.
>Second, the cost structure matters quite a bit. It happens in our first example that making lemonade compliant with Kosher laws doesn’t change the price by much, not enough to justify inventories. But if the manufacturing of Kosher lemonade cost substantially more, then the rule will be weakened in some nonlinear proportion to the difference in costs. If it cost ten times as much to make Kosher food, then the minority rule will not apply, except perhaps in some very rich neighborhoods.
And a good way to fight that is to form a stubborn minority that only eats GMO food.
that won't work in the EU which have have a much more sceptic view on these things.
Their principle is the direct opposite of the US. If there is just the slightest risk that something is dangerous they forbid it.
In the US they only forbid things if there is overwhelmingly evidence that points towards it being dangerous.
Their principle is the direct opposite of the US. If there is just the slightest risk that something is dangerous they forbid it.
In the US they only forbid things if there is overwhelmingly evidence that points towards it being dangerous.
This discussion is about whether GMOs will naturally be phased out of the market because of a minority that refuses to eat them. Just like it's hard to find non kosher food, because there's a minority that won't eat it.
If the government just outright mandates how food has to be produced, then no one has a choice, and of course that won't work. That's a different situation entirely.
Anyway your generalization is overly broad. The US also is restrictive of new things. Especially in e.g. the medical world. See all the startups running into trouble with the FDA. But also things like drones were banned commercially until recently. Even GMOs did have to get FDA approval, so your statement is simply wrong. You can't just go out and make your own GMOs and sell them.
I think it's just a general trend, that richer countries become more conservative, and more afraid of new things (and able to afford such policies.) Many technologies we take for granted would never be legally viable if they were invented today. Early automakers would have been sued out of existence for all the traffic accidents they caused.
Or, speaking of GMOs, traditional crop breeding literally involves letting the crops randomly mutate in unknown ways (sometimes artificially through irradiation!) No way that would have been approved by modern regulators.
If the government just outright mandates how food has to be produced, then no one has a choice, and of course that won't work. That's a different situation entirely.
Anyway your generalization is overly broad. The US also is restrictive of new things. Especially in e.g. the medical world. See all the startups running into trouble with the FDA. But also things like drones were banned commercially until recently. Even GMOs did have to get FDA approval, so your statement is simply wrong. You can't just go out and make your own GMOs and sell them.
I think it's just a general trend, that richer countries become more conservative, and more afraid of new things (and able to afford such policies.) Many technologies we take for granted would never be legally viable if they were invented today. Early automakers would have been sued out of existence for all the traffic accidents they caused.
Or, speaking of GMOs, traditional crop breeding literally involves letting the crops randomly mutate in unknown ways (sometimes artificially through irradiation!) No way that would have been approved by modern regulators.
Then how do you explain the ban on ephedra? Something like 2 people die and it's off the market. Meanwhile, Tylenol kills hundreds of people annually and it's still allowed.
I was going to use Thalidomide as another counterexample, but I don't know how things are in Europe compared to the 60's.
I was going to use Thalidomide as another counterexample, but I don't know how things are in Europe compared to the 60's.
Anomalies
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if even a small percent of people become anti GMO, then GMOs will die out
Not if they are a measurably better product the won't. If GMOs can offer food that is significantly tastier and/or significantly cheaper then they will do just fine. I'm not a big fan of GMOs per se. but offer me something I actually want and I'll happily buy your product
Not if they are a measurably better product the won't. If GMOs can offer food that is significantly tastier and/or significantly cheaper then they will do just fine. I'm not a big fan of GMOs per se. but offer me something I actually want and I'll happily buy your product
I think the problem here is one level of abstraction further out. It's not whether anti-GMO types can keep you and I from buying GMO products -- indeed, it's unlikely that GMOs are going to have much to offer western middle class consumers.
The big kicker is the effect this battle have in the third world, where GMOs hold the potential of a much larger impact (see eg https://en.wikipedia.org/wiki/Golden_rice ).
The big kicker is the effect this battle have in the third world, where GMOs hold the potential of a much larger impact (see eg https://en.wikipedia.org/wiki/Golden_rice ).
Precisely. There can be many merits to a better supply chain, which are invisible to the end consumer.
To be clear, there is nothing wrong with manufacturers selectively labeling their supply chain methods. There is a problem with forcing them all to, when there is no evidence to support it. Even with nutritional labels, consumers have a right to know what is in the good for making decisions based on health reasons.
To be clear, there is nothing wrong with manufacturers selectively labeling their supply chain methods. There is a problem with forcing them all to, when there is no evidence to support it. Even with nutritional labels, consumers have a right to know what is in the good for making decisions based on health reasons.
Here are two Facebook posts from Taleb related to the topic and a ~3 minute video that has the main point.
