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Fooled by Randomness, The Black Swan, The Bed of Procrustes, Antifragile

by nassim nicholas taleb
random house, 1,568 pages, $70

Skin in the Game:
Hidden Asymmetries in Daily Life

by nassim nicholas taleb
random house, 304 pages, $30

Boethius’s ambitious goal to synthesize all of Plato and Aristotle was tragically interrupted by political intrigue. Dante, placing him in Paradise, identifies Boethius only as “the holy soul who made manifest the deceits of the world” (l’anima s­anta che ’l mondo fallace / fa manifesto), which, not to put too fine a point on it, makes Boethius the patron saint of bullshit detectors.

In Paradiso, Boethius joins other holy theologians in a circle as if to comprise a harmonious clock, a “glorious wheel,” alluding perhaps to the more troublesome Wheel of Fortune Boeth­ius made famous in his Consolation of Philosophy. There, Lady Philosophy reminded Boethius that the unforeseen misfortunes of the world cannot harm a true lover of wisdom: Even inscrutable, unpredictable fortune is an instrument and manifestation of God’s perfect Providence. In Latin, temeritas means both rashness and randomness, and Lady Philosophy brings to Boeth­ius not only the consoling stability of reason, but also the authentic courage to face reason’s abusers.

Ancient philosophers were familiar with the limits of reason and the stormy seas of life, and as the figure of Lady Philosophy suggests, Boethius’s treatment of fortune owes at least as much to pagan thought—especially Plato and a Neoplatonism informed by Aristotle—as to Christian teaching. The existential import of chance, fate, and fortune is so closely identified with Greek and Roman thinkers that, when fourteenth-century artisans planned the elaborate inlaid marble floor tiles of the Cathedral of Siena, they framed the Wheel of Fortune with quotations from Euripides, Aristotle, Epictetus, and Seneca.

Seneca is the favored philosopher of Nassim Nicholas Taleb, our most important contemporary theorist of chance, luck, and the vagaries of life. Taleb has made the art of bullshit detection a way of life, and he appreciates Seneca in particular because he found in Stoic teaching not consolation for misfortune so much as spiritual discipline for handling fantastic wealth. (Seneca’s quotation in the Siena marble: Magna servitus est magna fortuna, “Great fortune is a great slavery.”) Taleb is a successful options trader, but he is more proud of what he is not: a sucker, a charlatan, or a slave to money or man. If Boethius represents courage in the face of unfortunate suffering, Seneca evokes disciplined emotional regulation, prudent decision-making, and generous responsibility in the face of great blessings.

Taleb’s first book shows his roots as a trader, risk analyst, and expert in the mathematics of probability. In Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets (2001, revised 2004), Taleb views probability theory as a method for dealing with ignorance. But the “life” of the subtitle is significant: Taleb’s attention to mathematics and markets is rooted in fundamental questions about the human condition, especially questions epistemological (understanding the limits and tricks of the human mind—for instance, in attributing success to expertise when luck is a better explanation) and moral (finding happiness). Taleb describes himself as a skeptical empiricist: “We favor the visible, the embedded, the personal, the narrated, and the tangible; we scorn the abstract.” (Plato, Aristotle, and scholasticism are, in this early work, criticized for abstract rationalism; more on that ­momentarily.)

Fooled by Randomness earned ­Taleb the beginning of a cult following, but his second book made him a celebrity. The Black Swan: The Impact of the Highly Improbable came out a year before the 2008 market crisis and was revised two years after. The idea of a “Black Swan” has become identified with large and unexpected economic events, and Taleb’s authority is assumed to be that of a far-sighted hedger. But finance is only one field in which the ideas of The Black Swan play out. The book urges the application of epistemic humility to a wide range of social phenomena. Readers hoping for investment advice are confronted with a philosophical mixture of Nietzsche and Stoicism. The wisdom on offer is more ­epistemological, moral, and aesthetic than financial.

Taleb’s most ambitious and intellectually sophisticated book is Antifragile: Things that Gain from Disorder (2012). The bibliography contains 568 items with hardly a field of thought unrepresented. By this point, Taleb has come to view all three works as composing a unified project, which he calls Incerto, about “decision making under uncertainty.” The central idea of Antifragile is that risk, volatility, or turbulence is in many cases not to be feared and avoided, but desired and sought. Taleb claims to have identified a new concept: Whereas fragile things are harmed by shocks, and robust things are resilient or unharmed, what is antifragile actually benefits from shocks. A related concept and characteristic Talebism: What is “Lindy” is likely to survive a long time because it has already survived a long time—named after a ­Manhattan restaurant where actors observed the phenomenon in ­Broadway runs.

