Nassim Taleb is no friend of academics

http://www.fooledbyrandomness.com/notebook.htm

Nassim Nicholas Taleb’s latest from Opacity, no 114 titled “Where is the evidence?” launches into Nassim’s current interest in how we know things given the lack of evidence (That is probably summed up poorly, but it is a focus on the absence of evidence/evidence of absence problem and humanity’s gross ignorance. Taleb mentions the concept in the hour long podcast at EconTalk if you’ve got the time to listen to it).

Taleb’s admonition of academia is brutal — he basically says Ben Bernanke and Larry Summers are “arrogant, formal-thinking civil servants, and Ivy-league semi-retards.” Don’t pull any punches there Nassim!

I’m still not convinced the admonition about negative advice is exactly right, but why quibble? (See prior discussion on Nassim Taleb and Expert Advice)

Finally, I’ve ordered two books by John Gray, who Taleb cites as the “greatest living thinker.” And to think I hadn’t even heard of the guy.

Note: If you are like me, and wants to be updated on Taleb’s latest posts to his non-feed-friendly blog, feel free to use this change detection RSS feed I created: Taleb’s Opacity Change Detector Feed.

I leave aside the confusion absence of evidence/evidence of absence–and the misunderstanding of the very notion of “empiricism”. It is a fact that in the real world of our daily decision-making 1) we do not have much evidence of most relevant things, yet we need to take action; 2) in most situations, “true/false” is never symmetric (one side is more harmful than the other), so the burden of evidence is one-sided. Which is why once these fakes “doing science” lose their tenures after the endowments (and charity) run out of funds, they will be barely fit to do anything in the real-life ecology. I wonder what you can do with an unemployed, say, academic orthodox economist. You could do better with non-post-academic cab drivers. Clearly those the most fit at dealing with “just evidence” will be idiot savants outside their evidence domain.

And I can expect that with the SP500 about 20% lower than here, you will see tenures unexpectedly evaporating. The silver-lining of the crisis, perhaps, with the de-academification of society.

So let me take this into more interesting territory, and express my anti-social-planner views. Even more that in Hayek’s days, the ecology of the real world is becoming too complex for Aristotelian logic: very, very little of what we do can be safely formalized, meaning asymmetries matter more than ever. Which puts the Western World today at the most dangerous point in its history: unless we get the Bernanke-Summers crowd out of there, it will eventually be destroyed by the machinery of arrogant, formal-thinking civil servants, and Ivy-league semi-retards.

Finally, beyond the current mess, I see no way out of this ecological problem, except through that tacit, unexplainable, seasoned, thoughtful, and aged thing crystalized by traditions & religions –we can’t live without charts and we need to rely on the ones we’ve used for millennia.

Nassim Taleb on Experts and Negative Advice

Nassim Taleb’s latest from Opacity #113 titled Negative Advice; Why We Need Religion makes the brief case that human beings are “suckers for charlatans who provide positive advice (what to do), instead of negative advice (what not to do).” Below is the entirety of his post, take a read (Emphasis mine):

At the core of the expert problem is that people are suckers for charlatans who provide positive advice (what to do), instead of negative advice (what not to do), (tell them how to get rich, become thin in 42 days, be transformed into a better lover in ten steps, reach happiness, make new influential friends), particularly when the charlatan is invested with some institutional authority & the typical garb of the expert (say, tenured professorship). This is why my advice against measuring small probabilities fell on deaf ears: I was telling them to avoid Value-at-Risk and the incomputable rare event and they wanted ANOTHER measure, the idiots, as if there was one. Yet I keep seeing from the history of religions that survival and stability of belief systems correlates with the amount of negative advice and interdicts — the ten commandments are almost all negative; the same with Islam. Do we need religions for the stickiness of the interdicts?

