Nassim Taleb and the Guardian

Monday, April 17th, 2017

Nassim Nicholas Taleb hates bankers, academics, and journalists, but he was willing to sit down with Carole Cadwalladr of The Guardian:

And yet here he is, chatting away, surprisingly friendly and approachable. When I say as much as we walk to the restaurant, he asks, “What do you mean?”

“In your book, you’re quite…” and I struggle to find the right word, “grumpy”.

He shrugs. “When you write, you don’t have the social constraints of having people in front of you, so you talk about abstract matters.”

Social constraints, it turns out, have their uses. And he’s an excellent host. We go to his regular restaurant, a no-nonsense, Italian-run, canteen-like place, a few yards from his faculty in central Brooklyn, and he insists that I order a glass of wine.

“And what’ll you have?” asks the waitress.

“I’ll take a coffee,” he says.

“What?” I say. “No way! You can’t trick me into ordering a glass of wine and then have coffee.” It’s like flunking lesson #101 at interviewing school, though in the end he relents and has not one but two glasses and a plate of “pasta without pasta” (though strictly speaking you could call it “mixed vegetables and chicken”), and attacks the bread basket “because it doesn’t have any calories here in Brooklyn”.

Inequality and Skin in the Game

Thursday, December 29th, 2016

There’s inequality, Nassim Nicholas Taleb notes, and then there’s inequality:

The first is the inequality people tolerate, such as one’s understanding compared to that of people deemed heroes, say Einstein, Michelangelo, or the recluse mathematician Grisha Perelman, in comparison to whom one has no difficulty acknowledging a large surplus. This applies to entrepreneurs, artists, soldiers, heroes, the singer Bob Dylan, Socrates, the current local celebrity chef, some Roman Emperor of good repute, say Marcus Aurelius; in short those for whom one can naturally be a “fan”. You may like to imitate them, you may aspire to be like them; but you don’t resent them.

The second is the inequality people find intolerable because the subject appears to be just a person like you, except that he has been playing the system, and getting himself into rent seeking, acquiring privileges that are not warranted — and although he has something you would not mind having (which may include his Russian girlfriend), he is exactly the type of whom you cannot possibly become a fan. The latter category includes bankers, bureaucrats who get rich, former senators shilling for the evil firm Monsanto, clean-shaven chief executives who wear ties, and talking heads on television making outsized bonuses. You don’t just envy them; you take umbrage at their fame, and the sight of their expensive or even semi-expensive car trigger some feeling of bitterness. They make you feel smaller.

There may be something dissonant in the spectacle of a rich slave.

The author Joan Williams, in an insightful article, explains that the working class is impressed by the rich, as role models. Michèle Lamont, the author of The Dignity of Working Men, whom she cites, did a systematic interview of blue collar Americans and found present a resentment of professionals but, unexpectedly, not of the rich.

It is safe to accept that the American public — actually all public — despise people who make a lot of money on a salary, or, rather, salarymen who make a lot of money. This is indeed generalized to other countries: a few years ago the Swiss, of all people almost voted a law capping salaries of managers. But the same Swiss hold rich entrepreneurs, and people who have derived their celebrity by other means, in some respect.

Further, in countries where wealth comes from rent seeking, political patronage, or what is called regulatory capture (by which the powerful uses regulation to scam the public, or red tape to slow down competition), wealth is seen as zero-sum. What Peter gets is extracted from Paul. Someone getting rich is doing so at other people’s expense. In countries such as the U.S. where wealth can come from destruction, people can easily see that someone getting rich is not taking dollars from your pocket; perhaps even putting some in yours. On the other hand, inequality, by definition, is zero sum.

In this chapter I will propose that effectively what people resent — or should resent — is the person at the top who has no skin in the game, that is, because he doesn’t bear his allotted risk, is immune to the possibility of falling from his pedestal, exiting the income or wealth bracket, and getting to the soup kitchen. Again, on that account, the detractors of Donald Trump, when he was a candidate, failed to realize that, by advertising his episode of bankruptcy and his personal losses of close to a billion dollars, they removed the resentment (the second type of inequality) one may have towards him. There is something respectable in losing a billion dollars, provided it is your own money.

