Book Review: Fooled by Randomness by Nassim Nicholas Taleb


Nassim Nicholas Taleb
Fooled by Randomness was described by Fortune magazine as “one of the smartest books of all time”. I have to agree with that and also make sure nobody questions me as to why I agree so, in fear of exposing myself as a fool. For this author has already predicted who I am and what I will be doing in the next few lines reviewing this book. He makes constant mockery of the journalist, the trader, the scientist and the MBA guy and notes that such people are the largest group of people who have read his book and also appreciated it probably because they assumed it was a lesson in intelligence for the other person. He also mentions how people who review this book are only a reflection of their personality and are not providing any intellectual fodder that the author needs to consider as criticism or feedback. 

Well, what else can be said? I already know that the author considers me a fool and also will never read these reviews (not that I’m qualified enough to expect him to read it in the first place!) as is only a reflection of my personality. So, what I will do is just author a book review for my own personal satisfaction of having read a brilliant work on a subject as abstract as “randomness”. 

To start with, this was by far the toughest book I read and tried to understand, often forcing me to re-read chapters or paragraphs I already read a few days before. All again, this is no surprise, as the reason for that was also explained by the author. Unfortunately for me, I belong to a larger sample size of people who were not born to understand the concept of probability and hence may 
never will (I will not assume a percentage value of this sample size here lest I expose my lack of statistical depth).

The author, Nassim Nicholas Taleb, has definitely become a favorite of mine. A person I intend to follow closely (his work of course) to get some reprieve from the innumerable “success story” books, meaningless biographies of business tycoons and self-help literature that constantly seem to remind me of something missing in my portfolio while the other person has it because he or she is more assertive, a go-getter, a high profile communicator and endowed with other glib characteristics. The author however warns that this book is not escapism from hard work or an excuse for doing nothing or achieving less. 

The dynamics of randomness are such that more or less, that turns out to be the reason someone is firing away in life while the other is fired at work. Mr. Taleb calls these people who re-create their success stories after the fact by attributing it to a certain special skill as the “lucky fool”, where luck is defined as the random event that creates an avenue so successful in the present but yet unseen before. The author’s focus throughout the book is also on his favorite subject –
probability, with several references to Keynes “Treatise on Probability” as one of the best contributions of the economist.

When I read my History books and the 19th century work of so called intellectual authorities called “European savant” historians who literally recreated India’s past, took away its present and permanently dented its future, I couldn’t find a way to explain why these historians cannot and should not be treated as authorities on the subject just because of their race or their rational way of evaluating history (Max Muller et. al). This book and the author helped me in finding the answer I was looking for. The cloud of ignorance that these savants suffered from is called “historical determinism”. To quote the author in his own words – “When you look at the past, the past will always be deterministic, since only one single observation took place. Our mind will interpret most events not with the preceding ones in mind, but the following ones….Psychologists call this overestimation of what one knew at the time of the event due to subsequent information the hindsight bias, the “I knew it all along” effect”.

The author’s commentary on yet another arrogance propagated around the World by correlating “developed nation” with “material progress” is also interesting. He explains that “Mathematically, progress means that some new information is better than past information, not that the average of new information will supplant past information”. He then brings out the general argument dished out by the fans of the new things in life by showing the changes brought by the arrival of new technologies such as the airplane, autombile, telephone etc. Calling it as middlebrown inference (inference stripped of probabilistic thinking), he says such thinking can lead to people believe that all new technologies and inventions would revolutionize our lives. Banking on the concept of survivorship bias, he indicates that we are only looking at the winners at the cost of the several losers we have ignored. He quotes, “the opportunity cost of missing a new thing like the airplane or automobile is minuscule compared to the toxicity of all the garbage one has to go through to get to these jewels”. Likewise, he also talks about how randomness can be ingested into evolution to explain unexplainable results and also highlights the true significance of the Darwinian theory of self selection – it is after all about reproductive fitness and not about survival fitness.

The author also has some good commentary on his big influence in life, Karl Popper, a falsificationist. He goes to explain Popper’s lack of confidence in taking Science seriously and looking at justification or verification as the means to proving things as scientific. Mr. Taleb finally concludes with the concept of heuristics and how our brain is set up to use emotions for thinking, thereby forcing us to be less rational in our decision making and actions. While one can study randomness and theorize the need for handling it, our evolution and mental make up prevent us from identifying it.To end it, while admitting that like others, he also is a fool driven by emotions that drive action, he remarks that the difference lies in the fact that he realizes and accepts it rather than adamantly denying that we can be fooled by randomness.
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