Antifragile: Limitations

I reiterate my admiration for Nicholas Nassim Taleb’s Antifragile. The general concepts are strong, and engagingly put.  The GreenLumber Fallacy, along with a similar example about a trader in Swiss Francs, is memorable. He names names in his closing criticisms of insiders taking advantage of more fragile others:  The Alan Blinder Problem, the Joseph Stiglitz Problem, the Robert Rubin Problem.  I loved his advocacy of relying on observation rather than narratives to make decisions – one of those things I’ve learned over the years. He writes often about taking small risks while exposing oneself to large or even unlimited gains – which sounds obvious, but human beings tend to do the opposite.  In investments and many personal decisions, we ignore risks while seeking small but predictable gains.

Note to Grim:  You have written about honor and honor societies; throughout the book, but especially at the end, Taleb writes approvingly about the sense of honor in what he calls traditional societies, and how it is sometimes superior to ethics that are based on more abstract ideas. He quotes a lot of ancient Mediterranean philosophers on many topics, which I know will also be to your liking.

Note to Retriever:  Though Taleb is a trader and investor himself, you will much like what he says about investors and advisors as a class. He believes they hide personal risk at the expense of others, and their advice neglects real understanding of risk, both of which unfairly burdens the taxpayer and the little guys who cannot manipulate the regulations (and the regulators).

Yet I don’t want to come across as thinking his approaches unassailable.  I think he oversells some points. Here’s one. The American legal system has a bias toward putting the burden of proof on those who would forbid something as harmful. He thinks this should be reversed in our personal decisions, and advocates it in law as well – though I don’t know how far he wants to push that.  There is sense in that, that things should prove they are safe before being admitted to a society, rather than getting a free ride until someone proves they are dangerous. He believes a pollutant should prove its safety, not be permitted until it proves dangerous.  We have moved to that in FDA approval, for example. Taleb drinks no beverage that has not been around a thousand years – water, wine, coffee. (Beer and tea would presumably qualify as well.) He eschews not only sugary carbonated drinks, but fruit juice as well, because the form is recent and the fruits themselves overbred for sweetness fairly recently.

Well sure, but the Columbian Exchange is regarded as high-benefit as well as high-side-effect I believe. Eyeglasses have been uncommon until recently and hearing aids even more so.  Should we hold those out until we are quite sure there is no unintentional effect? Coal and oil have had very bad aftereffects, but does he regard them as a net loss for humanity?  I am not being difficult and mildly humorous here, as he raises exactly this issue with warming the planet. The general principle of applying some inexpensive fixes in order to guard against a catastrophe, even an unlikely catastrophe, seems sound.  Anyone who has low-cost, low-risk strategies out there should be attended to.  Taleb seems to think there is something we should be doing, but he doesn’t say what it is.  He also dismisses entirely the comments of those who benefit from petroleum sales.  I can certainly sign on to immediate suspicion of anyone who stands to personally benefit from a decision going one way or another.  Yet I can’t see the sense of automatically rejecting such comments. Everyone involved in political decisions – in fact, any decisions – usually stands to benefit in some way.  As the claims of the academics (a class Taleb generally mistrusts) are founded on narratives and self-interest as much as the corporations, who is left to listen to? Their grants, livelihoods, and career advancement depend on fitting into their own culture and enhancing its power. They also advocate that we should take their word on interventions that stand to be expensive at least and possibly harmful as well.  Taleb’s principle is sound, perhaps even more so in personal decisions not to add in medicines or new devices or new influences.  I’m not sure how far we can take that, however.

I recall similar arguments being made about gay marriage. Its advocates insist there is no proof of damage to society.  Taleb’s stated approach would put the burden of proof on the advocates instead – prove to us that in this new thing you are introducing there will be no damage.  (He does not say whether he applies this Precautionary Principle to gay marriage, recreational marijuana, or other public social decisions.  It is I raising those examples.) Should immigrants have to prove they are a benefit in order to get in or should current citizens have to prove they would cause harm in order to keep them out?

Taleb makes a powerful antiwar argument, and mentions Iraq in particular in several places. As war is likely the best example of introducing chaos into the world, with all the unexpected downstream events, usually negative, I don’t have a cold answer. Nor does he make the claim that it should always be forbidden and avoided.  As with medical intervention, Taleb believes that sometimes the likely downside is so great that much risk must be endured. But he is right to note that advocates for war seriously overestimate the predictability of what will result.  Wars usually turn out to be more deadly than expected; they always turn out to be much more expensive; they especially turn out to have unintended aftereffects, sometimes catastrophic ones. I will have a longer go at this discussion, but only wanted to note here that one of his primary ethical arguments intersects with the practical ones: that we are unleashing the unexpected on many people, and that itself is a bad thing.

The McCain/Frank Proposal

I have four principles, which increase in complexity, that have provided me with great explanatory power over the last two decades.

1. Democrats lie.
2. Republicans screw up.
3. Libertarians have the right idea, but get carried away.
4. There are a few misunderstood geniuses in every age who get important details wrong, but get a few things so stunningly right that they move us forward.