In addition, someone without skin in the game — say a corporate executive with upside and no financial downside (the type to speak clearly in meetings) — is paid according to some metrics that do not necessarily reflect the health of the company; these (as we saw in Chapter x) he can manipulate, hide risks, get the bonus, then retire (or go to another company) and blame his successor for the subsequent results.

The Most Intolerant Wins

Wednesday, August 31st, 2016

Nassim Nicholas Taleb explains how a certain type of intransigent minority can make the entire population adopt their preferences — while a naive observer would be under the impression that the choices and preferences are those of the majority:

This example of complexity hit me, ironically, as I was attending the New England Complex Systems institute summer barbecue. As the hosts were setting up the table and unpacking the drinks, a friend who was observant and only ate Kosher dropped by to say hello. I offered him a glass of that type of yellow sugared water with citric acid people sometimes call lemonade, almost certain that he would reject it owing to his dietary laws. He didn’t. He drank the liquid called lemonade, and another Kosher person commented: “liquids around here are Kosher”. We looked at the carton container. There was a fine print: a tiny symbol, a U inside a circle, indicating that it was Kosher. The symbol will be detected by those who need to know and look for the minuscule print. As to others, like myself, I had been speaking prose all these years without knowing, drinking Kosher liquids without knowing they were Kosher liquids.

A strange idea hit me. The Kosher population represents less than three tenth of a percent of the residents of the United States. Yet, it appears that almost all drinks are Kosher. Why? Simply because going full Kosher allows the producer, grocer, restaurant, to not have to distinguish between Kosher and nonkosher for liquids, with special markers, separate aisles, separate inventories, different stocking sub-facilities. And the simple rule that changes the total is as follows:

A Kosher (or halal) eater will never eat nonkosher (or nonhalal) food , but a nonkosher eater isn’t banned from eating kosher.

Let us call such minority an intransigent group, and the majority a flexible one. And the rule is an asymmetry in choices.

I once pulled a prank on a friend. Years ago when Big Tobacco were hiding and repressing the evidence of harm from secondary smoking, New York had smoking and nonsmoking sections in restaurants (even airplanes had, absurdly, a smoking section). I once went to lunch with a friend visiting from Europe: the restaurant only had availability in the smoking sections. I convinced the friend that we needed to buy cigarettes as we had to smoke in the smoking section. He complied.

Two more things. First, the geography of the terrain, that is, the spatial structure, matters a bit; it makes a big difference whether the intransigents are in their own district or are mixed with the rest of the population. If the people following the minority rule lived in Ghettos, with their separate small economy, then the minority rule would not apply. But, when a population has an even spatial distribution, say the ratio of such a minority in a neighborhood is the same as that in the village, that in the village is the same as in the county, that in the county is the same as that in state, and that in the sate is the same as nationwide, then the (flexible) majority will have to submit to the minority rule. Second, the cost structure matters quite a bit. It happens in our first example that making lemonade compliant with Kosher laws doesn’t change the price by much, not enough to justify inventories. But if the manufacturing of Kosher lemonade cost substantially more, then the rule will be weakened in some nonlinear proportion to the difference in costs. If it cost ten times as much to make Kosher food, then the minority rule will not apply, except perhaps in some very rich neighborhoods.

What we are seeing worldwide

Monday, May 9th, 2016

Nassim Nicholas Taleb describes what we are seeing worldwide:

What we are seeing worldwide, from India to the UK to the US, is the rebellion against the inner circle of no-skin-in-the-game policymaking “clerks” and journalists-insiders, that class of paternalistic semi-intellectual experts with some Ivy league, Oxford-Cambridge, or similar label-driven education who are telling the rest of us 1) what to do, 2) what to eat, 3) how to speak, 4) how to think… and 5) who to vote for.

With psychology papers replicating less than 40%, dietary advice reversing after 30y of fatphobia, macroeconomic analysis working worse than astrology, microeconomic papers wrong 40% of the time, the appointment of Bernanke who was less than clueless of the risks, and pharmaceutical trials replicating only 1/5th of the time, people are perfectly entitled to rely on their own ancestral instinct and listen to their grandmothers with a better track record than these policymaking goons.

