Tom Slee. No One Makes You Shop At Walmart: The Surprising Deceptions of Individual Choice
This book is not really about shopping at Walmart, but I’ll start there anyway. Suppose you’re grousing about Walmart. It wants to move into your town and you’re worried about the effects on the local economy. Or it already has, and you think the effects you warned about are already becoming apparent. There’s a good chance that the person you’re grousing to is going to point out that no one makes anyone shop at Walmart. Indeed, if your interlocutor impolite enough she may even raise the awkward point that she saw you just last week emerging from that very store. If everyone, including you, shops at Walmart, what better evidence, then, that the community has collectively decided to welcome Walmart by making a series of individual choices to support it?
The answer, according to Slee, is no, and his book is a very careful and methodical cataloging of some of the most important ways in which choice is more complicated than the view sketched above suggests, which Slee calls MarketThink. Very briefly, our choices are not made in a vacuum. We make the choices we do while responding to agents who are making choices of their own, which choices themselves are in part responses to our own choices or what they anticipate will be our choices. And in choice situations of this sort, it is often the case that every individual agent makes choices which are perfectly reasonable from where she is situated, but which lead to outcomes which no one involved would prefer all things considered.
Preference, then, turns out to be more complicated than it first appears. Sometimes “preference” refers to what an agent chooses from the options available to her, given the choices that other agents are making or intending to make. Sometimes, by contrast, it attaches to the outcome which the agent would prefer. A great deal of Slee’s book is taken up with explaining how and why these two notions of preference frequently come apart.
Readers who know even the most basic game theory will know that Slee is not just being modest when he claims in the preface that there is little original in his book. I’m not sure I actually learned anything new from this book, since I’ve already read my Rapaport and my Axelrod and my Sen and so on (and I really haven’t read much beyond that). Even so, I found it well worth my time. There’s real value in having the inadequacies of MarketThink detailed for two hundred pages of marvelously clear prose. I think that I was already predisposed to agree with virtually everything Slee said, but reading him made me aware that I do sometimes slip into versions of MarketThink when I clearly shouldn’t. So, the book was edifying and entertaining at the same time.
It’s worth noting, though I don’t intend this as a criticism, that the book is almost entirely negative. That is, it’s about the inadequacies of MarketThink, and not about how to correct for those inadequacies. That’s just fine with me, but I found myself wondering from time to time how an intelligent libertarian would respond to Slee’s main line of argument. I suspect that an intelligent libertarian would have to concede that MarketThink, as Slee depicts it, is crude and inadequate. But a libertarian version of Slee might just as easily write a whole book, also drawing on economics and game theory, to show how regulation and intervention in the market often leads to unintended and frequently unwanted results. The failure of MarketThink does not automatically establish the soundness of any alternative, of course. Now, I think the response to this point is to try to get more specific about exactly what interventions are warranted and how we propose to avoid unwanted consequences. But that just means that the argument goes on (and Slee would surely agree). But thanks to Slee (and the people whose work he draws on) the argument ought to go on without silly appeals to MarketThink. And that’s an advance worth celebrating.
Nassim Nicholas Taleb. The Black Swan: The Impact of the Highly Improbable
What a strange book! This book engages with an extensive literature on risk, probability and the psychology of risk and probability assessment, but it does so in a most unacademic way. Taleb tells stories, engages in autobiography, subverts our expectations about the relevance of the autobiographical passages, harangues, insults, scolds, relates his fantasies about humiliating rival thinkers, bullies, ends expository paragraphs with “Capiche?”, pleads, and repeats himself again and again. Taleb writes in a rough, informal, and highly idiosyncratic way. I cannot imagine that the editor of this book wanted the book as it is in its final form, and I sort of get a kick out of imagining Taleb forcing them to accept it anyway (I’m sure they made money on it nonetheless). He must be a serious pain in the ass to work with.
Anyway, Taleb’s basic idea is that we – human beings, that is – are incredibly bad at assessing risk. Our models for risk assessment tend underestimate the impact of the highly improbable. But marinate on this, brother: There are so many possible highly improbable events that it is highly probable that the highly improbable will intrude, and intrude very messily, into reality, and blow all our little models to bits. We just don’t know what they’ll be. We live in a world dominated by the highly improbable, and most of our risk models are worse than useless: because they encourage us to think we’ve got a handle on things, they make us even more vulnerable to extraordinarily improbable events when they do occur. Taleb doesn’t just confine himself to the world of finance, where he made his living dealing with risk, in order to illustrate this point, preferring to range over a much broader field of history in search of arguments and examples.
So why we do this? Much of Taleb’s book is a meditation on this very question, and, I think, a very useful one. When we look at past events, we have a tendency to slip into narratives that make events seem to follow one another in a natural and expected way. This encourages us to think that, going forward, events can be expected to follow one another in a natural and expected way. It isn’t so. And if you actually look at the track record of experts in various fields, you’ll find them regularly getting blindsided by events which were anything but predictable. And if you actually listen to the experts defending wrong predictions after the fact, you’ll regularly hear them defending their predictions in the following form, “But I was exactly right in my prediction, except that X,” where X is something highly improbable that unfortunately threw everything off. But if this happens again and again, we ought to stop and wonder about the value of such predictions in a world that serves up so many Xs.
This insight is not just valuable for people making their living predicting the future, in my opinion. I think this book should be required reading for anyone doing historical work, which, in my experience, frequently a) falls into the habit of ad hoc explanations which oversimplify reality, and b) often attempts conjectural reconstructions of the past on the basis of mere plausibility, again in a way that I think grossly oversimplifies matters. (I have a post in draft now illustrating (b).)
There’s more – much more – to Taleb’s story about the human propensity to underestimate the potential impact of the improbable, which I won’t go into. I will say that Taleb seems to me just a bit too enamored with stock evolutionary psychology explanations – which is funny in a book about how prone we are to manufacturing bogus ad hoc explanations, since the same vice is pretty common in evolutionary psychology, in my opinion. But whatever. There’s still a lot of great material here. And I found myself grateful for the repetition in the end. The first twenty times I read Taleb complaining about bad excuses for predictions gone wrong I nodded my head and thought “Yeah, sure.” But about the twenty-first time I thought “Holy fuck! That is so true. I do that too!”
Anyway, if you’re curious here’s a Malcolm Gladwell piece on the guy from the New Yorker. And here’s his (ugly!) website, where you can get a taste of how feisty and combative he is, since he appears to respond to all the reviews his books have gotten. I was amused to see his response to Gregg Easterbrook, who is seriously the dumbest fucking guy ever.
Henry Fielding. Joseph Andrews
Not nearly as good as Fielding’s Tom Jones, but then practically nothing is. I found the first fifty and the last fifty pages awesome, with some pretty plodding material in between them. Fielding’s theme is sexual desire in its various forms, its frustrations, its gratification, and so on. As I was reading it I thought I was entertaining myself with a fluffy, silly story about a man and a woman eager to get married so that they could get it on. But when I finished it and looked back I realized that for a fluffy, silly book it managed to sneak in quite a bit of interesting reflection about its theme while it was at it. Anyway, check out Chapter V, which is pretty damn funny:
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