Guest Post: Malcolm Gladwell Replies to Taleb

Posted on by

Submitted by Thomas Forest

Outliers: The Story of Success
Malcolm Gladwell, Little Brown and Company, (2008)

Have you read Fooled by Randomness by Nassim Taleb? Malcolm Gladwell has, “(Fooled by Randomness) is to conventional Wall Street wisdom approximately what Martin Luther’s ninety-five theses were to the Catholic Church.” And Taleb has been reading Gladwell. For example in the notes on Chapter 10 Taleb makes reference to The Tipping Point and to Gladwell’s 1996 essay discussing the non-linear physical properties of ketchup, “Tomato ketchup in a bottle- None will come and then the lot’ll.” (Incidentally, Malcolm Gladwell is something of an authority on packaged tomato products. His description of the evolution of grocery store spaghetti sauce on YouTube is not to be missed.) Strangely the connections between the authors’ work extends even to their dust jackets. At least from my uninformed perspective Christopher Sergio seems to have completely ripped off Allison Warner’s jacket design, or maybe it’s the other way around.

In Chapter 10 of Fooled by Randomness, Loser Takes All- On the Nonlinearities of Life, Taleb asks the question, “While it is hard to deny that (Microsoft’s Bill) Gates is a man of high personal standards, work ethics, and above average intelligence, is he the best? Does he deserve it? Clearly not… Most of Gate’s rivals have an obsessive jealousy of his success. They are maddened by the fact that he managed to win so big while many of them are struggling to make their companies survive.” Right. Haven’t you asked yourself this question? Come on, what gives with Bill Gates? Why is he such an outlier? Is it just Talebian randomness? In Outliers: The Story of Success Malcolm Gladwell takes up this specific question, as well as the general version. Why are some people such enormous winners? Is it something intrinsic to them or is there something more? Gladwell asks (he really does ask) why have you never heard of Chris Langan? What, apart from fabulous wealth, did Rockefeller, Carnegie, Weyerhaeuser, Gould, Field, Morgan, Pullman, and Armour share? What is the most important non-athletic characteristic of professional Canadian hockey players? Why were 19th century Appalachians so fantastically quarrelsome? Why are these people outliers? What is going on?

The answer from Fooled by Randomness is grim, except perhaps for those readers who were clinically depressed before they picked it up. We are Chance the Gardener careening through life around open manholes with speeding taxis missing our knees by inches… until we are crushed in our living rooms while cautiously assembling a flat-packed bookcase from IKEA according to the manufacturer’s detailed instructions. Our lives ebb and flow according to some hideous Pareto distribution, and it is just as well only a few depressed people understand the mathematics. We should all hunker down with a copy of Seneca’s Letters from a Stoic.

In contrast, Outliers succeeds, in Gladwell’s typical narrative salad style, as a balm on the psyche of the constitutional optimist. Have you seen that black and white image of the two faces in profile that suddenly turns into a cup, and then back into two faces, and then you realize you can make your brain look at it either way? Gladwell does something similar, but different. When I was young and unencumbered by material things I lived by the tracks. One morning a train was parked on them loaded with large brightly colored metallic objects. I stood staring at the train trying to make sense of the apparently random pattern of lines formed by the intersection of the silhouettes of the train cars and their cargo. I stood there longer than I like to admit. And then all the lines miraculously resolved themselves into a train loaded with automobiles. The point here being that unlike the faces and the cup image, once I saw that the train was loaded with automobiles the random pattern of silhouettes was irrevocably ordered, crystalized. In similar fashion, in Outliers Gladwell displays his talent for putting together crystalizing explanations. He looks at life from a weird perspective and then points out the order in the randomness, thereby irrevocably reordering our understanding of reality.

Gladwell’s explanation of the quarrelsome nature of Appalachians is a good example of his ability to crystalize the logic behind a puzzle. My mother’s people are multigenerational Appalachians, and the family history was always been inexplicable to me. When I was eight years old, I asked my grandfather why he decided to enlist to fight in World War II. He told me that he had gotten into a scrape with a man (a “feller” as my grandfather told it) and that man’s brothers were out hunting around the neighborhood to kill him. However, my grandfather was able to sneak past the brothers and got home, where his mother hid him in the barn under some burlap sacks. Rising early the next morning, his mother had him lie down on the floor of the back seat of the car and then drove him to Bristol to the Army recruiter’s office. “Ah,” you are thinking, “one of Grandpa’s tedious stories.” But not in this instance, rather this story is a typical fragment of a family history composed of dozens of similar episodes. From my youth I have been puzzled by why these people were so touchy and violent, but as Gladwell shows, the explanation for their chaotic history is not something in the water or a genetic defect. In Outliers he irrevocably reordered my understanding of their behavior.