Protective, Fearful Parenting

Friday, February 19th, 2016

Jonathan Haidt describes what really worries him about college kids today:

The big thing that really worries me — the reason why I think things are going to get much, much worse — is that one of the causal factors here is the change in child-rearing that happened in America in the 1980s. With the rise in crime, amplified by the rise of cable TV, we saw much more protective, fearful parenting. Children since the 1980s have been raised very differently — protected as fragile. The key psychological idea, which should be mentioned in everything written about this, is Nassim Taleb’s concept of anti-fragility.

[...]

Bone is anti-fragile. If you treat it gently, it will get brittle and break. Bone actually needs to get banged around to toughen up. And so do children. I’m not saying they need to be spanked or beaten, but they need to have a lot of unsupervised time, to get in over their heads and get themselves out. And that greatly decreased in the 1980s. Anxiety, fragility and psychological weakness have skyrocketed in the last 15–20 years. So, I think millennials come to college with much thinner skins. And therefore, until that changes, I think we’re going to keep seeing these demands to never hear anything offensive.

What Book has the Most Page-for-Page Wisdom?

Thursday, July 16th, 2015

Shane Parrish (@farnamstreet) asked his Twitter followers, “What is page for page the book with the most wisdom you’ve ever read?”.

Tyler Cowen was not impressed with the resulting list, so he rattled off his own:

Cowen’s commenters love Pinker and both love and hate N.N. Taleb.

Retire Standard Deviation

Wednesday, January 22nd, 2014

“The statistician cannot evade the responsibility for understanding the process he applies or recommends,” Sir Ronald A. Fisher said, so it is time to retire standard deviation from common use and replace it with mean deviation, Nassim Nicholas Taleb suggests:

Standard deviation, STD, should be left to mathematicians, physicists and mathematical statisticians deriving limit theorems. There is no scientific reason to use it in statistical investigations in the age of the computer, as it does more harm than good — particularly with the growing class of people in social science mechanistically applying statistical tools to scientific problems.

Say someone just asked you to measure the “average daily variations” for the temperature of your town (or for the stock price of a company, or the blood pressure of your uncle) over the past five days. The five changes are: (–23, 7, –3, 20, –1). How do you do it?

Do you take every observation: square it, average the total, then take the square root? Or do you remove the sign and calculate the average? For there are serious differences between the two methods. The first produces an average of 10.8, the second 15.7. The first is technically called the root mean square deviation. The second is the mean absolute deviation, MAD. It corresponds to “real life” much better than the first — and to reality. In fact, whenever people make decisions after being supplied with the standard deviation number, they act as if it were the expected mean deviation.

It is all due to a historical accident: in 1893, the great Karl Pearson introduced the term “standard deviation” for what had been known as “root mean square error”. The confusion started then: people thought it meant mean deviation. The idea stuck: every time a newspaper has attempted to clarify the concept of market “volatility”, it defined it verbally as mean deviation yet produced the numerical measure of the (higher) standard deviation.

But it is not just journalists who fall for the mistake: I recall seeing official documents from the department of commerce and the Federal Reserve partaking of the conflation, even regulators in statements on market volatility. What is worse, Goldstein and I found that a high number of data scientists (many with PhDs) also get confused in real life.

34 Insights From Nassim Taleb

Monday, September 2nd, 2013

Shane Parrish shares 34 insights from Nassim Taleb:

