Bryan Caplan and Nassim Nicholas Taleb on What’s Missing in Education (Bonus-Live at Mercatus)
By: Mercatus Center
Tags: Philosophy, Podcast, Liberal Arts, Education, Higher Education

Bryan Caplan and Nassim Nicholas Taleb on What’s Missing in Education (Bonus-Live at Mercatus)

Sure, Nassim Nicholas Taleb will indulge Tyler in a conversation. But what he really wanted was to talk to Bryan Caplan about his latest book on eduction, because Taleb believes Caplan has missed something central in his argument about the wastefulness of formal education.

In this discussion, they cover learning by doing, practice before theory, the merits of knowing facts, technical education versus the liberal arts, whether either of them knows the proper procedure for what to do when your car breaks down on a mountain road in the middle of a snowy night, and more.

Listen to the full audio

Note: This includes the full show audio. Caplan’s segment starts at 51:50

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This transcript has been lightly edited for clarity. If you notice an error, please send us an email.

TYLER COWEN: We now welcome to the stage, Bryan Caplan of our own George Mason University. Bryan and Nassim Nicholas Taleb will converse. I simply will open it up by handing it over to Bryan to start. Bryan?

BRYAN CAPLAN: Thanks a lot. Actually, this whole event started with two tweets by Taleb. The first tweet begins very promisingly: “Excellent argument by Bryan Caplan.”

[laughter]

And then, “But missed something central — convexity of trial-and-error & heuristic learning. I sort of wrote Antifragile using Kealy’s argument & transcending it. Would love a diskushshun/debate @tylercowen.”

When I said I’d be happy to do this and I was willing to go to New York, then Nassim wrote back, second tweet, “I will go to DC if you agree to read Antifragile, including the appendix.”

[laughter]

Per our agreement, I have read Antifragile, including the appendix, and now I can see several possible central things I missed. Since I’ve actually got you here, what specifically did you have in mind?

NASSIM NICHOLAS TALEB: The first thing I wanted to discuss was something I called the “green lumber fallacy.” Let me describe it. There’s a book called What I Learned Losing A Million Dollars, which, in fact, is the only book, I think, that’s not charlatanic within finance, telling you how not to lose money, because it’s much more robust than how to make money.

The fellow who wrote the book was trading in the green lumber, and he knew everything about green lumber, how it was made, the chemistry, the weather pattern, everything. There was that fellow in the pit, an old fellow, who was very rich, who made his money trading the green lumber, called Jeremy Siegel, Joey Siegel, or something like that.

One day the manager who’d lost all his money, that fellow, it was discovered, didn’t know that green lumber was not lumber painted green. It was freshly cut lumber.

[laughter]

The lesson that, from the outside, it’s not that the fellow, Siegel knew nothing about lumber. He knew a lot of stuff, but not the stuff you’re naively inclined to know. That’s the green lumber fallacy. That’s the first thing in Antifragile, I remember dealing because I was a trader, or was . . .

CAPLAN: Is that something I missed?

TALEB: Yeah, because the point is that there are hidden secrets within a profession that can only be discovered within a profession, not outside the profession.

The second one is the convexity argument. In real life, we operate not by top-down knowledge, but by trial and error and try to solve this thought experiment. Thought experiment is if you went and rounded up every single chemist in town, on one hand, and the other part would be to round up every single overweight person you can find who wears a jacket, or is sort of well-dressed.

We have two groups of people, and then you want to engineer the best possible recipe. What’s your favorite dish?

CAPLAN: Fettuccine Alfredo.

TALEB: Very good, Alfredo. The chemists will have to work out the equations. We’ve got so many chemists here, NIH and all that stuff. Boy, you’ve got a lot of chemists. You’ve got 500, 600 chemists working on equations all week.

The other people, the fat, well-dressed people, will do the following. You take an existing recipe, you randomize. You add something to the recipe. If you have an improvement, you keep your action up. If you have a bigger degradation, you just give the food to the chemists, who won’t notice the difference.

