Welcome to The Nonlinear Library, where we use Text-to-Speech software to convert the best writing from the Rationalist and EA communities into audio. This is: Book review: On the Edge, published by PeterMcCluskey on August 31, 2024 on LessWrong.
Book review: On the Edge: The Art of Risking Everything, by Nate Silver.
Nate Silver's latest work straddles the line between journalistic inquiry and subject matter expertise.
"On the Edge" offers a valuable lens through which to understand analytical risk-takers.
The River versus The Village
Silver divides the interesting parts of the world into two tribes.
On his side, we have "The River" - a collection of eccentrics typified by Silicon Valley entrepreneurs and professional gamblers, who tend to be analytical, abstract, decoupling, competitive, critical, independent-minded (contrarian), and risk-tolerant.
On the other, "The Village" - the east coast progressive establishment, including politicians, journalists, and the more politicized corners of academia.
Like most tribal divides, there's some arbitrariness to how some unrelated beliefs end up getting correlated. So I don't recommend trying to find a more rigorous explanation of the tribes than what I've described here.
Here are two anecdotes that Silver offers to illustrate the divide:
In the lead-up to the 2016 US election, Silver gave Trump a 29% chance of winning, while prediction markets hovered around 17%, and many pundits went even lower. When Trump won, the Village turned on Silver for his "bad" forecast. Meanwhile, the River thanked him for helping them profit by betting against those who underestimated Trump's chances.
Wesley had to be bluffing 25 percent of the time to make Dwan's call correct; his read on Wesley's mindset was tentative, but maybe that was enough to get him from 20 percent to 24. ... maybe Wesley's physical mannerisms - like how he put his chips in quickly ... got Dwan from 24 percent to 29. ... If this kind of thought process seems alien to you - well, sorry, but your application to the River has been declined.
Silver is concerned about increasingly polarized attitudes toward risk:
you have Musk at one extreme and people who haven't left their apartment since COVID at the other one. The Village and the River are growing farther apart.
13 Habits of Highly Successful Risk-Takers
The book lists 13 habits associated with the River. I hoped these would improve on Tetlock's ten commandments for superforecasters. Some of Silver's habits fill that role of better forecasting advice, while others function more as litmus tests for River membership. Silver understands the psychological challenges better than Tetlock does. Here are a few:
Strategic Empathy:
But I'm not talking about coming across an injured puppy and having it tug at your heartstrings. Instead, I'm speaking about adversarial situations like poker - or war.
I.e. accurately modeling what's going on in an opponent's mind.
Strategic empathy isn't how I'd phrase what I'm doing on the stock market, where I'm rarely able to identify who I'm trading against. But it's fairly easy to generalize Silver's advice so that it does coincide with an important habit of mine: always wonder why a competent person would take the other side of a trade that I'm making.
This attitude represents an important feature of the River: people in this tribe aim to respect our adversaries, often because we've sought out fields where we can't win using other approaches.
This may not be the ideal form of empathy, but it's pretty effective at preventing Riverians from treating others as less than human. The Village may aim to generate more love than does the River, but it also generates more hate (e.g. of people who use the wrong pronouns).
Abhor mediocrity: take a raise-or-fold attitude toward life.
I should push myself a bit in this direction. But I feel that erring on the side of caution (being a nit in poker parlance) is preferable to becoming the next Sam Bankman-Fried.
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