Regular readers know that I am a big fan of Nassim Nicholas Taleb, author of Fooled By Randomness and The Black Swan. I think he's one of the geniuses in Principle #4. Taleb's blog, Fooled By Randomness contains post after post of counterintuitive ideas. These are so good that I cannot do more than half-a-dozen at a time. There is simply too much that is new, too much "Whoa! I never thought of that possibility."

Taleb dislikes economists, and only agreed to take his new position as Distinguished Professor of Risk Engineering at NYU Polytechnic on the agreement that no economists would be allowed into the building he works in. Very, very occasionally, he will say something nice about an economist, but usually, he mentions them only to illustrate how consistently wrong they are about, oh, crises like the one we're in now. Such things intrigue me. I know the Econ 101 basics and a few other things, but economists baffle me. I respect Harvard's Greg Mankiw, who used to advise Bush but now criticises him. Like a good conservative, I thought I was supposed to sniff at everything Paul Krugman says, but have been reading conservative economists approving of his Nobel Prize, based on earlier work. I don't know who the hell to believe, so when someone like Taleb comes along and says "ignore all of them, especially the Nobel winners," it seems attractive. What a relief that would be, to be smarter than all the rest of you by knowing nothing. I am reminded of Milo's nightmare in "Bloom County," where he was to be tormented by two economists discussing all night whether the deficit was important. Anything but that.

So I am primed to like what Taleb likes. One of the people that Taleb likes is Arthur DeVany, professor emeritus at UCal- Irvine in Mathematical Behavioral Sciences. DeVany has an equal number of counterintuitive ideas, including stochastic eating and sleeping, evolutionary fitness, and the utter randomness of what movies will be hits.

Digression to set the stage for what follows: Like many conservatives, I have been frustrated by John McCain on the economy lately. What we like about McCain is that on foreign policy he will be firm but not brutal. We know it is in his bones, and if he does something in that area that puzzles us, we will trust him. But on the economy, he does not have conservative principles in his bones. Lord knows what are in his bones there. Does he have bones there? Conservatives don't automatically accept everything that McCain says about the economy, but neither do we automatically reject it. Who knows what the hell he's thinking? And Barney Frank - Barney F-in' Frank, one of the primary people who got us into this mess, I always figure that what he says about the economy, I want the opposite. How bad could that be?

Browsing along in DeVany's discussion of how the idiots in Washington screwed us royally on this financial crisis, and what he thinks should be done, I encounter the following line, in reference to his own very persuasive proposal:

In its basics, this solution is not far removed from a shared appreciation scheme that I think Barney Frank and John McCain have proposed.

Well knock me over with a feather.

Go back to my four principles. I have no idea how to fit this in.

Education

Nicholas Nassim Taleb describes his education in Antifragile. It sounds much like CS Lewis's, as described in Surprised By Joy. He read as he wished from a young age, according to no program other than what he set for himself.  Adults did not supervise or direct his free reading, so he would sometimes be exposed to things they might have found inappropriate had they known. (Neither Taleb or Lewis notes whether this is inappropriateness is violence, sexual, or abstract concepts beyond their likely understanding.) He attended school and did as well as he needed to at each point but found it unexciting and not very valuable.  His father was a more devoted school student and won national awards in Lebanon, but did not insist that his son take the same route.

I have noted a few times that most geniuses seem to have been autodidacts.  Taleb is clearly smarter than I am and his devotion to reading exceeded mine.  I had also a devotion to socialising - perhaps that's it. Yet I understand what he is talking about.  I used to say "never let school get in the way of your education" when I was in highschool and college.  That was certainly founded in arrogance and a sort of laziness about what others thought I should be doing, but there was truth in it as well.  I knew an enormous amount about a few subjects I had never taken a class in.  In fact, there were no classes in Arthurian studies, baseball history and statistics, or history of the English language beyond an introductory.  I added things over the years, taking up a topic with fanaticism for a few months or a few years, revisiting it years later.  In between, I would pick up other stray bits without even trying.  Once you have a structure, a schema, about a subject, anything that drifts past gets put in storage pretty easily.  I call it "cuphooks."  Once you have cupboards, and have put cuphooks in them, you can add in information at will. This is why I believe that teaching higher-level thinking skills to students too early is just bosh. Until they have a supply of cupboards and cuphooks, the information just lies around on the counter or on the table, useless.

I have therefore always loved books which supply a schema, even if it has to be modified later.  Joel Garreau's Nine Nations of North America and David Hackett Fischer's Albion's Seed supplied cupboards and cuphooks. I have redesigned those cupboards since then, but they were extremely useful.

My children also have topics in which they are extremely knowledgeable. These are significantly independent of anything they learned at school.

I noticed early on that a temporary devotion to a subject in the humanities could make you an expert very quickly.  I would talk about an historical or literary topic with a person who taught it at the college level and sense immediately that they did not know what I did.  Not close, in some cases. There's a lot of literature, a lot of philosophy, a lot of history out there and no one knows more than a sampling. If you pick an obscure corner, you can get right up to the top quickly. The general tools that the professionals bring to tie things in together and give overview don't impress me.  In theory, such things should be useful. However, they seem to be largely fashions, and these days, an imposed set of sociopolitical ideas.