[laughter]

On one hand, you’ve got to ratchet up by convex trial and error because the errors don’t cost you anything. It’s like an option. You have optionality on what to keep or not to keep. The other one is a top-down thing.

The difference between them is optionality, when we guess: Who’s going to win? Who’s going get you a better fettuccine at the end of the day?

CAPLAN: I feel pretty good because that’s close to my first guess about what you had in mind.

TALEB: Exactly. Optionality, yes.

CAPLAN: Yes, my first guess was actually you agree the traditional academic curriculum isn’t very useful, and learning by doing is, which are two things I said. Then I missed the chance to explain why learning by doing works so well. That sounds . . .

TALEB: I’m not blaming your evidence. You use your argument for society to improve by maybe changing the way we teach people and also put some historical background, since we have Tyler here, put some Greco-Roman stuff . . .

[laughter]

You know the Romans despised theory, and the Greeks despised practice, which is why The Black Swan is dedicated to Mandelbrot, a Greek among Romans, and the next one is dedicated to Ron Paul, a Roman among Greeks.

[laughter]

Understanding that the engine behind everything is convexity, the chapter, or the comment I made, was I’d rather be antifragile than smart. You can model it, and I did the Monte Carlo by showing the population of people who actually are stupid but not very stupid. But they do a lot of trial and error.

And people who are very smart, like the chemists, but they can’t do a lot of trial and error. They have the intelligence to realize what they’ve got is slightly better than the previous day.

Far ahead, you need 1,000 IQ points to match someone who will aggressively go trial and error. That was the idea, teaching people that it’s impossible unless you have practice.

The route I was suggesting, education, is you send people, you make people work as nurses and then they go to medical school. Effectively, I spoke to a lot of doctors, and they think it’s a good idea because they’re afraid of medicine being now too theorized, becoming too theorized.

You make people run a local racketeering shop or a casino or something like that, for seven-eight years and then you go study economics.

[laughter]

We’re living longer, so this idea of front-loading education makes no sense.

CAPLAN: There are plenty of countries where you don’t have to get an undergraduate degree to go to medical school. In the US, first you do an undergraduate degree, then you go to medical school. Like you were saying, better to be a practitioner for four years and then maybe go to medical school, and just skipping undergraduate.

TALEB: Not skipping undergraduate. Start undergraduate later in life, age 30. Think about that model. I know because I started trading . . . I had no idea. First of all, I didn’t like school. I liked to read books. I was at these schools, and it was boring for me.

I started trading and then discovered math. I said, “Oh, this is interesting.” I started discovering math, so I got immersed into math, and 15 years later, I went back to school. I went back to try to do math and effectively doing those classes. I did my thesis and that was it. But the idea — I started writing papers — the idea of having to start by theory and ending up with practice doesn’t work.

You should try practice, then theory.

CAPLAN: What do you think about people who make the following argument? Only you can decide whether it’s a true black swan argument, but people might put it forward as their version of the black swan argument.

I’ve heard a lot of people say, “Well, sure, virtually all these subjects that you’re learning in school are useless, but there are positive black swans. Once in your life, an academic subject that you study is going to turn out to be absolutely crucial.”

One example of this — there was a guy who said, “Well, look, actually French was really important. It was totally worth the time because one time I was at Charles De Gaulle Airport, and if I hadn’t spoken French, I would have missed my flight.” Should you spend three years studying French to avoid one missed flight? That seems like a pretty . . .

TALEB: It is, yeah.

CAPLAN: Anyway, you can imagine someone, giving something like that, saying, “Sure, almost all the subjects are no good, but you’re going to get one positive black swan out of your whole education. That alone makes it worth all that effort.”

TALEB: No. The counterargument’s vastly more important, you’re spending how many hundreds of hours studying something you’re not going to remember later, or you can spend that time learning a craft like, I don’t know, how to break into safes.

