2018 By Edge Foundation, Inc. Fill out the form, below, with your name and e-mail simplify english эссе and your subscription will be automatically processed. To arrive at the edge of the world’s knowledge, seek out the most complex and sophisticated minds, put them in a room together, and have them ask each other the questions they are asking themselves. The problem is much more complicated than it seems to the casual, mechanistic user who picked it up in graduate school.
In fact it is fooling your government right now. When Nassim Taleb talks about the limits of statistics, he becomes outraged. My outrage,» he says, «is aimed at the scientist-charlatan putting society at risk using statistical methods. This is similar to iatrogenics, the study of the doctor putting the patient at risk. As a researcher in probability, he has some credibility. The government-sponsored institution Fannie Mae, when I look at its risks, seems to be sitting on a barrel of dynamite, vulnerable to the slightest hiccup. But not to worry: their large staff of scientists deemed these events «unlikely.
In the following Edge original essay, Taleb continues his examination of Black Swans, the highly improbable and unpredictable events that have massive impact. He claims that those who are putting society at risk are «no true statisticians», merely people using statistics either without understanding them, or in a self-serving manner. The current subprime crisis did wonders to help me drill my point about the limits of statistically driven claims,» he says. But, as he points out, there is also good news. We can identify where the danger zone is located, which I call «the fourth quadrant», and show it on a map with more or less clear boundaries. A map is a useful thing because you know where you are safe and where your knowledge is questionable.
So I drew for the Edge readers a tableau showing the boundaries where statistics works well and where it is questionable or unreliable. NASSIM NICHOLAS TALEB, essayist and former mathematical trader, is Distinguished Professor of Risk Engineering at New York University’s Polytechnic Institute. But it was easy to see from the past that the pilot did not have the qualifications to fly the plane and was using the wrong navigation tools: The same happened in 1983 with money center banks losing cumulatively every penny ever made, and in 1991-1992 when the Savings and Loans industry became history. I want this to stop, and stop now— the current patching by the banking establishment worldwide is akin to using the same doctor to cure the patient when the doctor has a track record of systematically killing them. And this is not limited to banking—I generalize to an entire class of random variables that do not have the structure we thing they have, in which we can be suckers. And we are beyond suckers: not only, for socio-economic and other nonlinear, complicated variables, we are riding in a bus driven a blindfolded driver, but we refuse to acknowledge it in spite of the evidence, which to me is a pathological problem with academia. Long Term Capital Management, a hedge fund, because the «scientific» methods they used misestimated the role of the rare event, such methodologies and such claims on understanding risks of rare events should have been discredited.
Are we using models of uncertainty to produce certainties? This masquerade does not seem to come from statisticians—but from the commoditized, «me-too» users of the products. Professional statisticians can be remarkably introspective and self-critical. Recently, the American Statistical Association had a special panel session on the «black swan» concept at the annual Joint Statistical Meeting in Denver last August. For them it is a problem with statistical education and half-baked expertise.