Niall Ferguson in one of last year’s Conversations with Tyler:
The epistemic problem, as I see it is — Ian Morris wrote this in one of his recent books— which is the scenario? Extinction-level events or the singularity? That seems a tremendously widely divergent set of scenarios to choose from. I sense that — perhaps this is just the historian’s instinct — that each of these scenarios is, in fact, a very low probability indeed, and that we should spend more time thinking about the more likely scenarios that lie between them.
This is bananas thinking! Probability space replacing the river in this well-known Talebism. If the probability space is 4 feet deep on average you don’t just wade into it as if every part is just 4 feet. You need to know the variance, and from Ferguson’s own telling it goes from unlimited upside to complete ruin.
Worse yet: Ferguson is confusing improbable with the impossible. And also hasn’t heard of ergodicity, again courtesy of Taleb. Given a long enough time span, an extremely low-frequency event is a near-certainty. If you don’t believe me, how about a game of Russian roulette?
Is it because Ferguson is a historian? Everything he encounters professionally would have ex post likelihood of 100% so probability theory may not be his area of strength. Don’t ask a historian for predictions, I guess.