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Despite his blunt but abrasive style, Nassim Taleb is a master of conveying complicated ideas and revealing hidden patterns that would otherwise easily escape many people’s eyes. Using observations, historic stories and anecdotes with satire and ridicule, he aptly describe statistics and risks in a way that is not elusive and confusing to laymen. A voracious reader, he is able to integrate great ideas from philosophy, statistics, religion, economics, psychology, political science, medicine into his telling of Incerto. His first two books Fooled by Randomness and Black Swan surround around the theme of fat tail risks that most people are likely to ignore during “normal” times and therefore tremendously underestimate these risk. These risks nevertheless have enormous impacts on societies. If these two books are meant to identify the problem, his latest two books Antifragile and Skin in the Game are concerned with strategies to mitigate the problem. The metaphor “skin in the game” is used to describe any disincentive that exist in a system to prevent individuals from adopting certain reckless measures that would incur damages. It seems to be the optimal way he offers to cope with any systematic risks.
In modernity, many enormous risks go unnoticed for many years because these risks are created, managed, and in some cases intentionally veiled by an ever growing class that has no skin in the game nevertheless makes crucial decisions for others. According Taleb, bureaucrats, policy wonks, politicians, bankers, corporate executives, journalists, and academics all belong to this class. That many hidden fat tail risks end up blowing up to the faces of these so-called elites is precisely due to their safe insulation from these risks. One can only learn from bearing the direct consequences of one's own mistakes. No personal consequences, no sincerity; no skin in the game, no effective risk management. In order to mitigate these risks, disincentives thus need to be put in place in the system. Everyone needs to put their skin in the game. This prescription seems to resonate with the prospect theory that one is more averse the risk than embracing the reward of equal amount. This asymmetry is reminiscent of evolution.To put it plainly, we can only be so happy but the other side is the end of our existence. Evolution is an emotionless, cruel (from an individual life's perspective), but super effective machinery. Systems improve by eliminating the weak. He further suggests that the only way for society to function well has got to be from bottom up, not top down. That's why globalization, interventionism, hierarchical bureaucracy have not and will not work. He also explains Elinor Ostrom's pioneering work on self-governance to address the "tragedy of the commons" as follows, "the skin-in-the-game definition of a commons: a space in which you are treated by others the way you treat them, where everyone exercises the Silver Rule." If such a commons gets established by explicit or implicit rules, the resources can be managed well to avoid a tragedy of the commons caused by individuals' pursuit of self interests while ignoring others' welfare. It seems that Taleb interprets Ostrom’s work as evidence for decentralization of governance. But Ostrom’s theory is characterized as “polycentricity.” The optimal scale of governance should correspond to the problem of the same scale. For instance, the global scale of climate change essentially requires international cooperation. In this book, he debunks the myths of “majority rule,” “Pascal Wager,” among others. He ridicules the “Intellectual Yet Idiots.” He instructs that we should choose surgeons that do not look like surgeons. He distills the wisdom of time into the expert called Lindy. The reason why it is the stubborn minority that dominates is because this smaller group has more at stake, in other words, skin in the game. He uses the example that how one family member with peanut allergy can spread the “no peanut” rule first to the household and later to whichever social circle this member happens to be at. The reason why “Pascal Wager” is not true is because it cost a lot for someone to believe in God. Faith is not cheap talk. Religious people have put their necks on the line to be truly faithful unless they are hypocrites. Some quotes from the book: "You will never fully convince someone that he is wrong; only reality can." "There is no evolution without skin in the game." "The curse of modernity is that we are increasingly populated by a class of people who are better at explaining than understanding." "What is rational is what allows the collective - entities meant to live for a long time - to survive." "Things designed by people without skin in the game tend to grow in complication (before their final collapse)." "The main idea behind complex systems is that the ensemble behaves in ways not predicted by its components. The interactions matter more than the nature of the units."
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1/14/2018 0 Comments What I have been reading Leonardo Da Vinci by Walter Issacson Da Vinci is the ultimate learning machine in human history. In his eyes, the world is full of secrets that await to be revealed and riddles that need to be solved. Driven by passionate curiosity and armed with acute observation, he beautifully integrates arts and sciences in his paintings and designs. His seven-thousand-page notebook is equivalent to a museum, full of his thoughts, imagination, fantasies, and creation. Anyone with intellectual curiosity should read how this multi-disciplinary master lived a full life of mind.
