Scepticism and Morality

I ended my last post with the statement that sceptics cannot take ideas – particularly moral ideas seriously. Here is an excerpt from the book Fooled by Randomness – The Hidden Role of Chance in Life and in the Markets by Nassim Nicholas Taleb that serves as an illustration of my point.

Current thinking presents the two following polarized versions of man, with little shades in between. On the one hand there is your local college English professor; your great-aunt Irma, who never married and liberally delivers sermons; your how-to-reach-happiness-in-twenty-steps and how-to-become-a-better-person-in-a-week book writer. It is called the Utopian vision, associated with Rosseau, Godwin, Condorcet, Thomas Paine, and conventional normative economists (of the kind to ask you to make rational choices because that is what is deemed good for you), etc. They believe in reason and rationality – that we should overcome cultural impediments on our way to becoming a better human race – thinking we can control our nature at will and transform it by mere edict in order to attain, among other things, happiness and rationality. Basically this category would include those who think that the cure for obesity is to inform people that they should be healthy.

On the other hand there is the Tragic Vision of humankind that believes in the existence of inherent limitations and flaws in the way we think and act and requires an acknowledgement of this fact as a basis for any individual and collective action. This category of people includes Karl Popper (falsification and distrust of intellectual “answers”, actually of anyone who is confident that he knows anything with certainty), Friedrich Hayek and Milton Friedman (suspicious of governments), Adam Smith (intention of man), Herbert Simon (bounded rationality), Amos Tversky and Daniel Kahneman (heuristics and biases), the speculator George Soros, etc. The most neglected one is the misunderstood philosopher Charles Sanders Pierce, who was born a hundred years too early (he coined the term scientific “fallibilism” in opposition to Papal infallibility). Needless to say that the ideas of this book fall squarely into the Tragic category: We are faulty and there is no need to bother trying to correct these flaws. We are so defective and so mismatched to our environment that we can just work around these flaws. I am convinced of that after spending almost all my adult and professional years in a fierce fight between my brain (not Fooled by Randomness) and my emotions (completely Fooled by Randomness) in which the only success I’ve had is in going around my emotions rather than rationalizing them. Perhaps ridding ourselves of our humanity is not in the works; we need wily tricks, not some grandiose moralizing help. As an empiricist (actually a sceptical empiricist) I despise the moralizers beyond anything on this planet: I still wonder why they blindly believe in ineffectual methods. Delivering advice assumes that our cognitive apparatus rather than our emotional machinery exerts some meaningful control over our actions. We will see how modern behavioral science shows this to be completely untrue.
(emphasis mine)

To which I will only say: If our cognitive apparatus exerts no meaningful control over our actions, isn’t Taleb wasting his time writing a book? He should be composing music instead.

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3 Responses

  1. Adam Smith shows how to fight the growing Oligarchy. Mediated by Joey Panto.
    http://02e56fa.netsolhost.com/blog1/index.php/2009/10/07/adam-smith-how-we-can-fight-the-oligarch

  2. I’ve noticed that practically everyone involved with behavior science or evolutionary psychology are determinists who deny the existence of free will in one way or another. In EvPsych everything is determined by either the sex drive or “in/out group” dynamics. In this view, mankind is nothing more that an elaborate biologically determined machine. In many ways, this materialist view of man is worse than the religious one.

    I also find it ironic how all these determinsts – Taleb included – believe that everyone else is determined buy they are able to get to the truth. So Taleb says that our emotional machinery is what controls us but what about him? Oh, he’s somehow exempt. How convenient. Isn’t this the fallacy of self-exclusion?

    Lastly, Taleb says that he will show how our cognitive faculty is meaningless. I’m curious as to what type of evidence he included to prove this. Could you comment on that.

    Thanks

  3. madmax,
    Apart from the prologue (from where that excerpt was taken) and the following, Taleb doesn’t explicitly deal with the issue and restricts himself to examples of irrational behavior under uncertainty.

    Kahneman and Tversky went in a completely different direction than Simon [bounded rationality] and started figuring out rules in humans that did not make them rational – but things went beyond the shortcut. For them, the rules, which are called heuristics, were not merely a simplification of rational models, but were different in methodology and category. They called them “quick and dirty” heuristics. There is a dirty part: These shortcuts came with side effects, these effects being the biases, most of which I discussed previously throughout the text (such as the inability to accept anything abstract as risk). This started an empirical research tradition called “heuristics and biases” tradition that attempted to catalogue them – it is impressive because of its empiricism and the experimental aspect of the methods used.
    Since the Kahneman and Tversky results an entire discipline called behavioral finance and economics has flourished. It is in open contradiction with the orthodox so-called neoclassical economics taught in business schools and economics departments under the normative names of efficient markets, rational expectations and other such concepts. It is worth stopping, at this juncture, and discussing the distinction between normative and positive sciences. A normative science (clearly a self-contradictory concept) offers prescriptive teachings; it studies how things should be. Some economists, for example those of the efficient-market religion, believe that our studies should be based on the hypothesis that humans are rational and act rationally because it is the best thing for them to do (it is mathematically “optimal”). The opposite is a positive science, which is based on how people actually are observed to behave.

    Taleb’s position is that while our cognitive facility can, with effort, understand and formulate rational responses to uncertainty, our emotional machinery remains flawed. Taleb cites the work of Kahneman and Tversky (see para 3 in my review of Taleb’s book) as evidence. In the book itself, he gives several examples of how most peoples’ emotions respond only to immediate concretes and ignore abstract concepts like risk and expectation. I find it difficult to believe that a person with a basic training in probability would be fooled by any of his examples.
    The most credible example is of an investor whose investments are expected to achieve a high rate of return over a long period (say an year) with a high confidence level. Because of the noise in the market prices, however there is a lot of fluctuation in short time scales (say of the order of a minute). If the investor monitors his portfolio on a live basis (say, with a live market feed), he cannot help being pleased every time the value of his portfolio rises and sufferring anxiety every time it falls, even though he should know that in a short time scale, the values are almost 100% noise.

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