Postdicting

Postdicting

Words are dangerous: postdictors, who explain things after the fact—because they are in the business of talking—always look smarter than predictors.

Because of the retrospective distortion, people who of course did not see an event coming will remember some thought to the effect that they did, and will manage to convince themselves that they predicted it, before proceeding to convince others. There will be after every event many more postdictors than true predictors, people who had an idea in the shower without taking it to its logical conclusion, and, given that many people take a lot of showers, say, nearly twice a day (if you include the gym or the episode with the mistress), they will have a large repertoire to draw from. They will not remember the numerous bath-generated ideas they had in the past that were either noise, or that contradicted the observed present—but as humans crave self-consistency, they will retain those elements of what they thought in the past that cohere with their perception of the present.

So opinion makers who were so proudly and professionally providing idle babble will eventually appear to win an argument, since they are the ones writing, and suckers who got in trouble from reading them will again look to them for future guidance, and will again get in trouble.

The past is fluid, marred with selection biases and constantly revised memories. It is a central property of suckers that they will never know they were the suckers because that’s how our minds work. (Even so, one is struck with the following fact: the fragilista crisis that started in 2007–2008 had many, many fewer near-predictors than random.)

The asymmetry (antifragility of postdictors): postdictors can cherry-pick and produce instances in which their opinions played out and discard mispredictions into the bowels of history. It is like a free option—to them; we pay for it.

Since they have the option, the fragilistas are personally antifragile: volatility tends to benefit them: the more volatility, the higher the illusion of intelligence.

But evidence of whether one has been a sucker or a nonsucker is easy to ferret out by looking at actual records, actions. Actions are symmetric, do not allow cherry-picking, remove the free option. When you look at the actual history of someone’s activities, instead of what thoughts he will deliver after the facts, things become crystal clear. The option is gone. Reality removes the uncertainty, the imprecision, the vagueness, the self-serving mental biases that make us appear more intelligent. Mistakes are costly, no longer free, but being right brings actual rewards. Of course, there are other checks one can do to assess the b***t component of life: investigate people’s decisions as expressed through their own investments. You would discover that many people who claim to have foreseen the collapse of the financial system had financial companies in their portfolios. Indeed, there was no need to “profit” from events like Tony and Nero to show nonsuckerness: just avoiding being hurt by them would have been sufficient.

I want predictors to have visible scars on their body from prediction errors, not distribute these errors to society.

You cannot sit and moan about the world. You need to come out on top. So Tony was right to insist that Nero take a ritual look at the physical embodiment of the spoils, like a bank account statement—as we said, it had nothing to do with financial value, nor purchasing power, just symbolic value. We saw in Chapter 9 how Julius Caesar needed to incur the cost of having Vercingetorix brought to Rome and paraded. An intangible victory has no value.

Verba volent, words fly. Never have people who talk and don’t do been more visible, and played a larger role, than in modern times. This is the product of modernism and division of tasks.

Recall that I said that America’s strength was risk taking and harboring risk takers (the right kind, the Thalesian king of high-failure, long-optionality type). Sorry, but we have been moving away from this model.