[laughter]

You can learn that in about that time, so the payoff — and plus, it tells me that the other one won’t have an equivalent amount of tail events that are positive. You’re ruling out that the other activities would have a theory class. The problem with education now is that it’s a business. Like any business, it’s a huge financial business. It’s become a racket.

You’re spending how many hundreds of hours studying something you’re not going to remember later, or you can spend that time learning a craft like, I don’t know, how to break into safes.

It’s very hard now to argue against education when we know all the empirical data — if you want to have a few minutes to explain it, or let’s say, to convince — or have all the empirical data that at the individual level, education — and that’s how I’ve called them antifragile — education, it appears that it’s good for you because it’s a great way to transmit wealth to a generation, because your children are certain to stay in middle class if you educate them.

It’s a great way, but at the level of a country, it doesn’t seem to work. In fact, it’s the reverse kind of thing. Alison Wolf’s data.

Even more interesting that people think that by educating people they’re actually transmitting knowledge instead of technique because of places like Germany and Switzerland. These places had a very low level of formal education and a huge amount of apprenticeship, and a huge amount of built-in.

I was with Alison Wolf at a party. We’re saying that education didn’t work. I was talking to her. I said, “What are you guys talking about?” “How education doesn’t work.” “What? Education doesn’t work? You mean knowledge doesn’t work?” “No. This is knowledge.”

This works and the knowledge won’t be had at a cocktail party, but education in terms of something formatted to be taught in school doesn’t seem to work empirically. So that’s his argument and the one he’s presenting . Now we’re looking at either to go deeper into what’s a reason, or the other one is, what is the alternative?

The alternative, more apprenticeship visibly, how we’re going to destroy that deep state of education that tries to sell you something for a quarter-million dollars that’s worth nothing — factually, it’s negative because of the time we spend there — and why we should have effectively knowledge or education or academy but formatted for something more optional and later in life.

What you learn in grad school is definitely something useful for you, no?

CAPLAN: Yeah. What I usually tell people who say, “Look, give me a reason why school is great” is that there’s going to be something you learn there that’s going to be invaluable.

Say, “Look, I agree that it makes sense to expose people to a variety of subjects, but it seems like it makes a lot more sense to expose them to 10 or 20 subjects that they’re actually likely to use than 10 subjects that virtually no one on Earth uses.”

Rather than saying, “Let’s make sure everyone studies poetry and art history and a foreign language in America, and everyone learns a bunch of sports.” Instead, why not make sure everyone spends a few weeks learning some plumbing, a few weeks learning some electricity, a few weeks going into learning some customer service?

Yeah, you do want to have a diverse menu. You don’t want to lock a 12-year-old into a career when he’s 12. But it’s still far better to go expose him to a tasty menu of realistic options, rather than the tasty menu of pipe dreams, which is what seems to be education is mostly about.

TALEB: Then, the root of that, my feeling, in the Anglo-Saxon world is the desire — this is why they call it liberal arts education — to aristocratic ties to themselves.

Again, let’s talk about the Greco-Roman world. You had the trivium or quadrivium, absolutely nothing practical about them, the rhetoric, the grammar, some things. The liberal education was what people learned in order to become aristocrat and idle upper class.

Then you had the real professions of becoming a baker, how to do something with wood. And the English, the upper class — of course they didn’t want to be working class, so they sent their kids to learn that stuff. And this is what came to America.

Education is split in two. You have technical education like law — not technical, but professional education — law, medicine, what else? Engineering and all these things, and then you have mathematics. If you look at it historically, the engineers didn’t really connect to the other ones because the Roman engineers did not use Greek geometry.

We only started using Greek geometry late in life after the educational system started including mathematics for these people. Engineers built cathedrals without clear geometry. It was actually more robust.

Geometry will give you these ugly corners. Before, we didn’t even know what the right angle is. Before, it was more involved, it was rule of thumb, and it was different. They had the separation, segregation.

So what you want to do? Is this liberal education that’s contaminating the rest? Or is it the technical that’s contaminating the expectation of what education should be like?

