Nassim Taleb on Why Being Nonsucker is More Important Than Being Right

Nassim Nicholas Taleb


In real life… exposure is more important than knowledge; decision effects supersede logic. – Nassim Taleb

One of the most useful and applicable distinctions I came accross reading Nassim Taleb’s book Antifragile: Things That Gain from Disorder is the one he makes between a sucker and nonsucker.

Taleb develops sucker-nonsucker distinction as a more potent way to understand what life and decision making are all about. Here is his best explanation of the idea:

For Tony, the distinction in life isn’t True or False, but rather sucker or nonsucker. Things are always simpler with him. In real life, as we saw with the ideas of Seneca and the bets of Thales, exposure is more important than knowledge; decision effects supersede logic. Textbook “knowledge” misses a dimension, the hidden asymmetry of benefits—just like the notion of average. The need to focus on the payoff from your actions instead of studying the structure of the world (or understanding the “True” and the “False”) has been largely missed in intellectual history. Horribly missed. The payoff, what happens to you (the benefits or harm from it), is always the most important thing, not the event itself.

Philosophers talk about truth and falsehood. People in life talk about payoff, exposure, and consequences (risks and rewards), hence fragility and antifragility. And sometimes philosophers and thinkers and those who study conflate Truth with risks and rewards.

The Green Lumber Fallacy

One of the paths to suckerdom is to believe in complicated methods that will help you understand what is true and what is false. On the contrary, for the nonsucker, the payoff is what matters more than understanding the truth.

Here Taleb comes up with the what he calls the Green Lumber Fallacy:

So let us call the green lumber fallacy the situation in which one mistakes a source of necessary knowledge—the greenness of lumber—for another, less visible from the outside, less tractable, less narratable.

Originally, the green lumber fallacy is a story about a fellow named Joe Siegel.

… a fellow named Joe Siegel, one of the most successful traders in a commodity called “green lumber,” actually thought that it was lumber painted green (rather than freshly cut lumber, called green because it had not been dried). And he made it his profession to trade the stuff! Meanwhile the narrator [the author of the story about Joe] was into grand intellectual theories and narratives of what caused the price of commodities to move, and went bust.

It is not just that the successful expert on lumber was ignorant of central matters like the designation “green.” He also knew things about lumber that nonexperts think are unimportant. People we call ignorant might not be ignorant.

The fact is that predicting the order flow in lumber and the usual narrative had little to do with the details one would assume from the outside are important. People who do things in the field are not subjected to a set exam; they are selected in the most non-narrative manner—nice arguments don’t make much difference. Evolution does not rely on narratives, humans do. Evolution does not need a word for the color blue.

The Importance of Optionality

The key mechanism of enforcing the distinction between sucker and nonsucker is simply a reality, or a simple exposure to options and their payoffs.

If you “have optionality,” you don’t have much need for what is commonly called intelligence, knowledge, insight, skills, and these complicated things that take place in our brain cells. For you don’t have to be right that often. All you need is the wisdom to not do unintelligent things to hurt yourself (some acts of omission) and recognize favorable outcomes when they occur. (The key is that your assessment doesn’t need to be made beforehand, only after the outcome.)

People with too much smoke and complicated tricks and methods in their brains start missing elementary, very elementary things. Persons in the real world can’t afford to miss these things; otherwise they crash the plane. Unlike researchers, they were selected for survival, not complications. So I saw the less is more in action: the more studies, the less obvious elementary but fundamental things become; activity, on the other hand, strips things to their simplest possible model.

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