Book Review: Fooled by Randomness, by Nassim Nicholas Taleb - Part 1 ~ by Ransom

 

The books of Nassim Nicholas Taleb attempt to address several of the foibles of human thought that lead us to behave in ways that serve us poorly.  We are storytelling beings who see patterns in randomness and thus wildly misunderstand the risks we face in the real world.

As stated in the preface to Fooled by Randomness, "It is as if there were two planets: the one in which we actually live and the one, considerably more deterministic, on which people are convinced we live."

Rather than condense each book into a single review I will go through them in somewhat of a book club form, covering a handful of chapters every few weeks.

Taleb is an engaging author with a knack for conveying surprising ideas in an entertaining way.  He is also an arrogant ass who sometimes explains points by quoting Ancient Greek proverbs without offering an English translation.

I encourage you to pick up his books and read along with me.  There is a lot of wealth in these pages.

Fooled By Randomness: Prologue

"This book is about luck disguised and perceived as nonluck (that is, skills) and, more generally, randomness disguised and perceived as non-randomness (that is, determinism).  It manifests itself in the shape of the luck fool, defined as a person who benefited from a disproportionate share of luck but attributes his success to some other, generally very precise, reason."

There is a lot of data in this world.  Discerning what if any is related to a particular point is difficult.  Our marvelous human aptitude for pattern recognition has no way to know when to stop and our desire to believe that we are on top of things disinclines us from recognizing it.

As a result we see patterns whether they are there or not.  We write about these patterns, we splash them on television, we uphold the triumph of the genius.  When the pattern is false and the genius is exposed as a onetime-but-no-longer beneficiary of luck he falls out of sight and is replaced in our attention by the next genius.  Many parts of life are spent ridding jagged ups and downs made so by forces outside our or anyone's control, but in our pride and confusion we attribute the ups to our own insight.  We cognitively and culturally only propagate the flashy parts and so broadcast the confident misattributions of success.

And so we learn the wrong thing.