I have also described in more than one place that experts and talented amateurs make different sorts of errors.

Enter Taleb, widely read in literature, philosophy, and mathematics. He suggests we avoid talking to middle people - which includes most college professors and popular writers - as we can learn little from them. He recommends attending only to the most informed, least fashionable, and most original thinkers on any subject.  Beyond that, you are better off spending your time with auto mechanics, waiters, or others who do not rely on book knowledge to get by. I see the sense of this immediately, especially in the context of how he defines antifragile knowledge. I do have an immediate difficulty with the concept, however, because I am one of those middle people, and so are most of my friends. NNT notes that the middle people, middlebrow, can be very entertaining people to be with. They are conversant at a minor level with a hundred subjects.  They know who Plato was and a few facts about him, so you can reference Plato in conversation with them in order to make a point quickly.

E D Hirsch made a name for himself in the 1980's by advocating a "cultural literacy" as a shared common knowledge to enable communication.  I have thought until quite recently that this is an excellent way to go.  I now see it is restricted to the middlebrows. It has strength because the current alternative is an assemblage of correct attitudes, even more a product of politics and fashion. Yet after reading Taleb I see weaknesses. It has no depth, so that no subject need be understood well.  More importantly, it provides considerable inertia for the conventional wisdom.  It is much harder to find a spot on which to stand to say "Socrates is wrong, and so is Plato," as Taleb does. As an autodidact, he references other ancient philosophers who he believes come closer to important truths - and I have never heard of most of them. They aren't part of the cultural literacy lists, neither the old canons, nor the new politically correct ones.

He disparages the type of close-ended knowledge that tests measure, with single correct answers according to forms.  I have disparaged them myself (which is one reason I preferred Ron Hoeflin's Mega Test to other IQ tests), but not too loudly or too often, because they are the sort of thing I'm good at and I have an interest in keeping my own roads to status clear. Yet I emphatically see his point.  His examples are pretty persuasive, and pretty damning, as well.

More to say, but I think I'll leave this here for the moment.

Taleb And IQ

Nicholas Nassim Taleb gets a lot right in this string of tweets discounting the importance of IQ.  The strength of his argument seems to be that he knows lots of high-IQ people who are pretty useless, or don’t get the right answers to complicated questions, while also knowing people with average IQ’s who do get the right answers, making them useful.  As a person with a high IQ who is pretty useless, I see what he means. There is a good deal that is valuable in this short analysis. I think he is giving evidence for three related and slightly different points, but I don’t think they combine into the single idea he puts forward.

He is making the case that IQ is not a standalone ability for much of anything.  It’s hard to argue with that.  I can’t think off the top of my head of any standalone ability. Though that is obvious, that doesn’t make Taleb’s point ridiculous, as there are people who seem to think it is a standalone ability that can take you places. They can be pretty annoying, also, especially when things go wrong and it is everybody else’s fault.

Next, he thinks there is a type of intelligence not measured by IQ that works much better in uncertainty.

Third, he thinks the two types of intelligence are not merely different, but antagonistic to each other.  He thinks the standard, IQ-type intelligence that allows one to succeed in school pushes out the other, uncertainty-based intelligence.

School and standardized tests do ask questions in which the answer is known, and a lot of reality does not fit that. Sometimes we don’t know if an answer is even knowable, as there are variables acting so quickly on each other that no one even could know the answer. I do recall from standardised tests that there was sometimes the possibility "One cannot tell from the given information," but I think those were entirely in math.

As SAT's (essentially an IQ test) are fairly good predictors of college success, it is likely that if there is any split between these types of intelligence, what one learns in college, and how one learns in college, is going to be on the IQ/false predictability side of the scale. Operating on the cliche of "it's not what they don't know, it's what they think they know that ain't so," could indeed mean that college makes things worse.

You can likely sense that I am working toward my disagreement with NNT, but don't get impatient here.  There is, as I noted initially, much that is good.  I work in a field where the primary beliefs of the experts when I started are greatly overthrown at this point. Not merely that we have new data, such that old theories have to be reworked or sometimes discarded, but that the previous ideas were stark raving mad, so to speak, and yet asserted with certainty and a condescension. A lot of those ideas of how to treat psychological problems are still hanging around, though mercifully less powerful each year. The idea that schizophrenia, autism, bipolar disorder, OCD, etc could be medical disorders was sneered at by many (though the change was already occurring in 1979).  Christian counselors were especially and openly despised. Those were in retrospect less badly wrong. One third of the field seemed to go nuts in the 1980's about recovered memory and satanic ritual abuse, and there are still some who won't let those go. At all points, the views of the experts were asserted against the knowledge of outsiders as if it was ridiculous to even consider such a thing.

All that before the words "replication crisis" were even uttered.

A Master's in Social Work is much concerned with political training. A very narrow set of boundaries for one's politics is not-very-subtly announced in the NASW ethics statement.

