If you’re fully engaged in the modern world then you’ve probably used statistics to make arguments and push a particular interest (like predicting orders or market conditions, if you work at a consumer product company, for example).
Nassim Nicholas Taleb, in both his book, The Black Swan, and more recently in his essay, THE FOURTH QUADRANT: A MAP OF THE LIMITS OF STATISTICS, argues that the banking industry has used statistics to lose over 1 Trillion dollars thus far (more than the industry has ever made)!
Prima facie, the argument seems convincing, but go ahead and read the essay critically and let me know what you think.
Here’s some content from the essay:
Statistical and applied probabilistic knowledge is the core of knowledge; statistics is what tells you if something is true, false, or merely anecdotal; it is the “logic of science”; it is the instrument of risk-taking; it is the applied tools of epistemology; you can’t be a modern intellectual and not think probabilistically–but… let’s not be suckers. The problem is much more complicated than it seems to the casual, mechanistic user who picked it up in graduate school. Statistics can fool you. In fact it is fooling your government right now. It can even bankrupt the system (let’s face it: use of probabilistic methods for the estimation of risks did just blow up the banking system).
Good post mate!! Keep ’em flowing!
Good post mate!! Keep ’em flowing!