  1. The artificial gives us hangovers, the natural inverse-hangovers.
  2. The only problem with the last laugh is that the winner has to laugh alone.
  3. Intelligence without imagination: a deadly combination.
  4. There is no more unmistakable sign of failure than that of a middle-aged man boasting of his successes in college.
  5. Never trust a journalist unless she’s your mother.
  6. One of life’s machinations is to make some people both rich and unhappy, that is, jointly fragile and deprived of hope.
  7. [If] someone is making an effort to ignore you he is not ignoring you.
  8. The danger of reading financial & other news (or econobullshit) is that things that don’t make sense at all start making sense to you after progressive immersion.
  9. It’s a sign of weakness to worry about showing signs of weakness.
  10. Friends, I wonder if someone has computed how much would be saved if we shut down economics and political science departments in universities. Those who need to research these subjects can do so on their private time.
  11. I trust those who trust me and distrust those who are suspicious of others.
  12. A good man is warm and respectful towards the waiter or people of lower rank.
  13. Journalists feel contempt for those who fear them and a deep resentment for those who don’t.
  14. When someone starts a sentence with the first half containing “I”, “not”, and “but”, the “not” should be removed and the “but” replaced with “therefore.”
  15. High Modernity: routine in place of physical effort, physical effort in place of mental expenditure, & mental expenditure in place of mental clarity.
  16. The only valid political system is one that can handle an imbecile in power without suffering from it.
  17. Journalists cannot grasp that what is interesting is not necessarily important; most cannot even grasp that what is sensational is not necessarily interesting.
  18. Never buy a product that the owner of the company that makes it doesn’t use, or, in the case of, say, medication, wouldn’t contingently use.
  19. Just realized that to politely get rid of someone people in Brooklyn say “call me if you need anything.”
  20. Injuries done to us by others tend to be acute; the self-inflicted ones tend to be chronic.
  21. We often benefit from harm done to us by others; almost never from self-inflicted injuries.
  22. You will never know if someone is an asshole until he becomes rich.
  23. When someone writes “I dislike you but I agree with you”, I read “I dislike you because I agree with you.”
  24. A great book eludes summaries. A great aphorism resists expansion. The rest is just communication.
  25. For a free person, the optimal – most opportunistic – route between two points should never be the shortest one.
  26. What counts is not *what* people say, it is *how much* energy they spend saying it.
  27. Used skillfully, a compliment will be much more offensive than any disparagement.
  28. I trust those who are greedy for money a thousand time more than those who are greedy for credentials.
  29. Just as eating cow-meat doesn’t turn you into a cow, studying philosophy doesn’t make you wiser.
  30. It is a great compliment for an honest person to be mistaken for a crook by a crook.
  31. Many want to learn how to memorize things; few seek that rare ability to forget.
  32. If you have something very important to say, whisper it.
  33. The ultimate freedom lies in not having to explain “why” you did something.
  34. A book that can be summarized should not be written as a book.

How Debt Ruins Systems

Wednesday, April 3rd, 2013

Taleb explains how debt ruins systems — in contrast to other, more flexible forms of financing:

You’re going to Aleppo, Syria, and Florence and you’re going to send me some silk. You trust me, and my correspondent in Aleppo would pay you the minute I get my silk — that kind of transaction. That’s called letter of credit, where you have debt conditional on some commercial transaction being completed. And it also allows people to finance some inventory, provided the buyer is a committed buyer. That kind of facilitation of commerce is how it all started — the letter of credit — and it developed very well.

Before that we had debt in society and it led to blowups in Babylon, and then they had to have debt jubilees. Then of course the Hebrews also had debt jubilees. And of course, they say neither a borrower nor a lender be. The Romans didn’t like debt. The Greeks didn’t like debt, except for a few intellectuals. Intellectuals for some reason, like Mr. Krugman, like debt.

Later on debt came back to Europe with the Reformation and it was mostly to finance wars. The industrial revolution was not financed by debt. California was not financed by debt; it was financed by equity. So debt is not necessary. You can use it for emergencies. Catholic societies — Aquinas was against debt and his statements were stronger than the Islamic fatwa against debt.

We have learned through history that debt in the form of leverage can blow things up. Debt fragilizes. Now what we have had in this economy is a growth of debt mostly financed indirectly by governments. Because if you blow up, we’re going to be behind you.

The Lindy effect

Saturday, March 23rd, 2013

The Lindy effect sounds like a short-lived fad from the 1930s, when really it describes such fads — or, rather, their lifetimes:

The longer a technology has been around, the longer it’s likely to stay around. This is a consequence of the Lindy effect. Nassim Taleb describes this effect in Antifragile but doesn’t provide much mathematical detail. Here I’ll fill in some detail.

Taleb, following Mandelbrot, says that the lifetimes of intellectual artifacts follow a power law distribution. So assume the survival time of a particular technology is a random variable X with a Pareto distribution. That is, X has a probability density of the form

f(t) = c/tc+1

for t ? 1 and for some c > 0. This is called a power law because the density is proportional to a power of t.