"The establishment composed of journos, BS-Vending talking heads with well-formulated verbs, bureaucrato-cronies, lobbyists-in training, New Yorker-reading semi-intellectuals, image-conscious empty suits, Washington rent-seekers and other "well thinking" members of the vocal elites are not getting the point about what is happening and the sterility of their arguments. People are not voting for Trump (or Sanders). People are just voting, finally, to destroy the establishment." - 7th March - https://www.facebook.com/nntaleb/posts/10153654273663375
"What we are seeing worldwide, from India to the UK to the US, is the rebellion against the inner circle of no-skin-in-the-game policymaking "clerks" and journalists-insiders, that class of paternalistic semi-intellectual experts with some Ivy league, Oxford-Cambridge, or similar label-driven education who are telling the rest of us 1) what to do, 2) what to eat, 3) how to speak, 4) how to think... and 5) who to vote for. With psychology papers replicating less than 40%, dietary advice reversing after 30y of fatphobia, macroeconomic analysis working worse than astrology, microeconomic papers wrong 40% of the time, the appointment of Bernanke who was less than clueless of the risks, and pharmaceutical trials replicating only 1/5th of the time, people are perfectly entitled to rely on their own ancestral instinct and listen to their grandmothers with a better track record than these policymaking goons. Indeed one can see that these academico-bureaucrats wanting to run our lives aren't even rigorous, whether in medical statistics or policymaking. I have shown that most of what Cass-Sunstein-Richard Thaler types call "rational" or "irrational" comes from misunderstanding of probability theory." - 9th March - https://www.facebook.com/nntaleb/posts/10153658794008375
"Nassim Taleb: Skin in the Game" - 2m48s - 22nd April - https://www.youtube.com/watch?v=0Uc4DI-BF28
"The establishment composed of journos, BS-Vending talking heads with well-formulated verbs, bureaucrato-cronies, lobbyists-in training, New Yorker-reading semi-intellectuals, image-conscious empty suits, Washington rent-seekers and other "well thinking" members of the vocal elites are not getting the point about what is happening and the sterility of their arguments. People are not voting for Trump (or Sanders). People are just voting, finally, to destroy the establishment." - 7th March - https://www.facebook.com/nntaleb/posts/10153654273663375
"What we are seeing worldwide, from India to the UK to the US, is the rebellion against the inner circle of no-skin-in-the-game policymaking "clerks" and journalists-insiders, that class of paternalistic semi-intellectual experts with some Ivy league, Oxford-Cambridge, or similar label-driven education who are telling the rest of us 1) what to do, 2) what to eat, 3) how to speak, 4) how to think... and 5) who to vote for. With psychology papers replicating less than 40%, dietary advice reversing after 30y of fatphobia, macroeconomic analysis working worse than astrology, microeconomic papers wrong 40% of the time, the appointment of Bernanke who was less than clueless of the risks, and pharmaceutical trials replicating only 1/5th of the time, people are perfectly entitled to rely on their own ancestral instinct and listen to their grandmothers with a better track record than these policymaking goons. Indeed one can see that these academico-bureaucrats wanting to run our lives aren't even rigorous, whether in medical statistics or policymaking. I have shown that most of what Cass-Sunstein-Richard Thaler types call "rational" or "irrational" comes from misunderstanding of probability theory." - 9th March - https://www.facebook.com/nntaleb/posts/10153658794008375
"Nassim Taleb: Skin in the Game" - 2m48s - 22nd April - https://www.youtube.com/watch?v=0Uc4DI-BF28
Seems like he's gone full ZeroHedge
Except this guy is a known and reputable expert in economics. He's worth listening to unless you fear he may be shorting his readership (joking).
Nitpicking: he's an asset allocation/market expert, not an economics expert. His PhD is in finance, not economics. There's a significant difference.
Significant perhaps in the statistical sense. The domain is the same. I believe he is also a professor of mathematics. He has some eminence in this area in any case.
I look forward to reading his book. His writing style is good but not great.
I'm surprised about a lot of accusation of arrogance,etc...
From what I have read his arrogance, might be misconceived as he is willingness to call out anybody on what he perceived as their BS. We need more people to call others out on their BS. (US elections, MSM, cnbc, Mosanto, wall street...)
Anybody that open comes out and says Saudi Arabia is a barbaric / terrorist state, (which the US Gov, seems to over look for years) questions the Federal Reserve, teaches at community college. Constantly, open sources his books and math. Probably isn't part of the establishment and hence might be driving peoples dislike.
Of course most people on Wall St. don't like him because they don't understand his theories or his thoughts.
He has great twitter feed. (He retweeted me once!)
I'm surprised about a lot of accusation of arrogance,etc...