Historical Linguistics continues to sneer at the Greenbergs and Ruhlens - not to mention all those Russian Nostraticists - of the field, forever focusing on relatively unimportant problems in the service of rejecting a whole new way of doing business.  Because it's just not the way things are done. Unfortunately, Greenberg has proven out in Africa, and the genetics of the North American tribes are showing in just about exactly the same way as his theories for the new world would suggest. Anthropologists can still insist that primitive man was largely peaceful, twenty years after Lawrence Keeley's War Before Civilization, but the cracked skulls (and sucked marrow) at archaeological sites will render that less and less likely going forward. I will grant that some archaeology seems to be taking the right attitude, that new information is coming in so fast that all theories must be held lightly, and even very odd ones are deserving of at least a look.  I may delude myslef on this, though.  I don't really know.

The college experts are worrisome, in field after field, and they are passing this knowledge on.  The method of attaining advanced degrees does favor people who have both tenacity and an ability to not point out the obvious (they tell themselves they will revert when they get out from under that control) - to know a great deal that is not so. Taleb goes after economists in particular.  I can't refute or support him there, because I know nothing, but he certainly seems plausible.

If the conservative press focuses too much on the extreme examples of academic experts believing and teaching amazingly stupid things, that is still in response to a public that largely believes "but she's a history/sociology/English professor" as an assurance of correctness. In mathematics, I think the universities can fairly claim they've got a corner on the experts.  I suspect it is much the same in some sciences.  But does anyone believe the best musicians, actors, writers, designers, dancers and other artists are to be found at the universities? Business, eh, no.  Programmers? Please. Jonathan? What's up with geographers? Is that one of the fields that experts really have no place to go but colleges, and thus academics still own the field? More to the point, the fields where the experts, academics or not, indisputably know the most are also fields completely overrun with fashions. History.  Literature. Cultural and Social Anthropology.

Here is an interesting group that I think would somewhat agree with NNT, though they would have some sharp correctives:  people in the high IQ societies.  I don't know about that vaguer category of "people with high IQ's," but for the joiners, there was remarkable clarity what the ability was and wasn't, it's limitations, its advantages, and its sometime parlor-game quality. A story I had long forgotten: during my brief tenure as president of the Prometheus Society, Paul Ehrlich qualified and joined. Some fawned over him immediately (pathetic, I thought) and others wanted to have a go at what a fool he was straight off. For my part, I thought the work he was known for foolish, but thought he might have interesting things to say about other subjects, and was conscious of my role, recognising that criticism from me might have a stamp of authority that would be unfair. I thought it might hurt the group and said nothing.

Ehrlich may be exactly the sort of person Taleb is talking about.

Here's where I think Taleb goes wrong. He generally does not know the IQ's of the people he is talking about, and is making assumptions. That people who did well on school testing and in academic environments have high measured IQ's is a fair assumption, and if they are often fools that is evidence that IQ isn't everything. Differentiating among who was high and who was very high is another matter. On the other end of the argument it is even worse.  He can think of Fat Tony and people like him as people who have only average IQ's, but he doesn't know that. For this alternate type of intelligence that operates better under uncertainty there may be a floor, and it may not be 100. That they are uninterested in the most obvious set of endeavors related to IQ, deriving from school success, does not mean they don't have high IQ. To my knowledge, no one has even approximated a measurement of this success under uncertainty, never mind what overlap it might have with school smarts.

To be fair, that may not be NNT's point. This series of tweets may simply be a more emphatic version of what he has long said, that those we consider experts get things horribly wrong, while some people we consider less intelligent actually have a good practical track record.

Randomness And Narrative

Let's see how much sense I can make before the Vicodin ES kicks in (wisdom teeth).

A major point of Taleb's The Black Swan is that we attribute causation much too willingly, seeking explanations for our comfort but not illumination. Though I haven't read it, his Fooled By Randomness is likely about the same topic. He makes a very convincing case, both theoretically and from empirical data. You know it's convincing, because I really don't want this to be all that true, but he has turned my thinking around on this. Observing events and attributing cause is one of the things I do really well. It's part of my stock-in-trade at work, e.g. The MHC is ticked at us for sending Jeremy out when they thought he should stay, so they've been quick on the draw for revoking all young males for the last two weeks. It's not so much revenge or punishment as it is an illustration to us how hard their job is out there and how they really do try with these guys. It will pass. Or also, She's protesting that she wants to leave the hospital but all her actions say just the opposite. She's saying "Please don' throw me into that briar patch, Br'er Fox" but not on purpose. She is unable to admit to herself that she wants to stay, so she makes it our decision.

I do this with everything. If there is a conventional wisdom about a period in history I'm always on the lookout for possible alternative explanations. Usually there is an Old Conventional Wisdom about anything in history, then a New Conventional Wisdom spouted by people who believe they are independent thinkers because the "don't accept the conventional wisdom." It's pretty irritating, yeah.

Religious questions: Why does Paul write this advice to this particular group? Parenting questions: This is a great illustration of how John-Adrian's strengths and weaknesses are intertwined. He avoids conflict, which is usually a good thing.

Now Taleb wants to take my bread-and-butter away from me, just after search engines started to make me obsolete. I'm not good-looking enough to weather too many more of these abilities of mine being devalued.