Must our hands shake as we tear open the box from IKEA? Are we really stuck with a Pareto distribution? Taleb tells us they should and we are, but Gladwell replies by reaching out to offer hope. He does not dispute Taleb’s point that we are ruled by non-linear distributions, but shows us that we need not always be fooled by them. What, after all, gives with Bill Gates? Gladwell shows that he exists at the intersection of the extreme ends of two non-linear distributions. As Taleb notes, you are more likely to win the PowerBall Lottery three times than you are to find yourself in similar circumstances, but if you read Outliers you’ll at least understand the Story of Bill Gates’ Success, and maybe if you are as lucky as me, you may even understand why your relatives are so crazy.

Print Friendly
Tweet about this on Twitter0Digg thisShare on Reddit0Share on StumbleUpon83Share on Facebook0Share on LinkedIn0Share on Google+0Buffer this pageEmail this to someone

12 comments

  1. Andrea Murrhteyn

    Black Swan psychology…. hmmm yeah… the desperation of confronting the meaninglessness of life.. with simple explanations to splain concepts like 'success' never even seriously examined.

    Funny I never considered Bill Gates a 'success'; cause money is not for the the determination of whether someone is 'successful'.

    If you asked me, based upon my definition of 'success', who the most successful man in America was, based upon his own goals of what he wanted to achieve, for himself — absolutely total freedom; it would be Brad Blanton.

    And in my view 200 years from now, if you mention the names Brad Blanton and Bill Gates in a sentence; your listener, may say, whose Bill Gates?

    Brad Blanton, is Talep's moral, psychological and 'intentional' (as in The Hidden Messages in Water 'Intent) Black Swan!!

    Anyway… right now Talep is 'cool' and if anything the mindless herd loves 'cool'….

    Lara

  2. Jim

    Gladwell writes a good story, but sometimes his research seems to be a little too much in service of the story. For example, in 'Tipping Point', there's a piece about a guy who supposed infected a hundred women and girls in Baltimore with HIV. Based on most of what I've read about HIV transmissibility, this isn't possible. There must be an alternative explanation. However, that wouldn't serve the story.

  3. Dan Duncan

    If you want to link Taleb and Gladwell…instead of outliers, you might consider their respective treatment of The Narrative Fallacy.

    Taleb engages in the narrative fallacy in explaining the narrative fallacy…while Gladwell goes straight into the mode of a bad Nike commercial in announcing: "I am Narrative Fallacy".

    Before looking at Gladwell's analysis of Appalachians (code for Southern Whites), let's consider Gladwells linear analysis of Asians and math:

    Why do Asians excel at math?

    Rice farming.

    A direct quote from Mr. Amtrak steaming his narrative locomotive from Point A to Point B:

    "Rice farming lays out a cultural pattern that works beautifully when it comes to math…Rice farming is the most labor-intensive form of agriculture known to man. It is also the most cognitively demanding form of agriculture…There is a direct correlation between effort and reward. You get exactly out of your rice paddy what you put into it."

    Wow.

    What about Thais and Philippinos? They grow rice. A lot of it. Did the Fun with Numbers Gene pass them by?

    What about the regions in Asia where they've never grown much rice? [Asia is hardly one giant rice -paddy.] Are they mere finger counters?

    So, what's next…are Chinese great dry cleaners because there's an exceptionally arid region in central Guangzhou?

    Lawrence Summers, the noted "expert" on the subject of Women and Math, thinks this is turgid.

    And now, let's consider those in-bred rednecks from Appalachia.

    [We will, of course, have to look over the fact that Gladwell never visited the city in Kentucky that he wrote about…nor does he cite a single crime statistic. But he does mention a couple of books written in the 1940s and 1960s!]

    OK, back to the human embodiment of Plato's perfect and singular straight line….

    Gladwell claims that Appalachian whites are violent because…[drumroll please]… they come from Scotch-Irish "cultures of honor”.

    If..and it's a BIG IF…we take it as a given that Appalachians are in fact more violent (even though no violence metric was given)…Gladwell does not attribute this to the legacy of the Civil War. The punitive effects of Reconstruction. The fact that the Appalachians are remote and "off the beaten path"…all of which has culminated in one of the most clanish, isolated regions of the US. No…this violent culture stems from the fact these guys are big into Scotch Irish Sword and Shield Societies.

    I'm not sure where you are off to these next two weeks, Yves…but unless you're on a sojourn with Burt Reynolds— DO NOT go to Glasgow or Dublin! They don't cotton much to outsiders. "You ain't from 'round here 'r ya?"

    Go to any local Scotland pub and what does Gladwell say you will find?

    A 12 fingered Scotsman playing the tune from Deliverance on his bag pipes…while the others pass the time by simultaneously guzzling Bud by the pint, chewing tobacca…and watching the White Euro-Trash version of NASCAR.

  4. thelogicgirl

    There are less known folks who know about markets far more that Taleb, his enemies, friends, and followers/etc combined.

    Take this single blogger who has been trashing the market with his calls. For instance, he called the bottom of March 6 hours before it took place on that Friday. It is here:

    http://financialtraders.blogspot.com/2009/03/dow-spy-stock-market-bottom-march-6.html

    He just sent another call to a list of his insider followers. Hope he does not reveal it!