If c > 1, the expected value of X exists and equals c/(c-1). The conditional expectation of X given that X has survived for at least time k is ck/(c-1). This says that the expected additional life X is ck/(c-1) – k = k/(c-1), and so the expected additional life of X is proportional to the amount of life seen so far. The proportionality constant 1/(c-1) depends on the power c that controls the thickness of the tails. The closer c is to 1, the longer the tail and the larger the proportionality constant. If c = 2, the proportionality constant is 1. That is, the expected additional life equals the life seen so far.

Note that this derivation computed E( X | X > k ), i.e. it only conditions on knowing that X > k. If you have additional information, such as evidence that a technology is in decline, then you need to condition on that information. But if all you know is that a technology has survived a certain amount of time, you can estimate that it will survive about that much longer.

This says that technologies have different survival patterns than people or atoms. The older a person is, the fewer expected years he has left. That is because human lifetimes follow thin-tailed distributions. Atomic decay follows a medium-tailed exponential distribution. The expected additional time to decay is independent of how long an atom has been around. But for technologies follow a thick-tailed distribution.

Another way to look at this is to say that human survival times have an increasing hazard function and atoms have a constant hazard function. The hazard function for a Pareto distribution is c/t and so decreases with time.

The effect applies to many creative artifacts:

The previous post looked at technologies, but the Lindy effect would apply, for example, to books, music, or movies. This suggests the future will be something like a mirror of the present. People have listened to Beethoven for two centuries, the Beatles for about four decades, and Beyoncé for about a decade. So we might expect Beyoncé to fade into obscurity a decade from now, the Beatles four decades from now, and Beethoven a couple centuries from now.

This is in contrast to things that break down:

If you look at a 25 year-old car and a 3 year-old car, you expect the latter to be around longer. The same is true for a 25 year-old accountant and a 3 year-old toddler.

Ask Nassim Taleb Anything

Thursday, March 21st, 2013

I haven’t followed reddit in years, but Nassim Taleb is doing an ask me anything thread over there right now:

  • Rule: any company that would cause a national emergency requiring a bailout should it fail should be classified BAILABLE-OUT and employees should not be allowed to earn more than civil servants. That would force companies to 1) be small, 2) not leech off the taxpayer.
  • I share many things with Ayn Rand. But not selfishness. Rather to me honor to take risks and account for your action is the rule.
  • [Dawkins] doesn’t understand what belief means, and talks religion confusing pisteic (credere) and epistemic. Belief in religion is epiphenomenal. Religion is about practice. The real reason is that he doesn’t of course understand probability.
  • Antifragility is simply a local response. Complexity Science is about systems. My approach is less theoretical (more robust), but if I were to ascribe to a theory, I would subscribe to Complexity theory.
  • I came to realize that FU money was a state of mind. Many rich people never have it. A train conductor/intellectual I know had it.
  • I will be honest. I often discover books because people tell me that I am similar to the writer, and later start imagining that they were an influence. It looks like a backward process.
  • The general problem is that we are not made to control our environment, and we are designed for a degree of variability: in energy, temperature, food composition, sleep duration, exercise (by Jensen’s inequality). Depriving anyone of variations is silly. So we need to force periods of starvation or fasts, sleep deprivation, protein deprivation, etc. Religions force shabbats, fasts, etc. but we are no longer under the sway of religions. The solution is rules.

A commenter shared this systems theory translation by John Michael Greer of a passage from the Tao Te Ching:

A process as described is not the process as it exists;
The terms used to describe it are not the things they describe.
That which evades description is the wholeness of the system;
The act of description is merely a listing of its parts.
Without intentionality, you can experience the whole system;
With intentionality, you can comprehend its effects.
These two approach the same reality in different ways,
And the result appears confusing;
But accepting the apparent confusion
Gives access to the whole system.

The Long Peace

Tuesday, February 19th, 2013

During the so-called Great Moderation, markets moved toward fewer but deeper departures from the mean, Nassim Nicholas Taleb says.

Great Moderation

Now, to Taleb’s horror, Steven Pinker sees an analogous Long Peace:

The fact that nuclear bombs explode less often that regular shells does not make them safer.