We make up narratives without even trying. It in fact takes energy not to make a narrative. One interesting experiment Taleb reports: subjects were presented with the numbers 2, 4, 6 and asked to figure out by trial-and-error what the pattern was, by giving other examples, to which the administrator would say yes or no. When they thought they had it, they were to state an hypothesis. Almost everyone got it wrong. They jumped to the conclusion that the pattern was "the even numbers" or some variation of that and would provide other examples in the pattern for the yes/no response. 10, 12, 14. Yes. 98, 100, 102. Yes. I'm going to guess that you add two to the last number to make the patter. No. Next. The pattern was simply "numbers in ascending order, so 9, 17, 101 would also work.

Taleb believes that 9-11 was a Black Swan, an unpredictable event that we retrospectively try to say was predictable. We have blamed agencies, politicians, and airline safety experts for what we think in retrospect they should have anticipated. But there is powerful evidence to the contrary. After the first tower was hit, people didn't evacuate the second tower, and most people thought this wasn't strange at the time. Very few people left the second tower. The people on Flight 93 needed three other planes to go down, and their own plane to be captured, before the full weight of what was happening sunk in. Even with a powerful concrete example right in front of them, people did not immediately recognise what was happening. They weren't stupid. Only in retrospect did everyone start moaning about what we should have seen coming.

One of the hindrances to seeing the truth is that we already have a narrative in place, and try to fit the events we see into it, against all sense. The people on Flight 93 knew what highjackers did: they made plans land somewhere else and took people hostage. Except these didn't.

Similarly, a lot of commenters have taken potshots at the CIA for the last 20 years for not seeing the fall of the Soviet Union coming. I think I've done that myself. After the fact it looks so obvious, so inevitable - how could the experts be so dim as to miss it? What if it wasn't inevitable at about that time? It was an unstable situation, and may have approached collapse a dozen or a thousand times over the last fifty years. And if it had not happened then it might still not have happened now. Instability might rise and recede, but we could still be talking about a seemingly-impregnable Soviet Union. Life is much more uncertain and unstable than we like to think. To say that Gorbachev was the cause (as liberals do) or that Reagan, Thatcher, and Pope John Paul were the cause (as conservatives do) or that German economic pressure did (as Germans do, and I'm sorry, that's ridiculous) is to tell ourselves tales of predictability that aren't fully so. Reagan might well have increased the instability, making a fall more likely. That's all. Things change too quickly.

It's worth remembering when considering something as inherently unstable as war and foreign policy. If we would only do X, then Y would happen. Maybe not. Two months ago the narrative was that we weren't making progress in Iraq, it was a failure, people are still dying, let's leave. A month ago the new narrative was the Surge is working, but the Iraqis are never going to get their act together. I think the new, new, narrative is that hey, the Iraqis are doing some good things, but maybe the Surge is only working about 75% as well as we thought - which is still good/not enough, depending on your original narrative. These are not only the firmly held beliefs of people like us who hardly know anything, these are the firmly (for now) held beliefs of those who we have elected or hired to know what's really going on. Even they are narrative-bound. The danger isn't that those foolish hawks/Democrats/neocons/antiwar activists/Republicans won't change their minds, but that they won't recognize that narrative is misleading in unstable situations. And warfare is always an unstable situation. Not that there is no cause and effect or no tendency, but that random events can change everything so quickly and adjustments must be made.

Next up on this topic: silent evidence.

Stop The Presses

I picked the right day to wonder what was up with Nicholas Nassim Taleb, it seems.  He's all over the news.

I have said all year that I am unexcited by the field, but the Republicans have only to notify me who they have nominated in November and I will cast my vote - but that Ron Paul might make me rethink that.  As of Taleb's announcement, at a minimum that qualifier is gone.  The Author of The Black Swan, who is not a libertarian, neither Republican nor Democrat, not especially political and deeply involved in other projects - has "come out of his library" to campaign for Ron Paul. 

He notes four major issues, and Paul is the only one addressing them with the severity needed.  Taleb uses words like metastacised, chemotherapy, and hyperinflation in his little speech.  The deficit, he states, is 90% of the problem.  Then the fed, then militarism rather than defense, then resilience and energy.  He is notably less excited on the Ron Paul difference in those categories, yet he still gives him the edge.  And once you've put out that 90% number, the rest doesn't matter so much, does it?

OK Nassim.  You've got my attention.

Intelligence - Part III

I am not writing this series because I am a world-class expert on the subject of what constitutes intelligence, but because my views are slowly changing. (I might be a county-class expert on intelligence). Had I not read Taleb’s The Black Swan, I doubt I could have accepted the Palin candidacy with grace. My son Ben is tired of the Palin discussions, and I promise not to stay on the topic long. I fully admit that if the Democrats had done something similar, I would be more likely to consider it a stunt and less likely to consider her candidacy seriously.