  5. Minh

    @Dan Duncan,
    Not only rice farming, but also rice eating without much meat, which is consider less pure in many religious tradition… (no pork, no red meat etc) These foods may affect clear thinking which is required by mathematical reasonning. But that was mostly because of economy of meat, 1 kg of red meat requires 10 kg of rice to produce.

    While it is hard to deny that (Microsoft’s Bill) Gates is a man of high personal standards, work ethics, and above average intelligence, is he the best? Does he deserve it? Clearly not… Most of Gate’s rivals have an obsessive jealousy of his success. They are maddened by the fact that he managed to win so big while many of them are struggling to make their companies survive.”

    He deserves it. Like the US deserves to be the leader in the world of science and technology, it just happen that way during the last 40 years. The key to Bill Gates success is his common sense, and a real clear vision of what the PC revolution can do for the education of the people he intents to serve, that isn't measured by standard IQ test when math and linguistic ability are keys.

    IQ test results is for workers, not for leaders.

    As to normal distribution, I don't think people are born equal, thus you can't compare social interactions like the casting of a dice on a plate. The world is beautiful or sometimes ugly because of this inequality of the human soul structure. You may read a book call FUNCTIONAL REINCARNATION (Tu Vi Ham So) by Nguyen Phat Loc published in Saigon in 1973. No one has yet tried to translate that from Vietnamese to English.

    But under a democracy, one man one vote, so may be we're equal after all ?

  6. jmk

    i once asked taleb at a conference if he thought we'd be passing thru a time-period of low/negative investment returns why didn't he simply offer to return his investors their money and thus forego the management fee?

    the mediocrity of his response (oh 'we don't get paid to return investors' money') summed up what i think about superficial observations on market events that the collective masses have been too uncreative to consider..

  7. tz

    I did the audiobook version of outliers last week (I need to do tipping point).

    It is now one of my canon of books which you need to read (mainly for libertarians).

    I don't agree fully, but his point about Gates is important. His success was part his talents and virtues, but also a lot of good fortune and randomness.

    To get those to read this, it starts out asking why most of the top canadian high school hockey players are born in the first three months of the year. The answer is very simple.

    A hint – personally I was very good in school, so was double-promoted early, and ended up not being very good at much in phys ed, though I put forth some effort. Not much, I preferred books, but enough to pass.

    One objection: I think he doesn't quite eat every course of his cooking, he discusses mathematical differences and notes other places have equal or more women sent to contests. But how were those sent to contests selected? One of my colleagues also pointed out that the foreign engineers and scientists we see here are part of the top 1% in their countries (and in a country of a billion people, this can be a very large number). It can be very difficult to pick out root causes and side selective factors.

    (I also did "panic in level 4" on the same roadtrip with "the mountains of pi" which was also about mathematics – I can recommend this too).

  8. jason

    both fooled by randomness and outliers are expositions on pasteur's addage "luck favors the prepared" (taleb dealing with the luck part and gladwell the prepared). gladwell seeks the narrative "whys" (which may or may not be true) while taleb is focused more on the idea that the "whys" will be attributed after the fact and the lessons learned are generally too specific to benefit from (except as one may benefit from a fable). if one should believe that writers of fables and semi-philosophical inquiries are "tedious gasbags" then i would have to agree with ballyfager's comment. but i don't.

    as far as optimism goes, i do not find gladwell's thesis to be terribly positive despite his skewed outlook…that linguistic path dependence can negatively affect the ease a person can comprehend numbers leading to a cumulative disadvantage by raising the mental cost of learning the basics–counting from one to ten takes about twice as long in english versus chinese and the numbers in the teens do not follow a logical pattern–i find particularly unsettling. indeed, gladwell's argument may be simplistic, but that is probably because the simple ideas are often overlooked. culture (of which language and work ethic and government systems are a part) can arbitrarily create advantages or obstacles exacerbating the nonlinear outcomes. as warren buffett has admitted, he is a nobody if born a hundred years earlier or in a socialist regime or a meritocracy where capital allocation is not rewarded.

    in the right circumstances of luck and skill in our increasingly winner-take-all world, a few will be chosen from the set of the prepared in the right place at the right time. and more than a few will be 'dischosen'–for reasons to be ascribed after the fact.

  9. M_Biz

    This post is not worthy of this Blog.

    Clinging to Gladwell shows a total lack of understanding of Taleb. Summing up Taleb as "everything is random" is superficial and irrepsonsible.

  10. dogeatery

    @ minh: Bill Gates got where he is by manipulating markets and forcing his product onto the public. Why do you think I can't buy a Gateway computer without Windows installed (even if I asked for it)? He deserves little or none of your praise for innovation — IIRC, he said the Internet wasn't going to be any kind of big deal. Meanwhile, his company's products are flawed and cause as many problems as they solve. Which is to say, he's a smart guy who knows how to force his way through

Comments are closed.