If you’re interested in poplar economics, you’ve very familiar with Taleb by now. This, and its sequel Black Swan are required reading for the economically literate.
Fooled by Randomness is both a very interesting book, and a not very well written one. It is constructed in an almost random (ha!) manner, leaping from one subject to another and never landing on any of its many ideas for very long. The basic concept of the book (and of Taleb’s work in general) can be laid out in a single sentence –
We underestimate the role of chance in our lives.
His explanation for why we underestimate it, and how that under-estimation affects our lives is what makes up the majority of the book. It’s a pretty fun (if disjointed) ride.
Taleb made his mark originally as a trader, and that is where many of his examples of the power of randomness come from. He uses finance to explain a survivor bias* and that we post-hoc create narratives to explain our success and failures, when really it was just blind luck that got us into the position.**
Since I read this, I have found myself thinking about my own life as well as markets and history in a different way. It isn’t like the concept of the importance of randomness is all that new or complex, but spending a couple of days thinking it all through with Taleb definitely brought it to the front of my mind. It’s worth remembering that there is much in our lives we do not control.
*Meaning that we think if we want to get rich we should become entrepreneurs, because we only see the successful entrepreneurs, when in reality, if we want the best odds of getting rich, we should become dentists.
** I should have seen the bubble burst in the housing market and limited my position! It is so clear now! Etc, etc. (yes, yes I know everyone knew the housing marker was going to tank, but no one knew, precisely when)