Pinker conflates nonscalable Mediocristan (death from encounters with simple weapons) with scalable Extremistan (death from heavy shells and nuclear weapons). The two have markedly distinct statistical properties. Yet he uses statistics of one to make inferences about the other. And the book does not realize the core difference between scalable/nonscalable (although he tried to define powerlaws). He claims that crime has dropped, which does not mean anything concerning casualties from violent conflict.

Another way to see the conflation, Pinker works with a times series process without dealing with the notion of temporal homogeneity. Ancestral man had no nuclear weapons, so it is downright foolish to assume the statistics of conflicts in the 14th century can apply to the 21st. A mean person with a stick is categorically different from a mean person with a nuclear weapon, so the emphasis should be on the weapon and not exclusively on the psychological makup of the person.

Had a book proclaiming The Long Peace been published in 1913 it would carry similar arguments to those in Pinker’s book.

Learning to Love Volatility

Wednesday, November 21st, 2012

Nassim Nicholas Taleb shares his five rules for anti-fragility:

  1. Think of the economy as being more like a cat than a washing machine.
  2. Favor businesses that benefit from their own mistakes, not those whose mistakes percolate into the system.
  3. Small is beautiful, but it is also efficient.
  4. Trial and error beats academic knowledge.
  5. Decision makers must have skin in the game.

Some influential “texts”

Monday, March 22nd, 2010

Scott Sumner makes a point I alluded to, when he discusses some influential “texts”:

Perhaps you saw the movie Metropolitan. There is a scene where a young man is debating the merits of Jane Austen with a young woman at a New York cocktail party. Finally in exasperation she asks the guy “Which Jane Austen books have you actually read?” He replied “I don’t actually read novels, I read literary criticism.” I’m kind of like that asshole. I haven’t read a lot of the intellectual classics, but can spend 30 minutes telling you what is wrong with each of them. Yes, I’m quite aware of how unfair this is; I know that when you boil an argument down to its essentials the work can lose much of its persuasive power. But I did read Pride and Prejudice.

I haven’t read all of the books that I consider influential, but I have read extensively about them.

His point about history ties in with my own comment on the lesson of Taleb’s Fooled by Randomness:

I once read all the New York Times from 1928–38. History seems really different when it is actually happening. The people back then seemed just as smart as we are. Of course we have a bit more history to learn from, so we did a bit better with monetary policy this time around. But we still made many of the same mistakes, just to a lesser degree.

The class distinctions back then seemed bigger — which surprised me. I knew that was the case for African-Americans, but I didn’t realize that class divisions among whites were also much greater, and that the upper class was so uninterested in the suffering of average farmers and workers. Or how much wealth was concentrated in New York City at that time.

I also developed a much greater respect for the stock, bond, and commodity markets’ ability to forecast the economy. They reacted to lots of things that seemed very important at the time, and that I think actually were very important, which are totally ignored by historians. A good example is the gold panic of early 1937 and the dollar panic of late 1937.

Books That Have Influenced Me

Friday, March 19th, 2010

Tyler Cowen recently answered a reader’s question of which books have influenced his world view the most. Some of the works I don’t recognize, others I haven’t read, others I’ve read about in great detail, and a couple I have in fact read. In that last category, Plato certainly held my interest, but I can’t point to any lasting influence. (Camille Paglia neither held my interest nor had any lasting influence.)

Arnold Kling and Bryan Caplan produced their own lists, and Tyler has since compiled a list of lists.

Naturally I got to thinking that perhaps I should produce my own list. An e-mail prod from Aretae pushed me over the edge — and just before I unleashed my oh-so-clever idea, he went and beat me to it. Anyway, here’s my list