You say, “OK, this is the kind of thing you do like piano lessons on the weekends.” You read Homer and stuff like that. It’s important, and you become civilized. Stuff you do to be civilized and be able to have dinner with the vice president of the World Bank, these are the things you do. And these are the things you do to get you ahead in life.

Your problem has been a known problem ever since you had Rome and Greece competing.

CAPLAN: What do you say? My most controversial policy proposal is just less, so educational austerity, spending less on education. I’ve noted that when someone says, “We need more money for education,” the reaction is normally, “Yay,” not “What specifically do you plan to spend the money on?”

On the other hand, when I say, “Let’s spend less on education,” the normal reaction is, “Precisely what exactly do you propose to cut anyway?” Not something that a lot of people are interested in. But reading through, I get the feeling that you might actually be willing to countenance a draining of the educational swamp through cutting off some of the money.

TALEB: You bet. I went to India once, and I probably had no advice to give anyone. So I said, “Better to open a thousand schools than one university.” I opened, I said that.

Sure enough, a year later, I see a headline, “Modi speech saying . . .” Actually, I said that to Modi, to the president. The headline: “Modi saying he would rather open a thousand schools than a single university.” Then, a focus on technical . . .

What’s the problem with India? India has a lot of educated people who are sociologists. Who cares? It’s nice, it’s the thing for dinner with the VP of World Bank.

Whereas, if you want to know electricity, how to make batteries or something like that, that’s more useful. Now, the trend is effectively to cure that problem of having theoretical education coupled with complete misery, with something in the middle, which is the technical schools.

CAPLAN: Your standard critique in the elementary education is that it’s also terrible. The teachers don’t even bother showing up, very little learning going on there. A normal American reaction is to say, “We need to go and get the Indian schools in order, so that teachers show up and do their job.”

My reaction is more of, given this has gone on for at least decades, why don’t we cut the spending first and then say, “Maybe you can have some of the money back if you actually start doing your jobs?” Skin in the game.

TALEB: Better skin in the game is, teach people young, very young, spend three or four hours doing something. How did people learn medicine in the old days? It was a generational thing.

Your father was a doctor, and you walked around with your father, or maybe mother. Actually, there were a lot of women in the Levant in the health sector. Then you learned, and this profession stayed within the families. Their secrets weren’t transmitted to the outside.

Which, unfortunately, we don’t have because the problem now with an education is it’s already broad and open, whereas, transmission of technical skills are worked by guilds and secrecy, like the masonry, to the point that today — the Romans had phenomenal concrete that we don’t know the recipe. [laughs]

CAPLAN: Reading your book, I feel like one thing we have in common is things that we’ve seen with our own eyes weigh heavily upon both of us.

To me, a lot of my extreme negativity about education actually comes not only from memory of my own education. When I go to back-to-school nights, when I go to parent-teacher nights, I just think if you wanted to go and tell these people, “Teach your kids to go learn and do something,” would I trust these people to carry out that order?

My reaction is, no way. These are touchy-feely people who do not want to think about anything in terms of practical results. They don’t like the idea of there being a task like, “Did he learn it or not?” Instead, for so many of the teachers that I saw, it really is all about the experience. Did you enjoy the experience?

I’m there saying, “No, it’s not just about the experience. It’s about do you know something at the end? Can you do something? Can you show me?” And don’t say that it can’t be measured. If you really knew something, you could come up with a test to measure it.

What do you think?

TALEB: I think that the idea, again, if we go back to the ancients, when you were learning a profession, you learned a profession from the professional, so skin in the game. I put in Skin in the Game what happens to fields where the feedback is peer reviewed, not feedback coming from reality.

In other words, the carpenter has feedback from his clients, or her clients, whereas a macroeconomist only has feedback from Paul Krugman, so it’s closer.

[laughter]

It’s the closed system, and they can give themselves Nobels. When you want to learn something, you will learn. This is why I have a section, where for 280 years, there was the fundamental problem with probability that it’s so obvious that Murray Gell-Mann picked it up.