Obviously a trader in volatile markets wants to find an antifragile investment strategy; but the concept is easily extended to biological and ecological health, technology, and culture. Stoic ethics is about being emotionally antifragile. Catholicism (along with Eastern Orthodoxy, ­Taleb’s faith) is Lindy and antifragile. Recognition of the naturalness and health of randomness in organic systems also makes for a critique of modernity: “Modernity corresponds to the systematic extraction of humans from their randomness-laden ecology.” Our social reorganization hasn’t actually protected us from randomness, but has made us fragile to new manifestations of randomness: “The story of the nation-state is that of the concentration and magnification of human errors.”

Antifragility helps explain ­Taleb’s willingness to expose himself to healthy stressors. He extolls fasting and deadlifting, and the challenges of ancient languages and Twitter combat. The notion also illuminates his distinctive “fractal” writing style (with short, iterative sections and recurring semi-fictional characters) and his willingness to provoke and offend. The Incerto set was rounded out by a deceptively slim book of aphorisms, The Bed of Procrustes: Philosophical and Practical Aphorisms (2010, 2015) on topics including writing, art, academia, economics, philosophy, technology, and life in general. The tone, pugilistic, paradoxical, and playful, is a mix of Sun Tzu, G. K. Chesterton, and Nietzsche.

Unpack a single aphorism: “Pharmaceutical companies are better at inventing diseases that match existing drugs, rather than inventing drugs to match existing diseases.” Suspicion of expertise, critique of large-scale corporations that exploit gullibility, dismissal of “science” that ignores human, organic health—­Taleb’s bullshit detection draws on what used to be called common sense. And his ideas have a way of shedding new light on the common sense of others. Consider this very Talebian aphorism from another champion of the organic over the mechanical, mad Kentucky farmer Wendell Berry: “I prefer butter to margarine because I trust cows more than chemists.” Modern “science” rarely contains as much wisdom as that encoded in enduring civilizational achievements. Butter is Lindy (but Taleb, the mad Levantine mathematician, prefers olive oil).

Taleb has made a personal crusade of exposing irresponsible and dishonest behavior; recent targets include Monsanto and Saudi Arabia. This is part of an increasingly public-minded Taleb, willing to put his reputation at risk. Appropriately, his Incerto trilogy has proven to be antifragile enough to admit of yet another addition, Taleb’s most overt work of moral theory yet: Skin in the Game: Hidden Asymmetries in Daily Life (2018). It is a book about virtue as a reflection of a law of symmetry: Think of the Golden Rule, and the manifest injustice of seeking profit while exposing others to risk. (Policymakers whose mistakes only impoverish others are Taleb’s paradigmatic bad actors.) The notion of “skin in the game” implies a critique of modern institutions—in government, art, academia, and science—designed to separate people, especially those with power, from the consequences of their actions and to insulate them from a responsibility to a wider public. Symmetry (what Boethius would have called proportionality) is a powerful idea, and Taleb uses it to address a variety of issues, from the virtues of entrepreneurship and the vices of rent-seeking to the significance of Hammurabi’s Code and the Christian doctrine of the Incarnation.

For Taleb, skin in the game is an expression of intellectual virtue. One isn’t actually thinking well if one doesn’t have some sense of accountability for the outcomes of one’s judgments. In this sense, “rationality” is morally responsible risk management. Skin in the game also has an intrinsic moral appeal and aesthetic value: Real virtue isn’t cheap. And it turns out skin in one’s own game is a moral minimum; more admirable is skin in other people’s games—­altruism, or what he calls “soul in the game”—which allows Taleb to embrace not only Stoic courage but Christian sacrifice.

Taleb displays familiarity with many expected theorists of epistemological humility: Montaigne and Hume, Hayek and Oakeshott, John Gray and Michael Polanyi. But as a theorist of practical reasoning and virtue—especially justice—Taleb is closest to a philosopher not cited in any of his books: Alasdair MacIntyre. If you have read the eighth chapter of After Virtue, “The Character of Generalizations in Social Science and their Lack of Predictive Power,” you will have already absorbed much of what Taleb teaches about the limits of expertise, the fallacies of social science, and the ineliminable unpredictability of human life. Taleb’s understanding of rationality as “the Intelligence of Time under skin in the game” sounds a lot like MacIntyre’s understanding of tradition as “socially embodied argument.” Allowing for the difference between Scottish melancholy and Mediterranean thumos, there is strong affinity between the two, and they may well be reading each other. In MacIntyre’s most recent book, Ethics in the Conflicts of Modernity, a discussion of distributism is ­preceded by a paragraph on four fundamental inadequacies of modern economic science: an overly optimistic view of risk, blindness to large-scale social disruption, incentive to favor short-term gain over long-term stability, and the moral hazard of externalizing risk. This could stand as a digest of Taleb’s Incerto.

