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Wednesday, March 2, 2011
Nassim Nicholas Taleb Interview with Jaffer Ali
By Jaffer Ali
[What follows is a FICTIONAL interview with Nicholas
Taleb. Whenever possible, exact quotes from the books;
Fooled By Randomness, The Black Swan, and The Bed Of
Procrustes were used. To my knowledge, Taleb never
addressed the online media ecosystem directly, but I
believe what follows faithfully represents what he would
say about the ridiculous online media and advertising
industry most of us participate in.]
JA: Mr. Taleb, may I call you Nassim?
NT: Please. I don't go for this alpha male ritual. The
only definition of an alpha male is if you try to be an
alpha male, you will never be one.
JA: OK Nassim, I guess if we both don't try, then the
matter is resolved. You have made an impact on many
disciplines from finance to econometrics. Do you think
your way of thinking and critique can be applied to the
online media ecosystem?
NT: Without a doubt. The general theme of my work is the
limitations of human knowledge, and the charming and less
charming errors and biases when working with matters that
lie outside the field of observation; what lies on the
other side of the veil of opacity. Simply put, online
marketing and specifically behavioral targeting is not
capable of dealing effectively with nonlinear and complex
matters.
Complex matters like human behavior are fraught with
interdependence and in spite of data mining and predictive
modeling's hyped up successes in physics and engineering,
that prestige has endangered us when it comes to much of
our media and financial models.
JA: Nassim, many of the quantitative analysts that
worked on Wall Street have migrated over to Madison
Ave. Do you think these "quants" will be any more
successful in the advertising industry than they
have been in finance?
NT: To bankrupt a fool, give him information. Counter
to the common discourse, more information means more
delusions; our detection of false patterns is growing
faster and faster as a side effect of modernity and
the information age. Thanks to our detections of false
patterns, along with real ones, what is random will
appear less random and more certain- our overactive
brains are more likely to impose the wrong, simplistic
narrative than no narrative at all.
JA: As I have grown older, I have become more aware of my
ignorance. I wrote an article called Embracing Uncertainty
http://bit.ly/eLgjeS which discussed my personal journey
from demanding certainty. What are your views on this?
NT: You find peace by coming to terms with what you don't
know. Knowledge is subtractive, not additive- what we
subtract is reduction by what does not work, what not to
do...not what we add.
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JA: Nassim, if I can be frank, you seem to be a Luddite
who has a bone to pick with technological solutions to
economics, finance, and marketing. Is this a fair
criticism?
NT: Many reduce my ideas to opposition to technology when
in fact, I am opposing the naive blindness to its side
effects-the fragility criterion. I'd rather be uncondition-
al about ethics and conditional about technology than the
reverse. I rarely worry about what others think of me or
my work. They will envy you for your success, for your
wealth, for your intelligence, for your looks, for your
status- but rarely for your wisdom.
JA: Online marketing folks have spent a great deal of
money and energy on predictive modeling. Former Google
CEO, Eric Schmidt said in a magazine article, "...we will
be able to predict what someone will search for before
they search for it."
NT: I have spoken about the "scandal of prediction" when
it comes to Wall Street, but this pales next to the
arrogance of prediction of behavioral targeting models,
Google and Mr. Schmidt's bravado. Anyone voicing a fore-
cast or expressing an opinion without something at risk
has some element of phoniness. Unless he risks going down
with the ship, this would be like watching an adventure
movie.
The ancients knew very well that the only way to understand
events was to cause them. They would take forecasting very
seriously if it were pointed out to them that in Semitic
languages, the words for "forecast" and "prophesy" are the
same.
One of the great shams of online marketing is that the
validity of its predictive models is never tested "out of
sample." In other words, you can construct a model that
produces a seemingly accurate conclusion from an existing
set of data. But test it on a different set of data and
the predictive ability of the most elaborate constructed
models simply evaporates.
JA: Don't you think that collecting all this data in one
place, like what Google is doing, creates a tremendous
opportunity to succeed where others have failed?
NT: Centralization creates interlocking fragility, while
reducing volatility and giving the appearance of stability.
In other words it creates devastating Black Swans. The
media ecosystem is swelling into gigantic, incestuous,
bureaucratic repositories of shared data ? when one fails,
they all fall.
JA: Is there anything thought with which you would like
to leave our readers?
NT: With modern technology, we created youth without
heroism, age without wisdom, and life without grandeur.
END
The above is a brief extrapolation of Nassim Taleb's ideas
and applying them in a cursory manner to the online market-
ing industry. While I believe the ideas represented are
faithful to his general precepts, any mistakes are mine
and not his. JA
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Jaffer Ali is the CEO of Vidsense and PulseTV.com. He can
be reached at 708-478-4500 or email him directly at j.ali
(at) Vidsense (dotcom).
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Questions? Comments? Email me at: quote (at) Quotes2u.com
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