From what I have read his arrogance, might be misconceived as he is willingness to call out anybody on what he perceived as their BS. We need more people to call others out on their BS. (US elections, MSM, cnbc, Mosanto, wall street...)
Anybody that open comes out and says Saudi Arabia is a barbaric / terrorist state, (which the US Gov, seems to over look for years) questions the Federal Reserve, teaches at community college. Constantly, open sources his books and math. Probably isn't part of the establishment and hence might be driving peoples dislike.
Of course most people on Wall St. don't like him because they don't understand his theories or his thoughts.
He has great twitter feed. (He retweeted me once!)
The accusation of arrogance is especially ironic coming from the HN crowd, who assume themselves being especially qualified to comment on fields they are not experts on (statistics and economics in particular, but many others as well)
Thank you for putting in words, what I have always thought, but never put in actual words or was validated by anybody else.
"I'm surprised about a lot of accusation of arrogance,etc...
From what I have read his arrogance, might be misconceived as he is willingness to call out anybody on what he perceived as their BS."
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I'm not going to refrain from passing judgment here as to whether the people he 'calls out' deserve to get 'called out' or not
but when you 'call people out', if other people don't agree with your fact pattern, it reads like 'arrogance'
I would categorize his style as pretty 'on the nose', how that reads from there is a function of how much you agree with the fact pattern as he's laid it out
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http://www.urbandictionary.com/define.php?term=on%20the%20no...
http://english.stackexchange.com/questions/248474/what-does-...
From what I have read his arrogance, might be misconceived as he is willingness to call out anybody on what he perceived as their BS."
----------------
I'm not going to refrain from passing judgment here as to whether the people he 'calls out' deserve to get 'called out' or not
but when you 'call people out', if other people don't agree with your fact pattern, it reads like 'arrogance'
I would categorize his style as pretty 'on the nose', how that reads from there is a function of how much you agree with the fact pattern as he's laid it out
----------------
http://www.urbandictionary.com/define.php?term=on%20the%20no...
http://english.stackexchange.com/questions/248474/what-does-...
his facebook page is not to be missed either. One of the main reasons why I still occasionally check facebook.
Am I the only one who doesn't enjoy Taleb's writing style? I find that he tends to use overly complex vocabulary to explain very simple ideas.
When I tried to read Antifragile his style seemed rambling and incoherent, darting back and forth between concepts and obtuse metaphors, like a tirade from the coked-up conspiracy nut at every party.
I may need to give it another shot.
I may need to give it another shot.
I don't know how to describe it, but his style is...vintage. More like when I read old books. I'm particularly suited for this writing style and I interpret it fine. People frequently make the same complaints about the way I speak in person when discussing things. This is in no way a claim that I am as smart as Taleb.
>like a tirade from the coked-up conspiracy nut at every party.
I take it you've seen his Twitter then?
I take it you've seen his Twitter then?
He does jump around a lot in Black Swan, but that suits me
I don't think it's complex vocabulary at all, to me it reads like plain talking(or thinking) and I think it's refreshing... On the themes he talks about, if it were talked about in a strict logical-technical manner it would be really, really boring.
I imagine he's having fun with this over-the-top prose. That's how I read his work.
He's not the best writer. One reads his books for their ideas and wacky anecdotes, not the beauty of the writing style.
http://fooledbyrandomness.com/minority.pdf
this chapter interesting contrasts with this blog post
http://slatestarcodex.com/2015/12/01/setting-the-default/
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a better writer than me could shortly synthesis what's interesting about the two
the blog post is sort of a defense of cultural warriorism
the chapter seems to expand on it
this chapter interesting contrasts with this blog post
http://slatestarcodex.com/2015/12/01/setting-the-default/
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a better writer than me could shortly synthesis what's interesting about the two
the blog post is sort of a defense of cultural warriorism
the chapter seems to expand on it
I look forward to reading this book.
It would be interesting to have an investigation of the two different kinds of "skin in the game" in this book.
There is a positive spin of the expression, e.g. the entrepreneur, who has skin in the game of his company via his shares and resources. This scenario (ideally) results in eustress.
However, there is also a negative spin of the expression, e.g. an employee, who has skin in the game by being afraid of losing his job. Usually, this leads to distress over the long term.
Hence, if I want to employ someone I face a dilemma: the employee should have skin in the game, but it shouldn't create distress. There's a huge set of options you can go with as the employer, but I wonder if there is an optimal solution.
There is a positive spin of the expression, e.g. the entrepreneur, who has skin in the game of his company via his shares and resources. This scenario (ideally) results in eustress.
However, there is also a negative spin of the expression, e.g. an employee, who has skin in the game by being afraid of losing his job. Usually, this leads to distress over the long term.
