Research and theories of randomness

Taleb calls himself a "skeptical empiricist", but,

1. unlike other skeptics, his skepticism is only directed to the fundamental incomputability of the probability of consequential rare events from empirical observations ("Black Swans") though he accepts that scientific knowledge can deal with the regular ones --Taleb advocates gullibility for things that make us human without adverse consequences, matters in "Mediocristan" ^[16],
2. Taleb's empiricism means the opposite of what is usually interpreted; it implies resisting generalization from data and limiting the derivation of general rules from particular observations as one can be missing hidden properties. Thus he believes that scientists, economists, historians, policymakers, businessmen, and financiers are victims of an illusion of pattern; they overestimate the value of rational explanations of past data, and underestimate the prevalence of unexplainable randomness in those data.

Taleb put a psychological, mathematical, and (mostly) practical framework around the philosophical problems in a long lineage of skeptical philosophers, including Socrates, Sextus Empiricus, Al-Ghazali, Pierre Bayle, Montaigne, David Hume and Karl Popper in believing that we know much less than we think we do, and that the past should not be used naively to predict the future. Furthermore, as a practitioner he creates a decision-making framework of "how to act under incomplete understanding, imperfect information". Taleb now focuses on being a researcher in the philosophy of randomness and the role of uncertainty in science and society,^[17] with particular emphasis on the philosophy of history and the role of fortunate or unfortunate high-impact random events, which he calls "black swans", in determining the course of history.

Taleb believes that most people ignore "black swans" because we are more comfortable seeing the world as something structured, ordinary, and comprehensible. Taleb calls this blindness the Platonic fallacy, and argues that it leads to three distortions:

1. Narrative fallacy: creating a story post-hoc so that an event will seem to have an identifiable cause.
2. Ludic fallacy: believing that the unstructured randomness found in life resembles the structured randomness found in games. Taleb faults random walk models and other inspirations of modern probability theory for this inadequacy.
3. Statistical regress fallacy: believing that the structure of probability can be delivered from a set of data.

He also believes that people are subject to the triplet of opacity, through which history is distilled even as current events are incomprehensible. The triplet of opacity consists of

1. an illusion of understanding of current events
2. a retrospective distortion of historical events
3. an overestimation of factual information, combined with an overvalue of the intellectual elite^[18]

Taleb, an anti-Platonist, believes that universities are better at public relations and claiming credit than generating knowledge. Knowledge and technology are generated by what he calls "stochastic tinkering", rarely by top-down directed research. [4] [5] paragraphs 32 & 33 & 54

Taleb stands against grand theories in social science. He supports experiments and fact collecting, but opposes the idea of directing our thinking into general Platonic theories that are not supported by hard data. His work is supported both by qualitative argument and by rigorous technical and quantitative analysis. [6]

Consistent with his anti-Platonism, Taleb doesn't like to see his ideas called "theories". As he stands against general theories and top-down concepts, he never mentions theory in conjunction with the Black Swan. The phrase "Black Swan theory" is, to him, a contradiction in terms, and he urges his readers not to "Platonify" the Black Swan. Rather, Taleb would call his Black-Swan idea an "anti-theory" or the "Black Swan conjecture".

He opposes the academic aura around economic theories, which in his view suffer acutely from the problem of Platonicity. In an article titled "The pseudo-science hurting markets", Taleb called for the cancellation of the Nobel Memorial Prize in Economics, saying that the damage from economic theories can be devastating.

Ludic fallacy

Taleb's exposition of the Ludic fallacy in The Black Swan

We love the tangible, the confirmation, the palpable, the real, the visible, the concrete, the known, the seen, the vivid, the visual, the social, the embedded, the emotional laden, the salient, the stereotypical, the moving, the theatrical, the romanced, the cosmetic, the official, the scholarly-sounding verbiage (b******t), the pompous Gaussian economist, the mathematicized crap, the pomp, the Academie Francaise, Harvard Business School, the Nobel Prize, dark business suits with white shirts and Ferragamo ties, the moving discourse, and the lurid. Most of all we favor the narrated.

Alas, we are not manufactured, in our current edition of the human race, to understand abstract matters — we need context. Randomness and uncertainty are abstractions. We respect what has happened, ignoring what could have happened. In other words, we are naturally shallow and superficial — and we do not know it. This is not a psychological problem; it comes from the main property of information. The dark side of the moon is harder to see; beaming light on it costs energy. In the same way, beaming light on the unseen is costly in both computational and mental effort.