#613: Russ Roberts on Lessons from F.A. Hayek and Nassim Taleb, Decision-Making Insights from Charles Darwin, The Dangers of Scientism, Wild Problems in Life and the Decisions That Define Us, Learnings from the Talmud, The Role of Prayer, and The Journey to Transcendence

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Aug 5, 2022

Russ Roberts, President of Shalem College, shares his insights on complex ideas in economics and decision-making. He discusses F.A. Hayek's critiques of scientism and the unpredictability of economic predictions. With a nod to Charles Darwin, he reflects on the emotional intricacies behind rational decision-making. The conversation touches on personal growth, the journey of navigating significant life choices, and the philosophical dance between economics and spirituality. Roberts emphasizes the importance of genuine connections and the transformative journey of marriage.

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ANECDOTE

Russ Roberts' Father's Priorities

Russ Roberts' father prioritized spending time with family over pursuing personal ambitions like writing.
He entertained his grandchildren with original stories, showcasing a unique talent for storytelling.

INSIGHT

Quantity Time and Quality Time

Meaningful relationships require quantity time as well as quality time, just as a good friendship takes years to develop.
This applies to family, friends, and any close relationships where shared experiences build a strong foundation.

INSIGHT

Hayek on Scientism

F.A. Hayek warned against scientism, the illusion of scientific understanding where we mistake superficial analysis for true knowledge.
Two types of ignorance exist: things we don't know and things we think we know that are false, with the latter being more dangerous.

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Wild Problems

A Guide to the Decisions That Define Us

Russ Roberts

In 'Wild Problems,' Russ Roberts addresses the big, uncertain decisions in life—such as who to marry, whether to have children, where to move, and how to forge a life well-lived—that cannot be solved using data, science, or traditional rational approaches. He suggests focusing less on the path that promises the most happiness and more on figuring out who you actually want to be. Roberts draws on the experiences of great artists, writers, and scientists to lay out strategies for reducing fear and the loss of control when facing these 'wild problems.' He argues that life should be experienced as a mystery rather than a problem to be solved, and he critiques the idea of relying solely on cost-benefit analysis and utilitarianism for making life's major decisions.

Fooled by randomness

the hidden role of chance in life and in the markets

Nassim Nicholas Taleb

In 'Fooled by Randomness', Nassim Nicholas Taleb discusses the pervasive influence of chance and randomness in our lives and financial markets. The book argues that humans tend to underestimate the role of luck and overestimate the role of skill, leading to biases such as hindsight bias, survivorship bias, and the narrative fallacy. Taleb emphasizes the importance of recognizing and coping with uncertainty, and he critiques the tendency to seek deterministic explanations for random events. The book is part of Taleb's Incerto series, which also includes 'The Black Swan', 'The Bed of Procrustes', 'Antifragile', and 'Skin in the Game'.

The Fatal Conceit

The Errors of Socialism

Friedrich Hayek

William Warren Bartley

In 'The Fatal Conceit,' Friedrich Hayek refutes socialism by highlighting the limitations of human reason in designing complex societal systems. He argues that societal order and efficiency emerge from spontaneous processes and the voluntary actions of individuals within a framework of established rules, rather than from top-down planning. Hayek emphasizes the importance of respecting and understanding the spontaneous and extended order of human cooperation, and he advocates for a humble recognition of the limits of human knowledge and the wisdom embedded in evolved social traditions and market processes. The book also critiques the concept of social justice in socialist ideologies, arguing that true social justice should be understood in terms of equality of opportunities rather than equality of outcomes.

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Sir Michael Howard

The Black Swan

The Impact of the Highly Improbable

Nassim Nicholas Taleb

David Chandler

Nassim Taleb

The Black Swan is a landmark book by Nassim Nicholas Taleb that investigates the phenomenon of highly improbable events with massive impacts. These events, termed Black Swans, are unpredictable, have a significant impact, and are rationalized after the fact to appear less random. Taleb argues that humans are hardwired to focus on specifics rather than generalities, leading to a failure to consider what we don’t know. The book delves into cognitive biases, the limitations of mathematical models, and the importance of robustness and antifragility in navigating a world filled with uncertainty. The second edition includes a new essay, 'On Robustness and Fragility,' offering tools to navigate and exploit a Black Swan world.

Antifragile

Things That Gain from Disorder

Nassim Nicholas Taleb

Albino Santos Mosquera

Genís Sánchez Barberán

In 'Antifragile', Nassim Nicholas Taleb delves into the concept of antifragility, arguing that some systems not only withstand stress and disorder but actually benefit from them. The book builds on ideas from his previous works, such as 'Fooled by Randomness' and 'The Black Swan', and is part of his five-volume philosophical treatise on uncertainty, 'Incerto'. Taleb provides examples from various fields, including science, economics, and history, to illustrate how antifragility can be achieved and how it contrasts with fragility and robustness. He also discusses strategies like the barbell strategy and optionality, and critiques modern society's attempts to eliminate volatility, which he believes are harmful. The book is praised for its revolutionary ideas and multidisciplinary approach, though it has also received criticism for its style and some of the author's views on mental health and other topics.