Hence, if I want to employ someone I face a dilemma: the employee should have skin in the game, but it shouldn't create distress. There's a huge set of options you can go with as the employer, but I wonder if there is an optimal solution.
Misalignment of incentives with desired outcomes is often overlooked as a cause of social ills. In general people do what gets them pay and promotion.
Bonuses and shares align owners and employees interests.
In Shaw's introduction to Pygmalion he points out we pay our doctors when we are ill; contrasting this to paying only when well, which Shaw suggests more clearly aligns preventative medicine with doctor's pay.
Or the classic budget underspend resulting in less funding next year, incentivising innefficiency.
'Juking the Stats' is the epitomy. A useful metric, like pupils passing tests when used to allocate budgets becomes the sole object of teaching. Rather than education, the school teaches the test and worse those who are educators are ground down - as Simon's Pryzbylewski finds in The Wire.
Bonuses and shares align owners and employees interests.
In Shaw's introduction to Pygmalion he points out we pay our doctors when we are ill; contrasting this to paying only when well, which Shaw suggests more clearly aligns preventative medicine with doctor's pay.
Or the classic budget underspend resulting in less funding next year, incentivising innefficiency.
'Juking the Stats' is the epitomy. A useful metric, like pupils passing tests when used to allocate budgets becomes the sole object of teaching. Rather than education, the school teaches the test and worse those who are educators are ground down - as Simon's Pryzbylewski finds in The Wire.
I agree, although bonuses and shares can also backfire (esp. bonuses). There seems to be a mix of extrinsic and intrinsic factors that work well. Do you think there is an optimal solution to make an employee have skin in the game, but in a positive way?
I thoroughly enjoyed his other book, "Anti-Fragile" and even more enjoy his twitter feed. He may be low on humility factor, but him calling out BS is refreshing, esp. the self-proclaimed vanguards of science whose work in science is filled with holes and/or is sparse.
Read some of the preview chapters, posted here and twitter feed. Fits very well with his writing style and over all theme. I look forward to read this book.
Read some of the preview chapters, posted here and twitter feed. Fits very well with his writing style and over all theme. I look forward to read this book.
For someone calling out vanguards of science, he's light on science himself. He pulled all his "theories" out of his ass, with no empirical support or mathematical deduction.
Fooled by randomness was nice and all, and Black Swan was OK (if you can read past his arrogance), but now he considers himself a "public intellectual", and treats himself as the class of a Nobel winner when he has no more credentials than any other random day trader
Fooled by randomness was nice and all, and Black Swan was OK (if you can read past his arrogance), but now he considers himself a "public intellectual", and treats himself as the class of a Nobel winner when he has no more credentials than any other random day trader
I agree on both points. I really enjoyed reading Antifragile, lots of good concepts and ideas! But his Twitter feed is pretty depressing to read - lots of attacking back and forth.
His Twitter feed reveals him to be less antifragile and more infantile.
> his Twitter feed is pretty depressing to read
Em, aren't they all, unless they are the kind of "the shit my dad says," that is, intentional jokes?
Em, aren't they all, unless they are the kind of "the shit my dad says," that is, intentional jokes?
The solution to the employee slavery problem is simple: try a part time stint in an industry you can afford to mess up in.
For example, if you can get a job as a non-proprietary trader you get a huge positive expected value. You make $$ - you get a huge windfall. Mess up? You get fired and collect only a small salary. You should make a pact with a couple friends to share he windfalls, and then each of you makes a guaranteed win.
For example, if you can get a job as a non-proprietary trader you get a huge positive expected value. You make $$ - you get a huge windfall. Mess up? You get fired and collect only a small salary. You should make a pact with a couple friends to share he windfalls, and then each of you makes a guaranteed win.
That's interesting. Four different trading philosophies, four traders. They're aware of their fallibility. They contract and pour their earnings into an escrow account every pay period. They each receive a basic stipend. At the terminus of the agreement (e.g., 2 years), all earnings are distributed evenly.
From http://fooledbyrandomness.com/minority.pdf: "Which explains why it is so hard to find peanuts on airplanes"
I was just on a flight where peanuts was one of the snack options. (I chose pretzels.)
I was just on a flight where peanuts was one of the snack options. (I chose pretzels.)
Couldn't finish Black Swan, the same idea, regardless its merits, is discussed on 300 pages over and over again. Highly repetitive, the tone is generally condescending. I didn't like his stories about giving taxi drivers 100 dollar bills and observing their behavior.
Taleb has made a career out of distorting and misconstruing the opinions of experts and professionals, whether it's about statistics, option trading, or risk management. He has few is only unique insights. His trading strategies that he allegedly used to make a fortune no longer work.
You can see that he enjoys his writing, and I will enjoy reading this book.