Zero to One by Peter Thiel Thiel writes in the Preface, "The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin won't make a search engine. And the next Mark Zuckerberg won't create a social network. If you are copying these guys, your aren't learning from them." Many view this book as a business book, serving as a guide for aspirational entrepreneurs. I see this book as an educational one. In an age when competition is dearly valued in the education system, when young children are constantly evaluated by numeric metrics, not many participants bother to step back and weigh the pros and cons of competition. To stand out from a large crowd, we naturally assume, must be through cruel and fierce competition. Stories of the most successful people in many fields suggest that the path from 0 to 1 is much easier than that from 1 to n. When Artificial Intelligence is forcefully driving the world by surpassing humans in repetitive and computation-intensive tasks, creativity and innovation cannot be more essential to our survival. The AI Revolution: The Road to Superintelligence by Tim Urban While many are aware of global climate change and nuclear war being potential existential risks to the humanity, serious concerns for Artificial Intelligence are only shared within a small circle of intellectual elites including Stephen Hawking, Elon Musk, Bill Gates, Nick Bostrom among others. The three stages of AI development include Artificial Narrow Intelligence (ANI), Artificial General Intelligence (AGI), and Artificial Super Intelligence (ASI). We are currently at the first stage ANI. ANI has quietly and forcefully become part of modern life for many citizens in the developed world. Every time when you watch a movie, Netflix would recommend something with the saying "you may also like this..." Every time when you order a book on Amazon, you will see "Customers who bought this also bought..." All these are done by algorithms, ANI. ANI has become so good at what it is specifically programmed to do that it can beat the human world chess and go champions. Given the exponential growth rate of technology, it may well be a couple of decades before we reach AGI. AGI displays general intelligence equivalent to human intelligence. Many may celebrate that prospect and think we will achieve some sort of utopia. After all, what could go wrong if we let AI do all the work and we enjoy lives? Just like the natural evolution did not stop when some animals climbed out of the ocean and started to occupy the land, AI will more than likely continue to improve once it arrives at AGI. Unlike the slow and gradual pace of natural evolution, the growth in AI will be exponential. Before we know it, AGI will become ASI. By then, we will be confronted with the new reality that for the first time our intelligence will be exceeded by AI, paradoxically created by us. The thought of this prospect itself can generate fears. The good news is that many highly intelligent people are thinking about AI safety. Let's hope AI will only be our complements, never substitutes. 10/24/2017 0 Comments Reading Sapiens Before opening the book Sapiens, it felt odd to read a book that condensed 70000-year history of our species into 400 pages. I thought the author must have cut out many inconvenient details that did not perfectly fit into his theory to explain historic events and trends. Last time when I read a book in this genre, it was Jared Diamond's Guns, Germs, and Steel. To my surprise and delight, Sapiens actually reads quite compelling. Yuval Harari has come up with a common thread that runs throughout the entire human history and he has done a beautiful job in convincing us of his interpretation of history.
There are certain similarities between Guns, Germs, and Steel and Sapiens. Both books cover long historic periods. Both draw upon insights from several disciplines such as anthropology, biology, and geography. In the meantime, these are two different books. Diamond's book was motivated by the question about inequality that exists in different societies across the world. He attributes the gap of wealth between European counties and countries in the southern hemisphere such as New Guinea to geography. Sapiens was motivated by a different question. For as long as the collective human consciousness recalls, we have been searching for an answer to the question, "what makes us distinctive from all other life forms on earth?" Biologists used to attribute our uniqueness to the ability to make tools. This myth has actually been debunked in recent years as many animals have been found to be very adept at making and using tool to accommodate their needs. Religions such as Christianity and Islam distinguish us from all others by insisting that only human beings have eternal souls. Modern scientific studies until this day fail to validate this notion. Harari thinks that we as an insignificant species for a long period of time were able to climb up the food chains due to our abilities to compose stories, tell stories, and make others believe these stories as if they are the reality. He has a name for the commonly held-to-be-true stories: inter-subjectivity. On page 117, Harari defines "inter-subjective" as "something that exists within the communication network linking the subjective consciousness of many individuals." He further explains, "If a single individual changes his or her beliefs, or even dies, it is of little importance. However, if most individuals in the network die or change their beliefs, the inter-subjective phenomena will mutate or disappear... Many of history's most important drivers are inter-subjective: law, money, gods, nations." This list also includes: corporation, human rights, democracy, or anything that only exists in a large group of people's consciousness. The tendency and ability to share beliefs with one another make it possible for thousands or even millions of people to cooperate. This inter-subjectivity can become so powerful that even overwhelms the objective reality, and it can be so effective to unite individuals to form tribes, communities, cities, empires, and nations. As Harari writes, "The first millennium BC witnessed the appearance of three potentially universal orders, whose devotees could for the first time imagine the entire world and the entire human race as a single unit governed by a single set of laws. Everyone was "us', at least potentially. There was no longer 'them'. The first universal order to appear was economic: the monetary order. The second universal order was political: the imperial order. The third universal order was religious: the order of universal religions such as Buddhism, Christianity, and Islam." Thanks to the combination of the three inter-subjective entities, Sapiens on every continent were brought together into a highly interconnected world. In other words, globalization can never be achieved without these unifying inter-subjective forces. The wheel of history is