Every trader knows what nobody in decision science or no psychologist knows because they’re not risk-takers. They’re not going to do reality. You are split into these two things. Learn from a professional who has done the stuff.

If you want to learn how to become a Mafia lord, you learn from a Mafia lord. You don’t go learn from Francis Ford Coppola. You learn from the people who do it.

In the old days, the other stuff, you’re supposed to be autodidact under a tutor who supervises what books you’re going to read. There was none of this stuff from high-security prison environment that we have today.

You see, that’s a liberal education, the way you have mentors and you define mentors. The English Oxford-Cambridge system still has these, where you’re self-directing your own learning.

If you apply it to high school, I think what I learned the most was from my years in high school, but not from high school. At some point, this great idea to be a Marxist for a few hours or a Trotskyist because you make sure you read a lot of interesting books, and you go through these phases.

Let’s see. We have to reform education to turn people into autodidacts. Plus, there is another thing. You cannot possibly trust two classes of people: educators who are better at explaining than understanding because they’re selectively better, and science journalists, who are better at communicating than understanding. Then, you end up with things like scientism.

No self-practicing scientist would rule out skepticism and tell you that science is settled and stuff like that. These people have a mindset that science is scientism because they don’t know enough science. All they know is how to communicate, and that is a problem.

You’re learning. You realize that you’re not learning from someone who does science. You’re learning from someone who transmits science.

I will tell you now I was lucky that I didn’t have a good math teacher when I was kid — I started zoning out — because then I would become a mathematician much earlier. But I’m self-taught in almost everything that I really like.

The teaching, the way that they teach you mathematics, is really to deter you from liking mathematics.

[laughter]

CAPLAN: You probably don’t get this a lot, but when I was reading Antifragile, I often kept thinking, “My God, he’s such an optimist. I can’t believe that he thinks the world works this well.”

TALEB: Yeah, I’m an optimist.

CAPLAN: Yes, but this is a criticism.

[laughter]

When you said that you either learn from peers or reality, how about the thing that usually happens, which is that you are learning from a person who doesn’t even know the subject they are teaching? Which is what I see happening in so many classrooms, when I see history teachers who know less history than the better students in the class, and these are the teachers.

I would rather that they have someone, somebody you’re talking about, someone who only knows what they know in books, but at least they know that. I’d rather have that person teaching the class.

TALEB: What’s happening now, more and more, in the education system is, how do you become a professor and get tenure? By writing some kind of garbage about something.

[laughter]

For example, I was trying to read something the Republic of Letters on Wikipedia. All the commentary was about gender study. I didn’t want the theory. I wanted the facts, and you can’t get the facts.

You end up with a lot of people, in fact, today, this generation — because of the competitive environment and the closed circuit in the humanities — that basically don’t know anything about humanities. All they know is the theories du jour about this and this, and the postcolonial approach to this or that.

For example, when you start arguing with people who studied about something called Middle Eastern studies — which shouldn’t exist as a discipline — they start talking about colonialism of the French.

The French spent 21-and-a-half years in the Levant as a United Nation mandate. Explain to me the colonialism.

They say, “Well . . .” They don’t even know the basic facts because the more you have a ratio of theories and way more -isms, and stuff like that and the Marxism, so someone that’s good at Marxist interpretation of this and this in the postgender world. And they don’t know the facts.

This is why we can’t rely on these instructors to teach you the humanities — because you don’t get tenure from knowing the facts. You get tenure from inventing some full structural theory of baking beans and mint in Sassanid Persia. That’s how you get your tenure. These guys are ignorant.

CAPLAN: Wouldn’t it be a big step up if we replaced current academics with equally highly talented academics who just have a command of facts?

TALEB: Yes, but how do you select for these? Basically, in Europe, for example, they have the separation between researchers, and in France, for example, and instructors. Instructors are supposed to know the curriculum. Actually, they’re tested. I assume they’re tested on a subject.

