The Parallax Brief


Unrepentant Subjectivity on Economics, Politics, Defence, Foreign Policy, and Russia

Nicholas Taleb, David Hume and the Arrival of the Unimaginable

Nassim Nicolas Taleb is consumed by the unimaginable, and his life is built on expecting its arrival. Where the Parallax Brief sees bolts from the blue that lead to wildly unforeseeable outcomes, Taleb sees ordinary occurrences.

Taleb’s heroes are empiricists, like David Hume and Karl Popper, who believed that only those things understood through experience can be accepted as real. But Taleb’s empiricism is that of an extreme skeptic, almost an anti-empirical empiricist. He believes that nothing can ever be ruled out — that random events cannot be understood through statistical distribution, even when one’s past experience suggests as much — and that the impossible occurs far more regularly than humans accept.

Taleb’s views are encapsulated by one of his favourite Hume quotations: “No amount of observations of white swans can allow the inference that all swans are white, but the observation of a single black swan is sufficient to refute that conclusion.”

This makes Taleb extraordinarily relevant and important today.

This importance multiplied when Taleb crafted a book on what he, and John Stuart Mill and Hume before him, termed ‘black swan events’: — events written off as impossible but which actually occur, with disastrous consequences, far more frequently than is assumed — and had the good fortune (or prescience) to have it published on the eve of the credit crunch.

It turned Taleb the leftfield doomsayer into Taleb the celebrity soothsayer.

Taleb’s story is engaging and his theories intellectually fascinating, and both are detailed in an extraordinary Malcolm Gladwell New Yorker essay from a pre-crunch, pre-Black Swan theory 2002. Through the explanation of Taleb’s ideas, we learn of Victor Niederhoffer, a supposed genius stock trader who lost it all; why world renowned stock market players like George Soros and Warren Buffett might just be flat lucky; empiricism and its relevance today; and just what it is about the human mind that leaves our societies vulnerable to Black Swan events.

Highly recommended. (Click the link below.)

Blowing Up, Malcolm Gladwell, New Yorker, April 22nd and 29th, 2002

Filed under: Economics, , , , ,

One Response

  1. says:…

    Спасибо. Появилась классная мысль, но нуждается в глубокой реорганизации старой мысли, займусь в выходные. Естественно результатами…

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