This whole thing started when I picked up a pink hardbound second-hand copy of The Black Swan by Nassim Nicholas Taleb at the famous Blossoms Book House in Church Street, Bangalore. He minces no words when pouring scorn on the financial sector and the “pseudo-science” that he claims they use to certify risky decisions that are motivated by short-term bonuses. I get that. I think I will change my investment strategies as a result! He summarizes, very well, the impact of events that were unforeseen and helps you with ideas on how to benefit from them while not getting steamrolled. This is a remarkably prescient book that foreshadowed the financial crisis and events such as the Arab Spring even though his philosophy eschews prediction and favours robustness in planning and preparedness in the face of such adversity. A friend of mine who read this book was put off by the amount of mud thrown on to academicians. But I feel that researchers need criticism to constantly improve research methodologies and words need not be minced as long as personal attacks are not made. The process by which research is published today leaves much to be desired and more on this later.
One little thing I liked was the fact that the book started with an Umberto Eco reference where he talks about Eco’s large library, the majority of whose books were unread. Umberto Eco is an old favourite of mine and I have read several of his fiction and non-fiction books. Taleb calls him encyclopaedic and this is visible in every chapter of any of Eco’s books. The reference to Eco made me feel good about all the books I keep buying and don’t end up reading immediately (Fooled by Randomness by Taleb is sitting unread in my bookshelf!). Taleb’s point is that one has a library not to fill it with more and more books as a matter of vanity but rather as a research tool. Having as much content as possible about what you don’t know is great for research and to keep you grounded! So it’s OK if you haven’t read every chapter of every book that you own. Taleb calls this great mountain of unread books the anti-library – a cool term in my opinion.
Reading this book led to several other books that I read thereafter. Thinking, Fast and Slow by Daniel Kahneman, (and the shadow of the posthumous influence of his research partner, Amos Tversky) summarizes a few lifetimes worth of quality research into how people think and how they make decisions. How does our mind think about stuff and store or retrieve memories? How do we arrive at judgements and biases? How do we learn skills and can do some things almost subconsciously (intuition)? How do we make decisions in the face of the choices we have in real life? The difficult questions, an insane amount of experimentation, great anecdotes and good quality writing about the findings will undoubtedly leave an impact on the reader. The book explains the different cognitive systems we use and how we train them. It delves into decision making and how the human mind processes risk. The main link in terms of ideas between these 2 books is that humans don’t deal with randomness, uncertainty and risk very well. Even if those humans are statisticians and trained experts! The other important link is empiricism, which in this context (human behavior, economics etc.) means learn from experimentation and observation rather than established notions or theories. Taleb stresses that empiricism and healthy skepticism are vital for humans in this technology-driven world. Kahneman’s significant body of research uses this principle at every step. I would highly recommend this book. In terms of tone, it is exactly the opposite of Taleb’s! Reverential when talking about good research and politely criticizing the bad.
Taleb refers a lot to Karl Popper who I learned was a very important philosopher of science. I bought some of his masterpieces and they are currently in my anti-library! The writing is all pre-World War II and I am finding it difficult to switch from the more accessible language of the modern books I’ve been reading lately.
My friend (the one who wasn’t so thrilled with Taleb) then pointed me to How Not To Be Wrong by Jordan Ellenberg. Ellenberg was a child prodigy and is an accomplished mathematician. While I cannot judge his research, his ability to teach is amazing and you can experience that throughout this great book. I never realized until I read this book that concepts like non-linearity, regression, correlation, probability, hypothesis testing and randomness could be taught so intuitively and used so powerfully. The concepts that link this to Taleb’s writing is Ellenberg’s critique on how these concepts are misused in when publishing academic research and the lack of importance given to simple things like sample size and repeating an experiment to verify original research. Taleb pours scorn into the gaping holes of academic research and Ellenberg suggests how to cement these voids. That is the difference. Kahneman shows how the typical process of “thinking and deciding” works and Ellenberg shows how you can use math to get better at it. Ellenberg is engaging and funny. He has done a humungous amount of reading and research into how mathematicians codified these concepts and he picks out some absolute gems. There was one anecdote in the section on regression where Hotelling delivers a “statistical smackdown” on the pointlessness of a gigantic research undertaking by Secrist to demonstrate what Hotelling called an “obvious mathematical fact”. This made me laugh for the better part of an hour and I did not expect that from a book written by a mathematician about how math should be used. May be the lack of expectation increased the pleasure (utils as Ellenberg might call it) I felt!
The differences in tone and writing style almost stereotypically correlate with age as I noted that Kahneman is in his 80s, Taleb in his 50s and Ellenberg in the 40s. Taleb’s time spent in hostile environments like the Lebanese civil war or Wall Street probably explains why he is so easily outraged when he thinks he sees incompetence.
I tend to read a series of books on any given topic right from school days. There was a Frederick Forsyth phase, a Robert Ludlum phase, a William Dalrymple phase which led into other engaging travel and history books by Robert Byron, Paul Theroux, Charles Allen, Pico Iyer and the like, a scientific phase with Jared Diamond, Richard Dawkins, Simon Singh, Siddharta Mukherjee, V.S. Ramachandran and others. They have all been rewarding in their own way and this one – the Thinking and Deciding phase – is now up there with some of the most fulfilling series of reading I’ve done.