Black swans and the Fourth Quadrant

Statistician and economist Nassim Nicholas Taleb has written an essay on what he calls the Fourth Quadrant, or the statistical “danger zone”. It’s in depth and I found it technically challenging to understand: but I felt it was well worth it in the end. Seriously, go read it, it makes you feel cleverer. The gist:

Statistics can fool you. In fact it is fooling your government right now. It can even bankrupt the system (let’s face it: use of probabilistic methods for the estimation of risks did just blow up the banking system).

Taleb rails against the misuse of statistical economics that has lead us to our current economics woes. Also check out the various responses to Taleb’s essay by assorted luminaries.

[essay on][image from BotheredByBees on flickr]

2 thoughts on “Black swans and the Fourth Quadrant”

  1. Quote: “• Technology, where it has been proposed that an uncannily smooth historical determinism is in charge, propelling us to the Singularity.”

  2. Yeah, the holes are really starting to open up in Kurzweil’s thesis:

    1: Exponential trends generally turn into sigmoid curves

    2: Software development doesn’t necessarily increase in utility in an exponential fashion

    However, it is possible to argue that Taleb’s conception of a Black Swan Event could include the emergence of non-human intelligences.

    Only TIME will tell.

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