From the World Question Center at Edge.com here’s Nassim Nicholas Taleb’s answer to the 2007 question: “What are you optimistic about?” His views on the future of America are particularly interesting. However, one cannot help to wonder if by making this prediction he’s ignoring his own advice and falling into the narrative fallacy. In other words, in an unpredictable world is optimism possible? Taleb says: “My optimism in these domains comes from both the continuous increase in the rate of trial and error and the increase in uncertainty and general unpredictability.”  But, according to his own arguments, both trends should be sensible to the impact of Black Swans, that is, of unpredictable rare events. If there’s an unexpected technological breakthrough that improves forecasting techniques (a Black Swan) and this makes the world less random and unpredictable his prediction would be wrong. A less random world would produce less Black Swans, and that would mean,  less advances and lucky accidents. So, considering this, the question is, is unpredictability itself Gaussian or Mandelbrotian? The answer can lead to an awkward paradox. To avoid it, one can only embrace optimism without trying to justify it scientifically, without falling into the narrative fallacy.

The Birth of Stochastic Science

by Nassim Nicholas Taleb

I have seen in Richard Dawkins' work many references to the difficulty people have, when looking at an animal, in accepting that it is not the product of a top-down design, but the result of a random process — more exactly the upper bound of a random process, in which (roughly, and only roughly) the most successful mutations tend to make it. Yet my problem is that when those who accept the evolutionary argument look at a computer, at a laser beam, at a successful drug, at a surgical technique, at the spread of a language, at the growth of a city, or at an commercial enterprise, they tend to fall for the belief that its discovery or establishment partook of some grand design. And, in hindsight, some "explanation" will be given as to why it happened: there was a plot — it could not have been an accident.

Alas, we are victims of the narrative fallacy — even in scientific research (but while we learned how to manage it in religion, and to some degree in finance, we do not seem to be aware of its prevalence in research). The pattern-seeking, causality producing machine in us blinds us with illusions of order in spite of our horrifying past forecast errors. I hold that not only discoveries are also largely the result of a random process, but that their randomness is even less tractable than, and not as simple as, biological evolution. While nature might produce milder form of stochasticity, the environment for manmade discoveries is governed by a far, far more severe, wilder form of processes, those called "fat tailed".

Against what one might expect, this makes me extremely optimistic about the future in several selective research-oriented domains, those in which there is an asymmetry in outcomes favoring the positive over the negative — like evolution. These domains thrive on randomness. The higher the uncertainty in such environments, the rosier the future — since we only select what works and discard the rest. With unplanned discoveries, you pick what's best; as with a financial option, you do not have any obligation to take what you do not like. Rigorous reasoning applies less to the planning than to the selection of what works. I also call these discoveries positive "Black Swans": you can't predict them but you know where they can come from and you know how they will affect you. My optimism in these domains comes from both the continuous increase in the rate of trial and error and the increase in uncertainty and general unpredictability.

I am convinced that the future of America is rosier than people claim — I've been hearing about its imminent decline ever since I started reading. Take the following puzzle. Whenever you hear or read a snotty European presenting his stereotypes about Americans, he will often describe them as "uncultured", "unintellectual" and "poor in math" because, unlike his peers, they are not into equation drills and the constructions middlebrows people call "high culture". Yet the person making these statements will be likely to be addicted to his Ipod, wearing t-shirts and blue jeans, and using Microsoft Word to jot down his "cultural" statements on his (Intel) PC, with some Google searches on the Internet here and there interrupting his composition. Well, it so happened that the U.S. is currently far, far more tinkering an environment than that of these nations of museum goers and equation solvers — in spite of the perceived weakness of the educational system, which  allows the bottom-up uncertainty-driven trial-and-error system to govern it, whether in technology or in business.

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