Taleb’s postings on social media suggest that he is turning more directly to political theory, with special focus on the importance of scale. “Decentralization is based on the simple notion that it is easier to macro­bull***t than microbull***t.” Taleb has discovered distributism, or, more precisely, the principle of subsidiarity. A lover of freedom with a strong sense of honor and responsibility, Taleb resists ideology. Libertarians have been intrigued by his thought, but follow at a careful distance: His advocacy of localism reflects a classical prudence that can find a place for strategic protectionism and “tribalism,” “socialism” on the small scale, and, of course, the wisdom of traditional religion.

Theory and practice, epistemology and psychology, ethics and politics, economics and religion—in ­Boethian terms, Taleb has been patching back together ideas and disciplines separated from authentic philosophy. ­Boethius the Neoplatonist was mainly concerned with Epicureans and Stoics, while Taleb must take on the diversifying babel of modern academic disciplines. “Decision making under uncertainty” is actually a growing field of intellectual interest, developed mostly as a conversation between psychology and economics. The groundbreaking team of ­Daniel Kahneman, a psychologist, and Amos Tversky, an economist, is a signal instance. And perhaps because it developed outside of academic philosophy, behavioral economics has actually had an impact on the real world. Concepts like “framing,” “anchoring,” “heuristics,” and “­cognitive biases” have been more widely influential than most ideas from academic philosophers in the past fifty years.

More traditional-minded thinkers, with Lindy concepts of virtue and vice, are likely to ignore the contributions of cognitive psychology and behavioral economics as the trendy “expertise” of tenured social scientists. If one can call Sophocles’s Creon a tyrant and a fool, what is gained by saying he ­exemplifies the narrative fallacy, confirmation bias, and the Dunning-Krueger effect? Did we need psychologists to generate a list of cognitive biases, or could we have simply studied the fallacies and character flaws of Socrates’s interlocutors in Plato’s dialogues? Still, it is a sign of progress in the world of ideas that new work in various fields helps remind the separated disciplines that they are parts of a larger whole. ­Academic philosophers should welcome Taleb’s effort to integrate ­disparate disciplines.

Kahneman’s Thinking, Fast and Slow—the current Summa Epistemologica for this new movement—ends with a few pages addressing moral and political implications. Kahneman favors policy choices to direct social change through expertise (the “nudges” made popular by Cass Sunstein). Here Taleb parts ways. His instinct for personal responsibility, and his suspicion of expertise—especially centralized expertise not accountable for its own fallibility—makes him opt for Aristotelian phronesis instead of bureaucratic management. The purpose of thinking well isn’t to manipulate others with efficient managerial power, but to live in a challenging world with nobility, courage, generosity, and gratitude. Taleb doesn’t want to put psychology in the service of administrative policy; he wants to stitch it back together with a theory of intellectual and moral virtue, and a vision of the good life.

Does it count against this ­Boethian interpretation of Taleb’s project that he occasionally uses Plato and ­Aristotle as rationalistic, hubristic foils for his more empirical epistemology? Not necessarily. His criticisms of Plato and Aristotle—reflecting the unfortunately common prejudices of Popper and Bacon—are extrinsic to his larger project. And those criticisms are less frequent in his more recent writing. Taleb is an original philosopher, not a historian of ideas, and it would be as churlish to fixate on the errors in his interpretation of Aristotelian causality or Platonic political theory as to correct his occasional sloppiness in describing Christian doctrine. Taleb is bold and takes risks. Incidental errors should be recognized for what they are: inadvertent distractions that may be refined away with time.

Aristotle describes a farmer who, digging up his field, finds a treasure long buried there by someone else. Taleb seems only to have intended to use mathematics and psychology to expose bullshit in modern life, and it is a happy accident that he’s wound up rediscovering, sometimes without fully recognizing it, elements of the Catholic intellectual tradition. As ­Aristotle knew, “chance” events are still caused, even if only by a coincidence of causes. And under God’s providence, nothing is mere coincidence. With creativity, boldness, keen intelligence, and distinctive style, Taleb directs his readers to classical wisdom. Will that be his legacy? Who knows. But we can be grateful that he’s found an audience, and hope and trust that it is part of a larger plan. Saint Boethius, pray for us. 

Joshua P. Hochschild is Monsignor Robert R. Kline Professor of Philosophy at Mount St. Mary’s University.

Photo by Salzburg Global Seminar via Creative Commons. Image cropped.