Time to Write My Negative Review of Nate Silver's New Book "On the Edge"!

But I fail to do so. So here is a core dump of my brain on the subject. For me at least, Nate Silver's gambit to draw direct connections between formal games of chance and large-stakes human...

But I fail to do so. So here is a core dump of my brain on the subject. For me at least, Nate Silver's gambit to draw direct connections between formal games of chance and large-stakes human gambles in the world fails to illuminate much…

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I was going to write a rather negative review of Nate Silver’s brand-new book On the Edge: The Art of Risking Everything. But I have failed. And I am out of time to spend on this.

So I am going to do what David Romer used to warn our students never to do on an exam: I am going to dump core. (Mind you, David Romer used to give students this advice when said students had been at most four years old the last time a computer crashed and the catch-catcher routine thought it would be helpful to then push the entire contents of main memory across a wire at a 300-baud connection and print the whole thing on a teletypewriter.)

So here is my core dump. There are, I think, some very good things in here. But it is not a review. Or even a book reading-launched essay. It is, instead… whatever it is…

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Nate Silver Is an Enormous Public Benefactor:

First and most important, Nate Silver is and will always be an enormous public benefactor, if only for having stunningly successfully called bullshit on a deeply broken and mendacious political polling and forecasting industry, and then done something about it. I say this, I say this again. And I say this yet again. And again. Most recently:

Journamalism: Dan Drezner is very smart and very reliable. He writes:

Dan Drezner: What if October is... Boring?: ‘It's been a fat-tailed presidential election so far…. An awful lot of Big Events…. Maybe—just maybe—it’s time… to take a breath…. Look at that FiveThirtyEight chart. Even with all of the shocks of August and September, there wasn’t a lot of movement in either direction… <danieldrezner.substack.com/p/what-if-oc…>

Now do not get me wrong. The election is almost certainly not close. If we knew everything about the state of the electorate right now, we would almost surely judge the probabilities as putting it 80% in the bag. But we do not know everything, and in particular we do not know where the systematic polling error lies, and how large it is. But Dan is right. From our ignorant perspective, it is very close to a tossup, and will probably stay that way down to close to the wire. Nate Silver and Eli McKown-Dawson right now have it thus:

Nate Silver & Eli McKown-Dawson: Silver Bulletin 2024 Presidential Election Forecast: ‘1:30 p.m., Friday, October 4. Another day… still very little change…. Harris… has a 56 percent chance of winning the election to Trump’s 44 percent chance… [with] a 21 percent chance Harris wins the popular vote but loses the Electoral College… <natesilver.net/p/nate-silver-2024-presi…>

That is all the time you need to spend on the polls. Maybe come back and revisit <natesilver.net/p/nate-silver-2024-presi…> for five minutes in two weeks, or one week if you have anxiety disorder. Otherwise go do other, productive things… <https://substack.com/@delongonsubstack/note/c-71420718>

Plus:

Two Cheers for Nate Silver & Co.: Polls, Predictions, & the Persistent Problem of Political Noise: ‘Nate Silver in his wheelhouse!… I find him—I still find, as I have long found him—an indispensable guide to keeping a sense of proportion in this election fall… If you follow Nate Silver, you find yourself obsessing about election polls. But you will only obsess about election polls for about four minutes a day. That is what it will take you, reading Silver and McKown-Dawson’s daily “Silver Bulletin Presidential Election Forecast”, to learn that there is, essentially, no news but only olds in the polls…. Telling people that almost all of the time the polls are essentially saying very close to the same thing they said yesterday is a valuable service… <https://braddelong.substack.com/p/two-cheers-for-nate-silver-and-co>

Two Cheers for Nate Silver & Co.: Polls, Predictions, & the Persistent Problem of Political Noise

And, in addition, Nate Silver’s earlier book The Signal and the Noise was, I thought, brilliant. I am forever deeply in his debt for his making me better-informed and wiser across a whole bunch of different dimensions.

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But I—& Some Others—Did Not Much Like His Latest Book, On the Edge:

And yet I did not like Nate Silver’s latest book, On the Edge, much.