constantly steered by these inter-subjective forces. Along the way, cognitive revolution and agricultural revolution occurred to humanity. For a very long time, humans lived under an illusion that they could know all that was to be known in one source. For instance, many held that the Bible contained all the knowledge about the universe. This complacency stopped around five hundred years ago, arguably the beginning of scientific revolution. The great discovery of our own ignorance propels us to constantly sail beyond the familiar horizon. Harari identifies three critical ways in which modern science differs from previous forms of knowledge: "the willingness to admit ignorance," "the centrality of observation and mathematics," and "the acquisition of new powers." For the first time in history, scientific knowledge can be directly translated into pure power. You don't need to look far in recent history to find ample examples of this conversion. On the day when the first atomic bomb was detonated, the nuclear physicist who helped develop this deadly weapon Oppenheimer has been quoted to say, "Now I am become Death, the destroyer of worlds." Now, humans have acquired the capacity for total self destruction. No wonder the great Einstein once made a remark, "“I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones.” The entire climate has been fundamentally intervened by human activities. We are starting to feel the consequences of our actions. It has never been easier to translate scientific knowledge into power. The same however cannot be said about the relationship between power and happiness. With more power accumulated by us did not come more happiness. Sapiens ended with quite a grim picture for humanity's future. In some sense, our species has been elevated to the status of God with all the power we have acquired through perpetual scientific revolution. Harari posed this question to all his readers: "is there anything more dangerous than dissatisfied and irresponsible gods who don't know what they want?" 10/7/2017 1 Comment Reading Yuval Harari's Homo Deus I've finally finished reading Yuval Noah Harari's book: Homo Deus. His visionary account of what may happen to the humanity in the future is built upon his deep understanding of our past. In his last widely acclaimed book Sapiens, Harari lays out three important revolutions in the last 70,000 years that have fundamentally shaped who we are today. These revolutions are: the Cognitive Revolution, the Agricultural Revolution, and the Scientific Revolution. Now that the view organism is algorithm takes root in many minds, where is Artificial Intelligence (AI) taking us next? No one has a crystal ball in their hands to see the future. Harari's reading of history and current affairs informs him of a quite dark future.
In the past couple of centuries, with scientific and technological advances, humanism, attaching life's meaning to individuals' inner feelings and free will, has replaced traditional religions becoming the dominant ideology. With "free will" being fundamentally challenged in the lab by biology, neuroscience, and psychology, one can't but help wonder if there is such a thing as "free will." Like Harari writes, "Next time a thought pops into your mind, stop and ask yourself: 'Why did I think this particular thought? Did I decide a minute ago to think this thought, and only then think it? Or did it just arise, without any direction or permission from me? If I am indeed the master of my thoughts and decisions, can I decide not to think about anything at all for the next sixty seconds?' Try that, and see what happens. " If there is no real "free will," then what are we? The implication is, "we can manipulate and even control their desires using drugs, genetic engineering or direct brain stimulation." Harari's another acute observation of history: consciousness and intelligence have always gone hand in hand until recently. Now with machine/deep learning, artificial neural network and other techniques, AI can do tasks better than humans. Think of the case when IBM Watson beat the human chess champion. A decoupling process of these two is unfolding in front of our eyes. In the foreseeable, we may have self-driving cars to take us anywhere we want to go. We may depend on algorithm to detect any potential medical issues in our bodies. We may use algorithms to figure out for us what the best way to learn a specific subject based on our own natural attributes and learning patterns. Now that intelligence can be independent of consciousness the only thing we can cling to for our uniqueness, the major question then would be: what are we here for? In the past, we have come up with different stories to make us unique. Whether it's religion or humanism, we managed to convince ourselves of the indispensable nature of our existence in the universe. With the humanity moving towards dataism, the new religion of 21st century, our indispensable existence will be fundamentally questioned. Are we just a bunch of data processing medium for a grand scheme? Since no one has the power to see the future, Harari ends his book by posing some questions to every reader of his: "1. Are organisms really just algorithms, and is life really just data processing? 2. What's more valuable - intelligence or consciousness? 3. What will happen to society, politics and daily life when non-conscious but highly intelligent algorithms know us better than we know ourselves?" Here are some insightful quotes: "History isn't a single narrative, but thousands of alternative narratives. Whenever we choose to tell one, we are also choosing to silence others." "Human networks built in the name of imaginary entities such as gods, nations and corporations normally judge their success from the viewpoint of the imaginary entity." "Stories serve as the foundations and pillars of human societies. As history unfolds, stories about gods, nations and corporations grew so powerful that they began to dominate objective reality." "Science and religion are like a husband and wife who after 500 years of marriage counselling still don't know each other. He still dreams about Cinderella and she keeps pining for Prince Charming, while the argue about whose turn it is to take out the rubbish." "Religion is any all-encompassing story that confers superhuman legitimacy on human laws, norms and values. It legitimizes human social structure by arguing that they reflect superhuman laws." "The greatest scientific discovery is the discovery of ignorance." "Religion is interested above all in order. Science is interested above all in power." "People who believe in the hi-tech Ark should not be put in charge of the global ecology, for the same reason that people who believe in a heavenly afterlife should not be given nuclear weapons." "Humans were supposed to distill data into information, information into knowledge, and knowledge into wisdom." |
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