FOOLED BY RANDOMNESS

Taleb, Nassim (2004) Fooled by Randomness, New York: Random House, 317

(The book has been updated with 2 prefaces and is rebound in hard back. Many of the references occurred recently.)

Fooled by Randomness is just that. We want an orderly world. We don’t want to die or be in pain. What Taleb does not say is that we really do construct a reality that keeps reinforcing us to believe that the present and the future will be okay. We have cyclical days of the week, a standard time, and numbers for the years ahead. This is the Gaussian world of the bell curve.

Taleb is suggesting that all of us are losers and there are lucky fools who make it to the top.The world is filled with black swans. That means events that are splendid or horrific, but unusual that destabilizes society.

As there is so much in this book and Taleb is thought to be one of the most profound thinkers of our time, let me just say that he can write for the masses and he can write for the academic. He does make up new terms and the writing structure has been improved upon by the arrangement of the chapters.

1. Taleb suggests that he is the premier “lucky fool” that he is a sucker for order and tradition. He wants to emotionally live in that world too. He admires the “expert’ who is the first to admit how little he knows.
2. He criticizes historians to suggest that there are historical determinisms when they do not take into account alternative histories if certain events had not taken place.
3. He is brutal with economics. Economics became the king of the soft sciences or social methodologies when it was introduced to hard number, ratio math. Soon elegant econometric models were derived that surpassed the other social methodologies. However, they were often wrong. Credit Paul Samuelson for introducing the math and glorifying the recurring regularities assumed by it, the order that are rational. Economics without math becomes another descriptive soft methodology. Traditional economists are outraged. He cites numerous sociologists and psychologist on how the brain is structure and how we are non rational.
4. He is very much unimpressed with traders who have outstanding successes for a few years. All they need is really bad investment using their current strategies and they are doomed.
5. Entrepreneurs who discover a novel technology or innovation he believes should male a great deal of money , but CEO’s who works up the ladder do not deserve the money they make. There was a time in recent history when the top dog made 20 times the janitor. Now they make a thousand times as much.
6. All along he speaks as if he is for the little guy who really knows that he doesn’t know anything. He continues to introduce contradictions in the society and yet his politics and religion don’t match his analysis.

Let’s start with the first, he is a libertarian. Libertarian capitalism without regulation now appears to have driven the United States into the toilet. If all or most of us are losers living in a socially constructed non-reality that is filled with huge black holes, why is he on the Right? Most of us will hit bottom and with Libertarianism if there isn’t a charity that can help you out, you are dead as dust.

The second is that he is a member of the Orthodox Church. God is not the author of randomness or is he or she? God is anthropormorphic in the church and intervenes in one’s life and yet Taleb maintains that in the social world is really without order. There are correlations, yes but not hard facts. He may not even be a Unitarian. Even the religious humanists, Trinitarian anthropomorphic and pantheist agree that the world has some meaning. That is what brings the Unitarian church together. Orthodox Church is filled with pre-modern certainties. They may be correct.  This not to fault the church in anyway. It is to ask, “What is Taleb doing in it?

At any rate, regardless of Taleb’s background, he is damn smart and he  knows it, because when he gets up in the morning, he tells himself that he is a damn fool. However, he is a lucky fool. Unfortunately, among the rich and learned, my guess is that they don’t say such things.