As humanity progresses, the belief that we can predict the future based on the past has become widespread. That's what modeling is all about. But what if it could be proven that almost everything that happens is a coincidence or a fluke?
That's what Brian Klass' book Fluke would have us believe. The now famous term “black swan” was used by Taleb to describe the financial crisis. But almost everything that happens can be moving randomly. The story of Mr. and Mrs. Stimson visiting Kyoto in 1920 is now well known. When the United States had to drop the atomic bomb, Kyoto was on the list, but due to the intervention of Stimson (Secretary of the Army), Hiroshima was dropped instead, citing fond memories of holidays. Also, although Nagasaki was not on the radar, other target cities were covered in clouds. Nagasaki thus became an unintended victim. This may sound fanciful, but it's true. Thousands of lives were affected by this score, but Kyoto was spared.
The class begins with this example and goes on to introduce various instances in which randomness guides our lives. So while traditional Indians still believe in the law of karma, which says that things are predetermined, the class would dismiss it by saying that things are random and caused by chance. This probably also explains why some businesses work while others don't. Or, a single successful startup in a particular field cannot be imitated by other companies.
The importance of coincidence is also illustrated when Charles Darwin was offered a role on the ship's crew when the captain was looking for someone to talk to during the voyage. If that hadn't happened, Darwin probably wouldn't have had the insights that are now legendary.
The author talks a lot about the “garden of forked paths” exemplified by the disproportionate influence of small events that make up chaos theory.
Similarly, he emphasizes the difficulty or even impossibility of predictions, from weather forecasts to economic forecasts. This is something we are aware of because these forecasts change regularly as circumstances change. Interestingly, the basic assumption made in all predictions is ceteris paribus. This means everything else is held constant.
However, there is no alternative that is constant and random, making prediction an unrealistic but useful academic exercise. As such, most predictions are not certain, but represent a range of possibilities. Here the author distinguishes between “risk” and “uncertainty.” A war anywhere in the Middle East could cause severe disruption across seemingly unrelated regions. Therefore, “why and when” something happens is just as important as what happens.
The author finds these answers in a multidisciplinary matrix that includes political science, philosophy, economics, evolutionary biology, and geology. He becomes provocative most of the time. Let's look at history, for example. There are two ways to look at him. The first is the storybook version, which shows that everything is ordered and structured. Individuals leave, but trends dominate. However, these tendencies are the inevitable result of human collectiveness. The other version is more dramatic. It states that the individual is supreme and that his or her unique actions can change the shape of things. Hitler is a perfect example that we can relate to.Moreover, even President Putin, who suddenly changed his life.
This book is a roller coaster because as a reader you can keep debating with the author as there can be compelling arguments on both sides. He speaks of a “basin of attraction” that applies to politics. The American presidency is a good example of having two political parties and therefore everyone gravitating toward one or the other. And the victory of this one person could shape the way political and economic relations develop across nations. In the old days, it was religion that created such a basin of attraction.
The author further argues that when a society appears stable (this also applies to the economy);
So, while black swans have been used to refer to specific problems that erupted in the United States, there are also some developments that occur randomly and cast a shadow on the entire world. This could result in trade embargoes or volcanic eruptions in any part of the world. Class also takes us into the world of superstition, which he says is not “the providence of the simple.” These were invented to deal with causal uncertainty, which caused disorientation.
Fluke is a book that readers will always relate to. Although some may disagree with the author's views, his arguments are worth noting. It's very interesting to hear him talk about the market and how experts respond to basic questions. Experts are asked for hours on business channels for their opinions on these developments. There is no special reason for the movement as it can be caused by random events. However, that statement is always accompanied by phrases such as “the market is reacting'' or “stock prices fell today.'' The kind of teleological bias he refers to permeates our thinking. And on a lighter note, he says that experts can never say three simple words: “I don't know.” However, speaking positively in a flimsy argument certainly carries more weight. This book is a must-read that will tickle the reader's sensibilities in every sense of the word.
Book: Fluke: Chance, Chaos, and Why Everything We Do Matters
author: Brian Klaas
the publisher: hachette
336 pages, 699 rupees
The author is Chief Economist, Bank of Baroda
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