But the thought was already growing in my mind that defining pure intelligence as g-factor, that patern-recognition, analogy creating, platonicity was a limitation. I had long been suspicious of top-down central planning, which always looks so plausible but has a poor track record. Taleb’s writing, pointing out the besetting dangers of such intelligence took me a step further. “Smart” people create a different type of errors. They become enamored of a pattern or theory and push it forward in spite of contrary evidence.

Well, sometimes that works. Confidence and perseverance can be good things. But it can also be catastrophic.

Some systems are so complex that patterns do not hold very well. There are weather cycles that are fairly consistent and predictive – seasons, El Nino, monsoons – but even these admit of considerable variation. There are too many interactive variables to make solid predictions. We have gotten much better, but still have surprises.

The economy is even more complex. One of the reasons that Taleb has contempt for most economists is that they believe they can reduce complicated, unpredictable events into some manageable form. They see patterns that aren’t there, or more precisely, are there only in certain circumstances or for a limited period of time. Economists overestimate how well the predictors will work. It is not that there are no patterns, or that there is no value in their knowledge, but that acting as if we know when we have overrun the limits of our knowledge in a crisis is dangerous.

A reasonably smart person who doesn’t have a pattern locked in her head, who is simply looking at the situation cold and trying to manage or adjust the crisis, will do better than the smarter person with a Theory they can’t let go of. The former won’t always get it right either, and will make some errors that the Theory person wouldn’t. The Theory people will then articulate what went wrong and how they would never make that mistake, and convince us that we should stop listening to those seat-of-the-pants people and listen to them, the experts. And this will work great until it stops working, at which point we will have…

You know what we will have: a hundred economists choosing up teams and telling us a dozen different reasons why we had a financial crisis. Each of those explanations will sound entirely plausible while you are listening to it. You will know with assurance that if you got into a live argument with any one of these people they would mop the floor with you, because they know this much better than you do. You would have to leave the debate floor in ignominious defeat, revealed as a fool. And yet… and yet I didn’t recently cost the American people $700,000,000,000, did I? No, it took smart people, Nobel prize winners in economics to do that. One of the small comforts of this whole crisis is also one of the most depressing aspects. There was very little criminality, very little fraud, in this whole mess. People stretched rules, but they didn’t break them. It was bad ideas that brought us to this pass.

No, it was good ideas, arrogantly imposed beyond their usefulness, which brought us to this pass. It wasn’t that these subprime mortgages were all bad loans, which anyone could have seen. Most of them have not defaulted, and will turn out to be good loans. Most of those people are still making payments. They will be homeowners and have escaped from the cycle of poverty (if you’re a Democrat) or become part of the ownership society (if you’re a Republican). It’s just that as a group these loans defaulted at a higher rate, and because we’re not sure what the final numbers on that will be – thirty years from now – we don’t know what complex derivatives that include them are worth, so no one wants to buy or sell them anymore.

Off the rant, on to the general discussion.

Pattern recognition is intelligence*. So is pattern elimination, but it’s usually much less fun. There is a certain emotional kick we get from insight, of believing we have understood some new portion of the chaotic world around us. We like that feeling so much we strive for it. We seek it out, latching on to plausible explanations. Hence, new diets. Hence, alternative medicine. Hence, management techniques, Christian living seminars, EMDR, Values Clarification, new math, tough love, and every other one-step solution that we like.

Eliminating a pattern can have the opposite emotional impact. We move from a place of assurance to a place of doubt, exposing ourselves to the sharp winds of reality. There can be compensations, of course. Eliminating someone else’s pattern, or seeing through a common misconception can be very satisfying. Yet this is chancier. We are still then left staring into the chaos, squinting to see what new pattern might be there, now that the old one is gone.

Some professions actively encourage pattern destruction as well as pattern creation in their training and practice. Medicine is one, most types of engineering another. Anthropology is notoriously resistant to abandoning ideas. New ideas are admitted for discussion, but their proponents usually have to wait until the old guard dies off before they get control of the introductory textbooks. People don’t change their minds a lot. They have their pet theory that they are known for or have sided with, and all their effort goes into defending their idea and attacking the others. This is also true of the arts and literature. A professor who reads from a marxist feminist perspective in 1982 will still be reading from a marxist feminist perspective in 2002 and 2022. She will have added and subtracted a few things along the way, but the central premises will be intact. Religion is a mix, showing both faddism and stability.
Foreign policy is an area where different groups or schools of thought have theories they believe should be adhered to. America should never go to war unless…We should be willing to trade with any nation that…Dictators always…Eastern European countries want us to…All of these are great examples of patterns that work great every time until they suddenly don’t. When patterns suddenly don’t work, the most dangerous person in the room is the one who says “But it has to work. Try it again. Again. It will work eventually if we just keep at it.”

I have a rule of thumb that an expert in any field is defined as one who knows when you can force something, and when you absolutely should not force it. Plumbers, salesmen, coaches, therapists, designers, parents, poets – the expert is the one who knows, partly on the basis of principles but equally on the basis of native intelligence, experience, or intuition, that the standard rules don’t cover this situation.

