http://www.edge.org/3rd_culture/taleb08/taleb08_index.html

Nassim Nicholas Taleb writes about the nature of the financial system with a framework similar to the viewpoint I developed while reading about Godel and the philosophy of science a couple years ago. Basically, he says that while logic, science, and statistics tell us many interesting things, it is possible to get a clear perspective on what they don't tell us. Specifically relevant recently, he says that the economists, econometricians, and quants on wall-street have not been paying attention to what they don't know (i.e. Black Swan events, as detailed in his book by that name.)

Much more interesting to me, though, is that he defines the areas where statistics and economic theories correspond with experience as in academia, laboratories, and games:

"First Quadrant: Simple binary decisions, in Mediocristan: Statistics does wonders. These situations are, unfortunately, more common in academia, laboratories, and games than real life—what I call the "ludic fallacy". In other words, these are the situations in casinos, games, dice, and we tend to study them because we are successful in modeling them."

I've been thinking a lot recently about why I don't like poker - I could be good at it if I practiced the statistics and the game theory, but I just don't like sitting around a table thinking deeply about the recursive motivations of "logical" people. Last week I surmised that I'm more interested in those type of people who don't stick to logic, but Taleb gives me a broader way to restate this: I'm more interested in the 99% of reality that takes place outside of groups of humans interacting with each other.

But to tell the truth it's getting kind of lonely out here in reality and I'm daily more convinced I should spend more time learning politics.