This article is an excerpt from the Shortform summary of "The Black Swan" by Nassim Taleb. Shortform has the world's best summaries of books you should be reading.
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What is an example of a weak inductive argument? Why are so many inductive arguments weak?
We’ll cover some famously weak inductive arguments and explore two ways to be a better, more logical thinker.
Weak Inductive Arguments: Don’t Be a Turkey
Picture a turkey cared for by humans. It has been fed every day for its entire life by the same humans, and so it has come to believe the world works in a certain, predictable, and advantageous way. And it does…until the day before Thanksgiving.
This is a weak inductive argument. Made famous by British philosopher Bertrand Russell (though, in his telling, the unlucky bird was a chicken), this story illustrates the problem with inductive reasoning (the derivation of general rules from specific instances). With certain phenomena—marketing strategy, stock prices, record sales—a pattern in the past is no guarantee of a pattern in the future.
In Taleb’s words, the turkey was a sucker—it had full faith that the events of the past accurately indicated the future. Instead, it was hit with a Black Swan, an event that completely upends the pattern of the past. This is the problem with weak inductive arguments. (It’s worth noting that the problem of inductive reasoning is the problem of Black Swans: Black Swans are possible because we lend too much weight to past experience.)
Another weak inductive argument example, this time from the world of finance, concerns the hedge fund Amaranth (ironically named after a flower that’s “immortal”), which incurred one of the steepest losses in trading history: $7 billion in less than a week. Just days before the company went into tailspin, Amaranth had reminded its investors that the firm employed twelve risk managers to keep losses to a minimum. The problem was that these risk managers—or suckers—based their models on the market’s past performance.
In order not to be suckers and make weak inductive arguments, we must (1) cultivate an “empirical skepticism”—that is, a skepticism steeped in fact and observation—and (2) remain vigilant against the innately human tendencies that leave us vulnerable to Black Swans.
The problem of induction illustrated by the turkey story has been noted by many well-known philosophers, including the great skeptic David Hume. But induction’s shortcomings were noted even in antiquity.
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Here's what you'll find in our full Black Swan summary :
- Why world-changing events are unpredictable, and how to deal with them
- Why you can't trust experts, especially the confident ones
- The best investment strategy to take advantage of black swants