The people who produce papers go produce papers that nobody reads. “Put your energy there, and we’re going to give you a good lifestyle and some income that’s lower middle class for researching, and leave us alone.”

This, I understand, is not important. You get some people who instruct, give you history lessons, who know actually some history. They don’t have that in a more competitive environment.

CAPLAN: One argument I made is that almost every student has an intuitive understanding of the signaling model that I’m defending in my book, where I say the main thing you’re trying to do is impress employers, not actually learn the material.

Here’s a passage from Antifragile that is very signaling friendly. “I wasn’t exactly an autodidact, since I did get degrees; I was rather a barbell autodidact as I studied the exact minimum necessary to pass any exam, overshooting accidentally once in a while, and only getting in trouble a few times by undershooting.”

Would you say that you had an intuitive understanding of the signaling model by getting the stamp on your forehead?

TALEB: Exactly, I decided to come to work, decided to come to business school in America. Why? It’s very difficult to get in. I said, “OK, let me try.” What you have to do, you have to take this test. What do you do to pass the GMAT or something like that?

You go in, and you buy a lot of coffee. You lock yourself up for months, taking these, and then you go take the tests. First of all, you forget right after, once you’ve taken the test.

You go to business school, but you realize that business school is mostly a way to meet people, or to get a job, the first job after business school. Everybody will forget the three phases of a public company.

Then, later on, I became an employer. When I was employed, I had never met anybody going to business school, nobody who was signaling, plus they come and argue. So you hire someone from — for example, you notice there’s something. If you went to business school, unless you went to the top 20 at the time, it was a waste of money. The mathematics, if you can go to the top 25,000th schools, there were 25,000 and still useful.

So you realize that there’s some things that can be taught in that structured environment, like engineering, mathematics, or chemistry or, I don’t know, belly dancing or stuff like that, where at business school, you have no skills basically. It’s the signaling that you discover, but I didn’t need the signaling beyond my first job.

CAPLAN: We all know you’re a maverick, but suppose that you had undershot very consistently in academics, and you hadn’t finished degrees. Do you think you would still be where you are today?

TALEB: No, I tell you, this is problem with society because the way it’s organized. First of all, I was in civil war in Lebanon. If it worked, I had a family with money, I would have been writing my poetry and maybe a failed novel or something. That would’ve been my life. I was the product of reaction against the war, the anxiety, displacement, the moving from it.

You have anxiety, the plus being pushed from the area, you don’t know whether — it’s very scary to be a Christian from the area particularly at the time. This is why I said, “Well, I want to make it.”

So you want to get the degrees. You want to do this. You want to do that. You want to buy a nice suit. All the signaling, you have to cover the signaling and, on top of that, have the skills.

This is what pushed me. Effectively, I am certain that I discovered another thing, the mathemata pathemata effectively I learned from Antifragile, sorry, from the last book, I have an interest in addiction. I’m not addicted myself, but I had a family member when I was a kid.

Discover how smart addicts are at procuring money for their addiction, but they’re incapable of making money outside of that. This is some skill, some gland that comes in, that’s producing IQ when they want the drugs.

Then they can find ways to make money for the drug, but not elsewhere. I was thinking about it, and I explained that when I started trading, effectively, under the pressure, you are so much in trouble, you have to think.

You learn a lot of stuff about probability. You start high-dimensional matrices to get inverted by tomorrow morning, and you end up inverting them. You don’t know how you got the result. You show to a mathematician, they don’t believe you did it, and yet you did it.

Very slow at the time, computing that. You push to do a lot of stuff under necessity. Necessity is the mother of invention. The stuff you do then that you learn under these pressures stay with you. It’s not like the drug addict, who loses back his faculties elsewhere.

That’s what I was explaining, how basically war was a way for people to learn stuff. Then effectively, a lot of the invention we had came during war episode, and of course, in preparation for war.

Got to replace that model, of course, we’re not going to wage war — we hope not — and figure out how to force people to learn by getting them in trouble. Another mode of learning to activate, upregulate something in them that makes them branch .

