Black swan theory

[Julian Delphiki]

Just coming out in Finnish, i think library will have it soon but no reservations yet (they did not have the original at all).

 

[gallego]

So the perceived weakness of the American pupil in conventional studies is where his or her very strength may lie.

This one particular line sounds a bit like a cop-out for our falling academic standards, saying "we invent lots of cool things even if we can't keep up in basic schooling." The Americans that invent or stumble upon big things are usually pretty smart and academically prepared. America does have a kind of enterprising culture, and it also has a lot of resources available in its universities and technological centers. But many of the people doing research in Massachusetts and Silicon Valley are foreigners. Look at the labs in these places; they are full of people from outside the US. I think the American edge in research is in large part financially based and the "perceived weakness" that the author mentions is still a weakness, not a strength.

 

[Gogf]

Just got it. I'll let you guys know how it is .

 

[Traitorfish]

Wow. Four paragraphs in and it becomes a bitter anti-European whine, complete with the incorrect attribution of credit for inventions and the confusion of fashion with technology! I'm instantly convinced that this guy isn't a total jackass.
(Denim jeans being Italian, the internet being Swiss and MP3 players being South Korean...)

 

[Gogf]

Wow. Four paragraphs in and it becomes a bitter anti-European whine, complete with the incorrect attribution of credit for inventions and the confusion of fashion with technology! I'm instantly convinced that this guy isn't a total jackass.

You don't think denim is a technology?

 

[Traitorfish]

You don't think denim is a technology?

Maybe, but the fact that it's widely worn is not because it represents a major technological advance over other trousers...

 

[Fifty]

I'm not sure how the idea that "future expectations are unpredictable" is a novel one. At least, I recall when I was reading about financial engineering that they have always taken future stuff as completely unknown. That's why financial engineering equations involve stuff with random variables from physics.

Perhaps this idea is just new to economists? I know, at least, that the mathematicians and physicists who lead the world in financial engineering tend to have a pretty dim view of economists (at least that's what I gleaned from what I read on the subject).

 

[.Shane.]

I think his point is that anyone who thinks they know what's happening in the future (i.e. economists) is fooling themselves. He believes using bell curves to explain things is fool's gold. Don't be afraid to read it Traj since it's throwing a lot of traditional conventions out the window.

Interesting ideas. Nice thread.

I already agree to this to an extent. One of the first things I tell my history classes is that the idea that "history repeats itself" is an untruth. I use that as a kind of launching pad to the idea that the lessons of history can offer us points of illumination and can certainly inform the present, but one shouldn't wholly plan based on that.

Isn't the internet and all its derivatives a giant black swan of sorts?

Conversely, not all drivers of innovation are black swans. To me the value in this is to not be afraid of science, of experimentation, and to not be rigid in your thinking in terms of isolating orthodoxies.

Also, a kind of corollary to this is how people will often use things in wholly different or unique ways than the inventor may have foreseen or expected. Again, much of the internet is an example of this. In fact, I almost think that should be a "Law" of internet development.

 

[Whomp]

Just so our European friends are aware Taleb was raised in Lebanon (where he experienced a millennial black swan event) and came to the US in his adult years. Listening to a couple interviews today (from his website on NPR, San Fran public radio and Colbert show) he is not without his detractors and he seems to enjoy questioning and debating pundits in many arenas (IE Black-Scholes option pricing and Nobel Prize winners).

I think what I'm trying to engage here is the black and white view we typically get in discussion threads. It's not whether we talk about finance, climate change, religion,politics or war (All the things you don't bring up at a cocktail party).

I think once people realize that wisdom is admitting that you don't know anything precisely. Things are quite chaotic and it's a question of whether you can recognize these "black swan" events as they're happening around you. I think I've recognized many over my life and feel lucky I have.

Happy New Year all.

 

[Gogf]

Well, I've started reading the book, and, honestly, I'm not all that impressed. The guy speaks in massive, abstract generalizations, and he really doesn't say very much except that people need to "prepare for black swans." His Forbes article was what convinced me to buy the book, though, so I'll keep reading and hope it gets better as the book progresses.

(Of course, I'm at the VERY beginning of the book, so take this with a grain of salt.)

