PRECISE KNOWLEDGE

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.com

The Black Swan

Written by: Nassim Nicholas Taleb

Narrated by: David Chandler

NASSIM NICHOLAS TALEB (AUTHOR)

Nassim Taleb blows the whistle on precise knowledge.  Taleb suggests precise knowledge is a fiction whether recorded as history or projected as future.  Taleb argues history is distorted by the historian and the future is unknowable.  Taleb is disdainful of experts, beginning with oxymoronic titles like “social scientist”
and ending with Nobel Prize winning economists.  Taleb is a skeptic in the sense of a Montaigne, but with one monumental difference.  Taleb is flaunting while Montaigne is self-effacing.

STOCK MARKET CRASH 1987

Several years ago, an associate of mine said he worked to become rich.  In his mind, being rich meant no one could tell him what to do.  Taleb reminds me of that person.  “The Black Swan” is the title of Teleb’s book.  The title is a metaphor for events that are unforeseen and unknowable; e.g. events that are so consequential they change the future.  In Taleb’s view the stock market crash in 1987 (black Friday) is such an event.

SERENDIPITY OF LIFE
KARL POPPER (1902-1994 PHILOSOPHER THAT BELIEVED EMPIRICAL SCIENCE COULD NEVER BE PROVEN; ONLY FALSIFIED)
BENOIT MANDELBROT (1924-2010, POLISH BORN MATHEMATICIAN, A MASTER OF THE THEORY OF FRACTALS)

 

Taleb’s thoughts slap expert’s faces.

 

 

 

His theory of unpredictability makes fools of economists, political pundits, news purveyors, stock brokers, social scientists, and many (if not most) philosophers and mathematicians.  (Two exceptions are Karl Popper and Benoit Mandelbrot. ) The credibility of Taleb’s argument is reinforced by the serendipity of life and expert’s underestimation of new discoveries’ consequence.

RESULTS OF LINEAR THINKING VS. ACTUAL EVENTS

One of Taleb’s insightful observations is that human consciousness of life is linear while nature creates life serendipitously.  The human mind demands story continuity while nature simply follows the physics of life.  Nature is an opportunist while humans tend to believe there is a reason for every consequence.  Taleb makes that opinion concrete with examples like the 1987 stock market crash.

QUANTS (Experts of quantification, hired by investment bankers to create instruments of financial destruction.)

No one perceived the potential of a market collapse because of faulty computer algorithms that influenced stock market trading.  No one, including Taleb, forecast computer trading fallibility.  However, Taleb’s theory of “The Black Swan” compelled him to create a fail-safe for an unexpected market collapse.  He hedged his portfolio to become a rich man.

Taleb suggests, at best, we live in a world of probability without any definitive assurance of cause and effect.  That suggested truth discounts every news report, and every prognostication made by human beings.  Taleb says he does not listen to the news because facts are distorted by the consciousness of human beings.  Luck and fate are a reflection of Taleb’s cynical view of experts.  It reminds one of today’s American President.

Taleb implies that reverse engineering the brain to enhance A.I. is a blind alley.  On the bright side, the inference is that computers will never replace human abilities.  The dark side is that computer potential will always be limited by human abilities.

BUTTERFLY EFFECT (THEORY OF FLAPPING WINGS CAUSING HURRICANE)

Much of what Taleb argues is reinforced by the science of experimentation.  Physics suggests we live in a probabilistic world.  No outcome is perfectly determinable.  Life has grown into complexity from simple beginnings replicated with minuscule changes that occur over time.  The human brain thinks of life in geometric forms (straight lines, triangles, squares, etc.) while life is as jagged as a mountain.  Life is interconnected with a butterfly’s flapping wings and “spooky action at a distance”.  It grew from simple cells to chains of DNA.  In life’s complexity, there is no certainty; there is only probability.

Despite Taleb’s belief in life’s improbabilities, he considers himself an optimist.  His point seems to be that there is no such thing as precise knowledge but with knowledge of the existence of “…Black Swans”, human beings can expect the unexpected.  In that expectation, it is possible to live life joyfully, if not perfectly.  One wonders if President Trump is a black swan or something more sinister.

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