Definitely not by putting them in a classroom and giving them credentials. Got to do something else.

Plus, there is another thing about you that, I disagree with you on one point — minor — that you have your metric to gauge if education is good, is performance on the job.

CAPLAN: Reasonably good metric, anyway.

TALEB: It is a good metric for people wanting to become employees, but the world needs people who create things — the artisans — or people who would mend things. Because I had this idea that Bill Gates, as much as I hate him, he created something.

[laughter]

TALEB: Or Steve Jobs. These are the people who make the engine work, and the other people are just around. For these people, we’ve got to look at these people as a disproportionate part of the sample not the variables they take. That is why I disagree.

Then my idea of IQ, I remember when you hire a trader. You would not quiz him on something because you know they all have probably very high IQ who get there. First of all, we only hire people from math or physics or engineering.

They have some kind of ability. They have all been given SAT tests — done it, GREs — done it. So what do you give them? The best test is you tell someone, “Listen, I want a French suit, and you have an hour to get it. Just this size, this model, this size, and you have an hour to go get it in New York City,” for example.

That’s the kind of test we give people, to see if they can go find that suit. Or you give them projects and tell them, “I want you to get this, this, this.” And they have an hour to do it, or two hours. You see, first of all, how many get confused at your request. These are the real IQ tests.

CAPLAN: Sounds like a test of common sense. I actually do have a whole separate set of common sense tests, which are interesting because common sense is something where people keep improving into their 50s, unlike IQ, where actually, at least sometimes, people are getting worse.

These tests are actually very interesting. There’s tests like your car breaks down on a mountain road in the middle of a snowy night. What do you do? Smart 18-year-olds give answers that get them killed, whereas normal 50-year-olds give answers where they survive.

Wow, so there is actually something besides — I’m thinking of getting the suit as part — a lot of that is actually testing common sense, which is important but actually a different kind of skill.

TALEB: That’s a central skill you need in life.

CAPLAN: Yeah! It is important.

TALEB: There’s a skill you need. It’s how you make it through an airport and get me an Auntie Anne — I like Auntie Anne — and you have 45 minutes to get one. You had no internet at the time, there’s not going to be a search engine. These are the tests that really will tell you the person who succeeds. Starting in that progression.

COWEN: What do you do when the car breaks down?

[laughter]

CAPLAN: That’s a good question. The original tests were actually written before there were cellphones. Then it normally involved getting on the other side of the barrier and then walking carefully to a call box. It’s a winding mountain road. A lot of people say, “Try to wave down a car,” but it’s a winding mountain road, so you get hit by the car.

Get on the other side of the barricade and then, holding the barricade, walk to the call box, and then call for help is a pretty good answer to that.

A totally different question. It seems like you and I are very much on the same page. You value vocational education. There are a lot of academics who say, “No, no, no, vocational education’s no good because you never know if any vocation is going to be wiped out.” One referee said, “Oh, should we send them to go to typewriter repair school?” No, you shouldn’t send them to typewriter repair school.

My answer here is, it’s better to go and train people for things that seem likely to be useful, like plumbing, than to train them for things we know are not going to be useful, like poetry. If you know anything about the economy in 40 years, it’s that poetry will not be a big part of the economy. What do you think about this?

TALEB: There’s a separation of things we do to become civilized and things we do to make money later on. People conflate one for the other. To come back, to reiterate for the moment, geometry was like poetry, something you do as an intellectual exercise. It was not required because it actually, degrades the way . . . Conflating the two has actually led to a lot of problems.

The first thing we’ve got to establish is that we have another bigger problem. The bigger problem is, where is the propaganda that we’re getting? It looks like the ratio of theories and indoctrination to finance is very high and it’s the humanities. It effectively stays lower than mathematics because you can’t really have . . .

Although we have proposals to remove the square root of -1 because it was too phallic or something — I think it was some kind of hoax — but mathematics, stuff like that. So you separate these two by institutions that are completely insulated from one another. Things you do to become civilized like knowing the history of Scotland and things you do for skills.