  • Advanced Dungeons & Dragons Monster Manual – If I’m going to be honest, I need to admit that I was profoundly influenced by D&D and many other related games, which introduced me at a very young age to the entire notion of simulation — of using more-or-less mathematical models to explore how things might play out — and thus to many of the flaws in such models. Sometimes a more detailed model is less realistic, and sometimes a human’s judgment is invaluable.
  • The Count of Monte Cristo, by Alexandre Dumas – I don’t mean to imply that Dumas’s novel furnished me with an unquenchable desire for vengeance. Rather, reading The Count of Monte Cristo in 11th grade clarified just how derivative most of the entertainment we consume really is — everything has been done better by Dumas, and he did it over a century ago — and it got me wondering why we don’t regularly enjoy the pop classics. We read new books, listen to new music, watch new TV shows, and wait in long lines to watch new movies, when most of the best works produced — best for our own middle-brow tastes — are still new to us. (It also reminded me that our public-school curriculum goes out of its way to avoid books that kids, especially boys, might enjoy, under the pretense that teenagers with no life experience will learn literary analysis by parroting back what the teacher said about The Scarlet Letter, or some other work that does not speak to them at all.)
  • “The Man Who Came Early”, by Poul Anderson – I suppose I could pick any number of science fiction novels or short stories here, but Poul Anderson’s “The Man Who Came Early” really stuck with me. If you’re not familiar, it’s the story of an American MP pseudo-scientifically transported back in time to Viking-era Iceland, where his knowledge of modern technology enables him to do… very little. Anderson’s story does an excellent job of conveying just how little modern specialized technical knowledge is worth without adequate infrastructure and just how foreign modern society would seem to anarchic medieval Icelanders.
  • Capitalism: The Unknown Ideal, by Ayn Rand – There seems to be an unwritten rule that anyone who cites Rand as an influence should cite Atlas Shrugged, but I came to her work first through her short collections of essays. This regrettably stripped her enormous novels of most of their novelty; I already knew what she was trying to say. Anyway, the experience of reading Rand as a teenager is one of looking up to where God isn’t and asking, Why isn’t anyone else saying these things?
  • Economics in One Lesson, by Henry Hazlitt – When I bought my college textbooks a few weeks before the start of my sophomore year, I wasn’t sure what to make of Hazlitt’s Economics in One Lesson, because I’d already been through one year of indoctrination, and I was terrified that my econ professor was going to refute this wonderful book that seemed too good to be true. I felt quite fortunate that school year.
  • The Selfish Gene, by Richard Dawkins – I had found evolution fascinating from long before I found Dawkins’ book, but his work took my understanding to another level and introduced so many fascinating concepts — or explained them in a much broader context, like his discussion of tit for tat and the natural balance of defectors in a lax population of cooperators.
  • The Bell Curve, by Charles Murray – The chief lesson of The Bell Curve is that if you put one small chapter on racial differences in your book, no one will talk about anything else. Far more interesting to me was the story of the shift in society from the old order, in which elite schools were filled with the social elite, to the modern meritocratic order, in which elite schools are filled with the academic elite — which has unintended consequences.
  • Law’s Order, by David Friedman – Aretae mentioned Friedman’s anarcho-capitalist Machinery of Freedom, which I enjoyed but didn’t find especially influential. I much preferred Law’s Order, which explores the nature of property rights and brings Coase’s theorem to life.
  • Guns, Germs, and Steel, by Jared Diamond – I don’t know to what degree his grand theory is true, but I certainly found it thought-provoking. So much of our “technology” is agricultural — domesticated plants and animals — and it’s far too easy to neglect something so vital.
  • The Discovery and Conquest of Mexico, by Bernal Diaz del Castillo – I picked up this first-hand account of the Spanish expedition that toppled the Aztec empire because Diamond had mentioned it in Guns, Germs, and Steel, and I was not disappointed. My primary take-away was this: Why didn’t we read this in school? Real history is nothing like school history. Oddly, real history is more like a swords-and-sorcery novel: evil priests, hair matted with blood, commit human sacrifices atop pyramids amidst a city built on a lake inside a volcanic crater; frenzied fighting ensues.
  • Fooled by Randomness, by Nassim Nicholas Taleb – Ironically, the chief lesson of Taleb’s book, and its sequel, is humility. Things that were “obviously” inevitable after the fact, like World War II, were not obvious at the time. The Lebanese “knew” that any fighting around Beirut would soon blow over; theirs was a country where Jews, Christians, and Muslims had lived in harmony for centuries.
  • A Farewell to Alms, by Gregory Clark – I was familiar with Malthus from high school biology, and I was familiar with the standard refutation by Simon vs. Ehrlich, et al. What Clark did was to explore the conditions under which the Malthusian Trap would hold, the conditions under which it would not, and how policies ideal for one situation would backfire in the other. In an agricultural society with little human capital, the plague can raise living standards. In a modern society? Not so much.