Why not?

I think Paul Seabright has the reasons nailed: This, this, this, this, and this!:

Paul Seabright: O Lucky Man!: ‘What poker players do and don’t have in common with plutocrats: Those who hold that their ability to survive to a good age without being eaten by a tiger is down not to their privileged circumstances, but to their remarkable talent for avoiding tigers, suffer from something psychologists call the fundamental attribution error—a category of cognitive bias that attributes the workings of luck to hidden personality traits….

Nate Silver… has written a book arguing not just that some people play better poker than others, but also that they do so because they belong to a special class of people who are, generically, very clever. It’s a very clever book (which would seem to count in favour of his thesis), but also a rather strange one….

On the Edge is really two books…. The first… [of] a little over 200 pages, takes us on a tour of the world of professional gamblers…. This is one of the most gripping accounts I have ever read of a milieu it would bore me rigid to inhabit myself…. Repeated success therefore requires the ability to calculate probabilities accurately, but also the nerve to make large stakes and to absorb potentially heavy losses along the way…. Poker obviously requires acute skills of social perception…. Sports gambling… involves a subtly different set of skills….

There is sense to the claim that successful gamblers in different gambling domains share overlapping inferential talents…. Those who make a living from gambling over long periods are skilled in ways that set them apart from other people… the mindset, lifestyle and other aspects of the personality of those who can reliably assess probabilities to the degree of precision required to outwit each other and the house… more than a whiff of books and films such as The Hustler, The Gambler, Casino, and The Cincinnati Kid.

But things take a stranger turn when Silver starts to write of such people as belonging to a distinct group he terms (for reasons obscure) “the River”, which he calls “a sprawling ecosystem of like-minded people that includes everyone from low-stakes poker pros just trying to grind out a living to crypto kings and venture-capital billionaires”. “Sprawling” seems about right, “like-minded” less so.

What does he mean?

Silver tells us that such people share a “cognitive cluster”… analytical and abstract thinking… proficiency in… “decoupling”… the ability to focus on logic and to block out context… competitive, critical of others, independent-minded (even contrarian) and highly open to risk. Professional gamblers belong… but so do Peter Thiel and Elon Musk, to whom many admiring pages will later be devoted… <https://www.the-tls.co.uk/politics-society/social-cultural-studies/on-the-edge-nate-silver-book-review-paul-seabright>

In addition to Seabright, we also have here a close-to have an ultimate takedown of Nate Silver’s The Edge: The Art of Risking Everything:

David Karpf: ‘Nate is a serious poker player… convinced that poker-thinking explains who has power today, and why. He doesn’t seem to notice that private equity gamblers keep winning b/c they have infinite freerolls. I would strongly recommend reading Dan Davies’s book, The Unaccountability Machine, first. Nate notes that… Americans lost $130 BILLION in casinos, lotteries, and other gambling operations in 2022. He sees this as evidence of (demand-side) increases in risk-taking behavior. But, uh, it’s probably a supply-side phenomenon. We legalized vice. Casinos, DraftKings, etc. And then we encouraged them to market the hell out of vice…. It’s good for the top gamblers, for the same reason retail investors are good for Wall Street…. The middle of the book is just the cringiest bullshit: “13 habits of highly successful risk-takers.” Silver, the statistical wunderkind, picks five big winners and generalizes that their good habits must make them successful. (…I guess successful risk-takers select on the dependent variable!)…<bsky.app/profile/davekarpf.bsky.social/…>

I, like Seabright and Karpf, was also taken aback by the second half of On the Edge.

I was taken aback by Nate Silver’s writing:

The River also has a canon of influences and ideas, from game theory and Nash equilibria to expected value and marginal utility, that underlie almost all of the activities it undertakes…

without any mention or note that all these ideas are a small (but very important!) slice of the core conceptual foundations of a discipline called “economics”, and without apparent knowledge that we have many more tools as well that are very useful for understanding finance, insurance, production, distribution, and allocation.

