Nassim Nicholas Taleb coins that phrase, writing
What we have been seeing worldwide, from India to the UK to the US, is the rebellion against the inner circle of no-skin-in-the-game policymaking “clerks” and journalists-insiders, that class of paternalistic semi-intellectual experts with some Ivy league, Oxford-Cambridge, or similar label-driven education who are telling the rest of us 1) what to do, 2) what to eat, 3) how to speak, 4) how to think… and 5) who to vote for.
I have had a couple of people compare my Specialization and Trade to Taleb’s work. For what it is worth, my thoughts on the similarities.
1. We both believe that highly-educated experts over-estimate what they know.
2. We both doubt the ability of “science” to understand the human world, including the economy.
3. We both think that statistical analysis as commonly practiced is unreliable.
4. We are both outsiders relative to academia at present.
I think that Taleb is a much more colorful writer. I tend to be more risk-averse, both in terms of substance and style.
You are also much more charitable!
And you’ll never publish anything as bad as his book of aphorisms.
Tabel is a valuable gadfly, but his acerbic style–really, it is often ad hominem–loses him many potential supporters (like me). Moreover, he greatly exaggerates the novelty of his claims (Black-Scholes is wrong, asset returns are not normal, Black Swans i.e. peso problems exist, etc.).
Of course, a kinder, gentler Taleb likely would not have as many fans.
I very much enjoy Taleb. There is a woeful undersupply of intelligent people willing to speak their mind as pointedly as they would like without worrying about offending any one of 10,000 subgroups who nowadays feel victimized (and who in aggregate probably represent 75% of the population).
IYI <>
“The IYI has been wrong, historically, on Stalinism, Maoism, GMOs, Iraq, Libya, Syria, lobotomies, urban planning, low carbohydrate diets, gym machines, behaviorism, transfats, freudianism, portfolio theory, linear regression, Gaussianism, Salafism, dynamic stochastic equilibrium modeling, housing projects, selfish gene, Bernie Madoff (pre-blowup) and p-values. But he is convinced that his current position is right.”
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I didn’t think his aphorisms were that bad, but I was just looking for a few good ones. Most of us can’t be La Rouchfoucauld (sp?), after all. 300 years of aphorism mortality may be helpful to winnow the chaff.
I enjoy reading Taleb immensely. He has many faults, but (for me) the ride is worth it. He makes me think and laugh, too–and sometimes he’s right!
It would be great to know that some of his assertions were fact-checked, such as
* Lebanon has been destroyed and rebuilt 6x in history
* a famous 19th century french MP and mathematician refused to correct mispelled words because he thought it was a waste of time
etc.
Especially I would like to see careful investigation of his categorization of fields of study / practice / craft into
Subjects that have “experts who are experts”
and
Subjects that where the experts are not experts.
Tetlock and Meehl provide some insight, but more work needs to be done on “expertise.”
Practically everybody over-estimates what they know- highly educated and uneducated alike. That isn’t the problem.
Good point. Is the problem that lots of others overestimate how much the highly-educated know because they are highly-educated?
That and the fact that it is the highly educated have more power to act on their miscomprehension.
And more power to affect the thinking of the intellectually vulnerable (e.g. college students).
One important difference between you and Taleb is that – CURRENTLY – Taleb can deadlift more weight than you can (mid 300s). Unlike some other gaps between you and Taleb, this one is worth closing – and I believe you can do it. It’ll just take some time. The consequences for your health will be very positive and fulfilling.
I found Nassim Nicholas Taleb to even more smug than the average Vox writer. Wow! He went through all the failures of various elites the last 100 years and doesn’t pretend to notice any successes.
Frankly his writing a very smug version of Zero Hedge. In reality both are near ‘elites’ offering nothing useful.
Enlighten us- what successes?
To be replaced with flatterers, panderers, and know nothings, for better entertainment value no doubt.
I find Taleb’s point on Black-Scholes formula and practitioners to be incorrect and badly written in Taleb’s Antifragile. He talks about his expert trader throwing sheets away. It was not explained exactly what the sheets were, but he meant sheets of theoretical values for options.
I knew that because I was paid by some of practitioners who were trading on the Chicago Board of Options Exchange(CBOE) to write a program to generate those sheets using the Black-Scholes formula as in came from the textbook. There was an additional parameter they added to adjust for variations in how the options were trading from the formula, but these were practitioners who were using work by the theoreticians. Now maybe the expert that Taleb knew internalized everything, and in extraordinary circumstances like 9/11 the traders weren’t going to treat the theoretical values as gospel, but most of the times most of the traders on the CBOE used similar type sheets in the late 80’s
If all traders believed that the theoretical price was correct, would not any trader seeing an option traded at a higher than the theoretical price sell it and would not any trader seeing an option traded at a lower than the theoretical price buy it? Would this process not make the real price roughly equal to the theoretical price?
We have just established that “the sheets” are in fact based on a shared belief. If we throw the belief away, should not we throw away the sheets?