Category Archives: Contributors

Nassim Nicholas Taleb: He’s come back to scare us again | The Sunday Times

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More paywall teasers today. Perhaps NNT will publish a pdf to his site (which he often does).

For a thinker who reckons we all need a bit of randomness in life to make us stronger, Nassim Nicholas Taleb is surprisingly bothered that his usual table in his usual restaurant in Brooklyn is occupied.

Taleb’s obvious irritation does not seem a good start for an interview with a man who has little time for journalists, as he believes they misinterpret his work or “insert their own noise” in what he is trying to say.

He has already brushed off the Sunday Times photographer, telling him he doesn’t want to be photographed as “I am not a public intellectual”, and if he must then not with any New York backdrop or prop as “that would be fake, acting”, nor in his office at New York University as “that’s private”.

via Nassim Nicholas Taleb: He’s come back to scare us again | The Sunday Times.
HatTip to Dave Lull.

Learning to Love Volatility: Nassim Nicholas Taleb on the Antifragile – WSJ.com

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Rule 5: Decision makers must have skin in the game.

At no time in the history of humankind have more positions of power been assigned to people who don’t take personal risks. But the idea of incentive in capitalism demands some comparable form of disincentive. In the business world, the solution is simple: Bonuses that go to managers whose firms subsequently fail should be clawed back, and there should be additional financial penalties for those who hide risks under the rug. This has an excellent precedent in the practices of the ancients. The Romans forced engineers to sleep under a bridge once it was completed.

Because our current system is so complex, it lacks elementary clarity: No regulator will know more about the hidden risks of an enterprise than the engineer who can hide exposures to rare events and be unharmed by their consequences. This rule would have saved us from the banking crisis, when bankers who loaded their balance sheets with exposures to small probability events collected bonuses during the quiet years and then transferred the harm to the taxpayer, keeping their own compensation.

In these five rules, I have sketched out only a few of the more obvious policy conclusions that we might draw from a proper appreciation of antifragility. But the significance of antifragility runs deeper. It is not just a useful heuristic for socioeconomic matters but a crucial property of life in general. Things that are antifragile only grow and improve under adversity. This dynamic can be seen not just in economic life but in the evolution of all things, from cuisine, urbanization and legal systems to our own existence as a species on this planet.

via Learning to Love Volatility: Nassim Nicholas Taleb on the Antifragile – WSJ.com.
HatTip to Dave Lull

Randomness, probability and uncertainty: Stress best | The Economist

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Indeed, Mr Taleb thinks the big mistake is trying too hard to avoid shocks. Long periods of stability allow risks to accumulate until there is a major disaster; volatility means that things do not get too far out of kilter. In the economy cutting interest rates at the first sign of weakness stores up more trouble for later. In markets getting rid of speculators means prices are more stable in general but any fluctuations cause greater panic. In political systems the stability brought by regimes such as Hosni Mubarak’s in Egypt was artificial; without any effective way for people to express dissent, change leads to collapse.

The principle applies to career choices too. An apparently secure job within a large company disguises a dependency on a single employer and the risk that unemployment will cause a very sudden and steep loss of income. Professions that have more variable earnings, like taxi-driving or prostitution, are less vulnerable to really big shocks. They also use volatility as information: if a cabbie is in a part of town where there are no fares, he heads to a different area.

via Randomness, probability and uncertainty: Stress best | The Economist.
HatTip to Dave Lull!

Friends, I need help finding a PDF of AlKindi’s treatise

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Friends, I need help finding a PDF of AlKindi’s treatise on decoding frequencies في فك رسائل التشفير fi 3ilm rassa2l al tashfir; about probability theory, or I am ready to overpay for a hard copy of the Arabic text.

BACKGROUND: Every book written on the historyt of probability theory is bullsly based on some historian claiming that modern probability was “discovered” by Fermat, Pascal, etc., falling for the mential bias that the first account they could find in a language they could read is the first account that was made. And people cite each others and perpetuate the myth. For instance Bernstein’s against the Gods theorizes that Arabsfigured out algebra but not probability. But in fact it is well known that in the Levant, Omayad era ~800 years before Fermat, there were mathematical methods to decrypt messages based on word frequencies. It turns out that Al Kindi in one of his treatises discusses “3lm al-Musadafat” , “the science of probability” and numerical theories of frequencies. The problem is that modern Arabic translates probability by “i7timaliyat” not “musadafat”, which prevented people from connecting.So we need the book. I would love to translate the right segments of it. The original manuscript is in Istanbul which I assume should be digitalized.

via Friends, I need… | Facebook.