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Silicon-Valley Start-Ups & Wall-Street Risk-Management Are Not Zero-Sum Games:

And I was taken further aback by Silver’s claim that:

blackjack and slots and horse racing and lotteries and poker and sports betting… are fundamentally not that different from trading stock options or crypto tokens, or investing in new tech startups…

Investing in new tech startups is—or is supposed to be—a positive-sum activity in which people coöperate to make something useful and, hopefully, great. The rest are, when we take account of risk, negative-sum activities: someone loses, and someone wins, and with declining marginal utility of wealth the loser loses more than the winner wins, They are thus, fundamentally, parasitic: the way to win is to find people who do not understand the risks they are running, and fleece them.

There is a common dopamine thrill in doing this well.

But wouldn’t it be wise to focus not on the dopamine thrill but on the usefulness of the underpinning activity—how those getting the dopamine thrills are fitting into the network web that is the coördination of what we want to be a positive sum productive practice of humanity considered as an anthology intelligence?

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There Is a Very Good Book About the Professional Gambler Psyche Trapped Inside On the Edge:

In addition, let me say that I strongly believe that there is a very good little book inside On the Edge waiting to be let out. Plus there is a very good shorter book inside On the Edge whimpering to be let out. Had I been Nate Silver’s editor/publisher, I would have sawn the book down to its first four chapters, the ones on poker and sports betting. I would have put bookend chapters around those four—a new “why poker and sports betting matter as windows into our society” introduction and a “what we learn from them about broader issues of managing risk and dealing with counterparties” conclusion. I would have published it as a short thing to read on airplanes. And then, I think, very good reviews and, hopefully, the money would have rolled in. For the first four chapters truly are, as Paul Seabright writes:

one of the most gripping accounts I have ever read of a milieu… [which] requires the ability to calculate probabilities accurately… nerve… social perception… sports gambling[‘s]… subtly different set of skills…. Those who make a living from gambling over long periods are skilled in ways that set them apart from other people… the mindset, lifestyle and other aspects of the personality of those who can reliably assess probabilities to the degree of precision required to outwit each other and the house…. The Hustler, The Gambler, Casino, and The Cincinnati Kid…

But that is not the book that Nate Silver wrote.

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Not “The River”, But Rather: Gamblers, Speculators, Calculators, Customers, Suckers, & Grifters:

To successfully write the book he actually wrote he really needs not to see one type of human inhabiting the enormous space that he calls “The River”, but he badly needs to distinguish between gamblers, speculators, calculators, customers, suckers, and grifters. And he does not. And so the book, after its first four chapters, collapses into what I can only see as lack of coherence and error.

Briefly:

• Gamblers—people who feel the thrill of watching the dice fly so much that they do not want to or cannot stay away from it, but who are not addicts: they spend enough of their time in games in which they can on average win, or at least lose so little that they can look back on their time at the table as a worthwhile and enjoyable amusement; moreover, they have enough control over their bets that they keep the risk of their going spectacularly bankrupt at a de minimis level.

• Speculators—people who feel the thrill of watching the dice fly that they cannot stay away, and for whom an important part of thrill is betting a large chunk of their bankroll on each cast. Hence almost all of these wind up bankrupt, and out of the game, but there are a few of the supremely lucky who become immensely rich and then, if they are truly lucky, find a large chunk of their wealth ringfenced away from their love of betting it all, double-or-nothing, on the next cast.

• Calculators—people who are in the business of being the House, and gain next to no thrill from watching the dice fly, or at least do not let that thrill affect their decisions on whether, when, and on what to bet at all.

• Customers—people who have some other reason to gamble because they want to lay off some risk they are already bearing as a result of their trying to do their jobs, and thus are people who, like the gamblers, can validly and justifiably look back on their time at the table as something worthwhile.

• Suckers—people who do look back on their time as a table as a shitshow, or who avoid doing so only by engaging in strenuous feats of self-delusion.

• Grifters—people who are in the business (a) of finding suckers, and (b) not of calculating odds, but rather of (c) rigging the game so that analysis and calculation is not the point.

Let me expand on all this: