Fooled By Randomness: The Hidden Role of Chance in Life and in the Markets

In the Prologue, Taleb introduces the book’s main topic: “luck disguised and perceived as nonluck (that is, skills)” (26). Taleb says that humans are not very far removed from their ancestors and that much of how humans perceive the world is influenced by their primal nature: “We are still very close to our ancestors who roamed the savannah. The formation of our beliefs is fraught with superstitions—even today” (26). He connects the “primitive” tendency toward superstition to certain patterns of thought, such as the “literary mind,” that lead people to mistake noise for meaning. Symbolism, Taleb claims, is “the child of our inability and unwillingness to accept randomness” (27). Taleb also claims that randomness is consistently overlooked as a causal factor, particularly by experts in economics. As a result of these tendencies, Taleb claims that risk-takers in general are not courageous; rather, they experience delusions and underestimate randomness.

Taleb presents the thesis of the book in the form of a table that highlights the ways people mistakenly attribute a cause, such as “skill,” to an outcome that is actually the result of luck. Taleb announces that his aim is “to defend science (as a light beam across the noise of randomness) and to attack the scientist when he strays from his course” (31). Taleb concedes that humans are flawed, noting that humans are often engaged in an internal struggle between their cognitive apparatus and their emotions. He calls this the “Tragic Vision of humankind” (31), which he describes as the belief “in the existence of inherent limitations and flaws in the way we think and act and requires an acknowledgment of this fact as a basis for any individual and collective action” (32). One of Taleb’s foremost intellectual influences, the philosopher Karl Popper, is among those who believe in the Tragic Vision.