Telling people NOT to smoke seems to be the greatest medical contribution of the last 60 years. Druin Burch, in the recently published Taking the Medicine

The harmful effect of smoking are roughly equivalent to the combined good ones of EVERY medical intervention developed since the war. (…) Getting rid of smoking provides more benefit than being able to cure people of every possible type of cancer”

It is easy to read Taleb’s argument as meaning that negative advice is both more routinely followed and better than positive advice. However, this is clearly not the case as there are countless examples of bad negative advice. For example, look at the “Don’t eat fat” mantra that developed over the past few decades. This is negative advice that I believe Taleb has personally acknowledged as poor (Taleb is a friend of Art De Vany’s and an adherent on some level to the low-carb evolutionary nutrition/fitness theory). The low-fat or lipid hypothesis that has been the driving force behind public health policy over the past few decades may ultimately be proven to have caused the premature deaths of millions of human beings (via cancer, cardiovascular disease, Alzheimer’s, obesity, diabetes, etc.). Clearly, not all negative advice is good to follow.

However, negative advice or bright-line rules seem to take hold more strongly than positive advice. Christianity and Islam are the two most dominant religions of the world. Both contain prescriptive, bright-line rules. In the case of Christianity the prominence of rules is particularly ironic: Jesus openly argued for the destruction or irrelevance of the law (The bright-line rules of Judaism at the time). Regardless, the dominating sects of both Islam and Christianity appear to have more negative advice (What not to eat, drink, do) than positive advice (Love your neighbor), and the negative advice tends to be much more concrete: “Do not commit adultery” is much more cut-and-dry than “Love everyone.” It’s the time-tested success of hard-line, negative-advice-based religions that lends the most support for Nassim Taleb’s argument.

Agreeing somewhat with Taleb’s theory, I think it is too limited in scope, and should be expanded and clarified. Simply put: human beings are sucker’s for bright-line rules be they positive or negative; adherence to and success of these bright-line rules is dependent upon their prescriptive strength. Based on conclusions drawn from observing health and religion idealogies, it seems that negative advice promotes the greatest adherence and zealotry, both of which lead to idealogical success**.

That it is human nature to want others to tell us what to do seems hard to deny. Why are we this way?

I just finished reading Daniel Gilbert’s Stumbling on Happiness (SoH), which discusses how we perceive things and how that affects our happiness. One argument Gilbert makes is that it is human nature to prefer action over inaction. This is because it is easier to justify our action-based decisions after the fact because they have clearcut consequences whereas inaction does not, making inaction difficult to imagine and thereby difficult to justify. I would add to this that I believe it is human nature to put greater faith in our ability to control outcomes; therefore, we act out of the misguided belief that our action can elicit the responses we want.

Regardless of the source of our preference for action, I believe it’s from this bias that springs the need for bright-line positive advice. For proof of concept, look no further than the pervasive mentality that, “We must do something to mitigate the economic crisis!” Charlatans and politicians fully exploit the bias of action over inaction to propagate their own prerogatives.

On the other hand, there is a second contention in SoH that seems an extension of the preference for action over inaction, which is that the elimination of choice can trigger our psychological immune systems. Once triggered, these systems work to make us happy or content with a more restricted existence. Imagine this: having bought the farm, you’re quick to articulate the benefits of the purchase and figure out a way to love the cows. In keeping with this understanding, we can readily explain the human preference for ideologies that drastically reduce choice via negative, bright-line rules.

Thus, here we have two psychological explanations for why humans crave bright-line rules, both positive and negative.

I’d imagine Taleb would agree: life is incredibly more complex and uncertain than our bright-line rules, either positive or negative, allow. We should be aware of our tendency towards dogmatic over-simplifications and be wary of overly prescriptive, bright-line advice.

* It’s always interesting how Jesus is written to have claimed he came to free man from the law. Yet Christianity, via any number of particular denominations like Catholicism or Protestantism all adhere to stringent rules and edicts.

** I can’t help but wonder if its just easier to prescribe negative advice than positive advice even though both are likely to instill dogmatic behaviors.

Further reading