* Thus the standardised test questions Horse: Colt :: Cow: ? These are pattern questions. Even fill-in-the-blank vocabulary or What Is The Best Title questions are pattern questions, illustrating that you pick up the patterns of language use. The tests themselves are patterns of a subtler type, which is why “test-taking ability” is not necessarily an unfair advantage. After taking a few of these things, you should be picking up what the rules of fair questioning are. When they are asking you for the best answer, they are not going to throw you an all-of-the-above or none-of-the-above. It’s too ambiguous. It’s not clean. This is why these tests measure one type of intelligence very well, but fall short in predicting how people will do in ambiguous situations. As everything in life is patterned and predictable until the day that it isn’t, that’s a serious limitation of the tests.

Genesis

Reading some of the back notes on Taleb's Fooled By Randomness blog, I hit this quote about halfway down. Intriguing. I had read long ago that "Elohim" is a plural, but also a unity, with a comparison for the Hebrew for "a bunch of grapes" given. Christians should be cautioned that there is nothing about tri-unity in the word, just plural unity. Whether my original knowledge or this addition by Taleb is correct or merely a misconception I cannot say. Anyone who knows more, please enlighten us. Taleb is a Lebanese Christian by background, fluent in many languages.

I had a similar experience when, in my classical period, I tried to read the old testament in the text. I knew a little bit of the Aramaic of the Northern Levant, but not Hebrew. I opened the book, started deciphering and was shocked after reading the very first sentence of the very first book, Genesis. What had been translated into “In the beginning, G**d” was not so in the original. אלהים Elohim is a plural form that could mean “the gods”. What is so monotheistic about “the gods”? And B-reshit בראשית does not necessarily mean the beginning –I see no temporal dimension. It is from “rosh”. It is more likely to mean “principally”.

Experts

The great Indian mystic Yogi Berra once said "In theory, there's no difference between theory and practice.  In practice, there is." There is also the story about the economist who saw something working in practice and ran hurriedly back to his study to see if it worked in theory.

We have a view of experts that they know a certain amount, and so if we need to make a guess into the unknown, they are staring out from a higher platform, and are thus better prepared to make that guess.  Nicholas Nassim Taleb states that his experience is the opposite:  experts who guess beyond what they know are actually worse estimators than talented amateurs who have an awareness that they are guessing.  His thought is that solid knowledge for any decision can be sparse, and "experts" who study a topic move quickly in to the area of guesswork and speculation. But because these guesses are in consensus and are part of a culture, the experts come to believe that this knowledge is just as solid as the basic data.  This spins quickly out of control into intellectual fashions that the experts are agreed on, but are shakier and shakier with each successive floor added to the building.

Taleb suggests a reverse rule. Every yard higher that an expert believes he knows beyond what he actually does know should be subtracted from his real knowledge, as it represents something that will need to be unlearned, which is difficult.  Something like "absolute value," if you remember that concept from high school algebra - guessing a furlong beyond one's actual knowledge is equivalent to being a furlong short in actual knowledge.  Thus, even a brilliant person with a lot of knowledge can throw it away and become useless by pretending to know what is actually unknown.  Thus the virtue of humility and/or the discipline of skepticism become as important as knowledge.

I did mention that "skepticism" has only recently come to be applied primarily to religious questions, didn't I?  Until the 20th C (maybe late 19th), it applied to being skeptical about other knowledge and how we arrived at it.

Cultural Gap Link

Yuval Levin has commentary on Charles Murray's new book Coming Apart and the general topics behind it.  His view is that the formation of the New Lower Class and the New Upper Class are not that strongly related.  In his view, the former is simply falling apart, and the latter has little effect on that. 

Many of the other critics of Murray's book make the claim that wage stagnation and loss of good jobs for lower-middle and middle-class workers has driven the collapse of family formation in Fishtown, not some moral deterioration that we should tsk-tsk at.  Sometimes this job loss is presented as the result of bad economic policies left or right, sometimes as fairly inevitable given the world economy.  Steve Sailer would note that everyone is ignoring the effect of immigration, especially illegal immigration, in creating this.

I do think it is likely that the technical advances since 1960, plus the addition of women to the paid workforce, should have made Americans fabulously more wealthy, but we have squandered it and learned bad habits.  Now that we can afford to divorce, we've done lots of it, and "family" income now supports two dwellings.  We have been able to afford college majors - perhaps even the education itself - that does not produce anything of job value, so we've done that too; a lot of talent has gone into areas of refinement, or knowledge for its own sake, or enjoyment - all of which used to be available mostly to the sons of the independently wealthy.  In a constantly growing economy, there was always a way to use that knowledge.  We can now afford to entertain ourselves lavishly, and boy have we ever.  The new normal for how much choice and fun we think we should have has taken over enormous chunks of our economy.

I have opinions on all that, which I leave off for the moment in order to talk about family formation, as that is nearer to the parenting topic I have been pondering more lately.

The simplest fact is that the world has changed and is changing.  Some have the skills and attitudes the era calls for, others have to scramble.  The rules have changed.  It is now more imperative that couples remain married - which makes this data from The Witherspoon Institute troubling.  I am not encouraged that young people still endorse the idea of getting married if they don't know what that means.  It is more important to live modestly and delay gratification, because volatile economies, even if they generally reward you, are going to have scary times.