 

[Narz]

Sounds interesting. However, I'd argue that "being creative" and "random tinkering" are not necessarily the path to success he makes them out to be. ("Random tinkering is the path to success. And fortunately, we are increasingly learning to practice it without knowing it--thanks to overconfident entrepreneurs, naive investors, greedy investment bankers, confused scientists and aggressive venture capitalists brought together by the free-market system.")

Most random tinkerers produce little of value (marketable, unique value anyway). And the ones that do generally were hard workers. Not to say that I don't believe innovation and "free play" are important but without hard work, practice and at least some knowledge of what you're doing (in your field) it's unlikely you'll achieve anything noteworthy.

"unlike European schooling, American education is not based on equation drills and memorization. "

Yeah, now it's based on multiple choice. Which is one of the reasons why our kids generally can't compete w/ foreigner ones (intellectually).

Wow. Four paragraphs in and it becomes a bitter anti-European whine, complete with the incorrect attribution of credit for inventions and the confusion of fashion with technology! I'm instantly convinced that this guy isn't a total jackass.
(Denim jeans being Italian, the internet being Swiss and MP3 players being South Korean...)

It does seem like some guy trying to make a buck off the "outside the box" trend & mention closet patriotism (Americans who still think America is the greatest but are too PC to say it just like so).

 

[Narz]

Well, I've started reading the book, and, honestly, I'm not all that impressed. The guy speaks in massive, abstract generalizations, and he really doesn't say very much except that people need to "prepare for black swans."

That is the trend these days.

Reminds me of a little book called The Dip that I read in Borders one evening.

It's 85 pages can basically can be summed up in a paragraph and yet it sells for over $10.

I haven't read the "Black Swan" book though so I can't rightly compare the two. Let us know if it gets better or if reading a few mixed Amazon reviews of it is as good as reading the whole book.

 

[Enkidu Warrior]

'Useful inventions are generally not used in the way they designed to, therefore directed research is bad.'

Huh? Just because the application was not thought of during the research process, doesn't mean that we don't owe the invention to directed research in large measure. The general process in the very examples he cites is directed research -> tinkering -> useful invention. Quite why this is surprising I don't know, but anyway, I'm mystified as to why he's dumping on directed research just because it doesn't always lead directly to an application. We've progressed a bit further than steam engines, I see no evidence that abandoning the directed aspect of initial research would achieve anything.

Obvious observations + weird tangential Euro bashing + baffling unsupported conclusions = not interested.

 

[JerichoHill]

Not new to economists. I believe there's a theory on the behavior of financial markets that's called "random walk". Not new to experimental economists.

The popular conception of economists here on CFC is quite contrary to the majority of economists and their work. The politicized economists grab the press headlines, but they're a small percentage. Most economists are data-driven stat jockeys working for local groups to develop local economies, or they're policy wonks internal to the govvie you never know about (unless one posts on CFC)

 

[luiz]

The theory sounds interesting enough (even if as others have pointed out the idea that much development happens somewhat randomly is not new - Hayek wrote about it decades ago).

I just don't like the fact that the author uses that black swan metaphore, it makes the text look like some esoteric "self-help" book. I would not even check a book with that name on a bookstore, what would be a shame as this one is apparently interesting.

 

[Julian Delphiki]

I began to read The Black Swan yesterday, currently i'm on chapter 6. Seems like an OK book, but i'll have to read further to find out if this is really anything special.. this far, no.

 

[Masquerouge]

Now that I've read Whomp's summary of it, is there anything more in the book?

 

[brennan]

Hello? The Mule? Second Foundation by Isaac Asimov? Probably written by 1970.

History is made by individuals. Alexander the Great. Ghenghis Khan. Timur the Lame. Napoleon. Hitler...

 

[Whomp]

I don't know if it was subconscious or not but I left the book in a cab Friday.

I'm trying to figure out what the point of explaining which statement is broader...

John is a man. He killed his wife.
John is a man. He killed his wife for an inheritance.

 

[C~G]

I'm trying to figure out what the point of explaining which statement is broader...

John is a man. He killed his wife.
John is a man. He killed his wife for an inheritance.

Say again?

I mean how it was analyzed?