The Virginia Postrels of the world believe that new jobs will keep being added, because they always have. It's not a bad argument, but I am reminded of the opening of Taleb's The Black Swan, in which some Lebanese were certain that their battles and upheavals are temporary and everything will go back to normal - because it had for a thousand years.

Hmm.  I should see what Taleb is up to lately...

Increasing Instability

One of Taleb's general predictions in The Black Swan is that because of the interconnectedness of events, Black Swans - unpredictable events of large impact - will become increasingly common. As prediction becomes more difficult, the strategy of being nimble will be of more value than trying to anticipate and prepare for all outcomes. It is unsurprising that I relate this to theological speculations.

It will have an increasing political effect until we adjust to it. Politicians will see more and more events go astray from their planning, and opposition parties will try to get mileage out of that. Retrospective criticism should always be viewed with suspicion. Events look inevitable in retrospect, and our replays of "what would have happened" usually assume that all other events remain unchanged. Der Hahn has mentioned in the comments here (last heard from in September) that the single actor fallacy is often a part of this.

Taleb points out, quite justly, that war is enormously unstable, among the most unstable of human events, and that politicians don't appreciate that as they should. One sees him looking out the corner of his eye at Iraq at that, but he refrains from partisanship. I entirely agree with that observation. I mentioned in my last post that the war currently seems to be going well. That can change overnight.

In the face of that, how could a nation risk going to war at all? Why voluntarily enter in to an unstable situation?

Because wars tend to occur when the situation is already unstable, that's why. In an unstable situation, all actions might increase instability. Stepping up diplomacy, imposing sanctions, sitting on your hands, and taking a break for English muffins might all unleash events which are even more dangerous. Not going to war is an action with long-term consequences, and as PJ O'Rourke notes "Peace Kills." Morally, the situation has not changed from simpler times, though the consequences are more dire.

The Black Swan

I have read less than half of this, and am now giving it to my eldest for his birthday. I hope to get it back. This quote jumped out at me.

One spring day a few years ago, I was surprised to receive an invitation from a think tank sponsored by the United States Defense Department to a brainstorming session on risk…The symposium was a closed-doors, synod-style assembly who would never have mixed otherwise. My first surprise was to discover that the military people there thought, behaved, and acted like philosopher – far more so than the philosophers we will see splitting hairs in their weekly colloquium in Part Three. They thought out of the box, like traders, except much better and without fear of introspection. An assistant secretary of defense was with us, but had I not known his profession I would have thought he was a practitioner of skeptical empiricism…I came out of the meeting realizing that only military people deal with randomness with genuine, introspective intellectual honesty – unlike academics and corporate executives using other people’s money. This does not show in war movies… When I expressed my amazement to Laurence, another finance person who was sitting next to me, he told me that the military collected more genuine intellects and risk thinkers than most if not all other professions. Defense people wanted to understand the epistemology of risk. Nassim Nicholas Taleb The Black Swan.

For more on the remarkable Taleb, who wrote Fooled By Randomness, his wikipedia entry is here.

Education Update

I think the link is fixed.

There was a New Yorker cartoon someone gave to me:  Mensa Does Improv. “We’ll need a suggestion of a place, an occupation, a family member, an extinct language, a Byzantine Despot, a transuranic element, and a word that contains every vowel.” Right up my alley, though I thought Bela III was Bela IV.  So sue me. I can stand back and admire the ridiculousness of that knowledge, because I know almost nothing about the difficult ones.  Just enough to make an answer.  So when Taleb was criticizing that I nodded automatically.  But going back and rereading what he wrote, in light of the (excellent) comments here, NNT is saying something a bit different.  It is not so much superficial knowledge – which can, in fact, at least give you some structure – but that the purportedly deeper knowledge generally isn’t.  The college professors and popular authors are going to be actively damaging, because they will teach you things that aren’t so.  They will sound plausible, because plausibility is their stock-in-trade.  But they won’t actually hold up under scrutiny. You will have to unleartn things in order to become wiser.

Consider: there are websites devoted to reporting cockamamie things that some academic is teaching or writing. Conservatives and curmudgeonly types love these stories and they pass them along for enjoyment.  There are new idiocies every day, always a fresh supply.  I have usually just shrugged and thought to myself “Well, that’s just one knucklehead at one college.  Let’s not get carried away thinking that they all believe that.” Yet what other industry tolerates such an enormous amount of quackery, not removing these fools?  Where is a med school that has even one professor who says that X-rays are racist? Where are the auto mechanics who insist on indigenous methods of repair, or house painters who insist Western methods are uniquely bad and always oppressive? Is there a burgeoning movement among administrative assistants to switch to other calendars and concepts of time? Lord knows all of these professions get things wrong – but not bizarrely wrong. Cf. Anthropology departments, History departments, where these threads run through many of the courses, and effloresce into the truly absurd at more than one spot.  Who else does this?

While writing this, Bird Dog linked to a related section of Taleb’s Antifragile posted at Zero Hedge.  I’ll just let Nicholas speak forhimself for a bit.