If we bring that back, computer science, accounting . . . In business school, I know there’s two classes that were useful for me: business law and accounting. But then these are the lead business schools. You can go get them from . . .

Actually, I’m doing something on the side with people who are in the risk business. Myself, a former Renaissance partner, a trader, and a third person. The three of us mathematically are inclined mathematicians, the three of us, and we’re teaching people risk from risk-takers’ standpoint.

The demand is huge. People want to learn from professionals, so you may have a model of accountants teaching accountants. This person teaching that one, a significant thing you can get throughout your life rather than the block education, and then you go to the job market.

To me, the risk business, I treat it like plumbing. It’s like being a plumber. It has a lot of stuff and you only learn to be a plumber from a plumber. You can’t have an English teacher also teaching plumbing. The professionals should be insulated from the humanities and the things you do to become civilized. It doesn’t mean that we should eliminate poetry from school. Of course you do that like you take piano lessons.

COWEN: I would just like to interject a question. I’d like a sentence from each of you on what you is see the biggest difference between you. You agree on a lot, but let me give you my one-sentence take on what I’ve heard is the biggest difference: The extent to which you take a kind of shaped civilization for granted is different.

Bryan, you take it for granted. You don’t think formal education is so much needed to produce it. And Nassim, you’re taking it less for granted, and you still see some room for poetry, the humanities and so on, provided they’re treated the proper way and segregated from the actual doing of stuff.

Each of you give your take. That was my takeaway.

TALEB: Exactly my thing. I want to separate things you do to be civilized — the liberal arts — from things you do to be effective. This is why. I do a lot of mathematics but I know I do it for pleasure, not for anything practical.

And, of course, I do other technical stuff that are very practical. Statistics, stuff like that, and some mathematics, applied math. But when I play with geometry, absolutely no practical thing. I do it like I would with poetry.

So long as you separate these two, you have a barbell. This is this, and this is that, and that’s that, and you separate the two of them, then you will avoid the problems we have.

Also, you should have the professional stuff. Taught to children alone by professionals in that field. You should have the humanities stuff taught by people who like that stuff.

CAPLAN: I would say, I don’t take civilization for granted at all. What I say is that it can’t possibly be the case that an education in liberal arts and humanities is causing civilization or sustaining it because virtually no one acquires this knowledge.

Given that almost no adult can answer even basic questions about this stuff, I don’t see how you can say that schools are saving civilization because they aren’t achieving the goal that allegedly is required to save it.

TALEB: Actually, I agree with you…

[laughter]

…on one point that strikes me about education. It destroyed civilization, the classics. I think we should separate the holy and the profane, in other words. We should keep things in the holy instead of the profane.

I think they destroyed the Latin language as well, the Catholic Church. One comment again from theology: when they translated the texts from Latin or from Vulgar method into vernaculars. Because then, when you do, you try to market our religion as something useful, but before it was something holy, this whole thing.

You notice that the reason the Pope presented, he said that it’s to increase the number of Catholics. In fact, the Church contracted at the time, when compared to Islam, where you have one-and-a-half-billion Muslims praying in a language they don’t understand so visibly.

It’s exactly the same thing, is that its separating the holy and profane. Don’t translate to vernacular the beautiful Latin things. Likewise, do not try to make poetry or literature or history — do not make it practical.

Just make the people study for their own sake, just like you go to church. It’s not for anything practical. You don’t go to church because you’re going to meet an employer. You go to church to go to church. Likewise, we have to separate these two.

COWEN: Closing statement from you Bryan.

CAPLAN: I’ve just got one question left. I really desperately want to signal that I did read the appendix, so I have a question about the appendix.

COWEN: Last question and answer.

CAPLAN: Yes. You wrote, “It is often easier to modify the f(x) than to get better knowledge of x.” When I was reading this, it seems like even the phrasing suggests that we should be weighing the relative ease of modifying the f(x) than learning about x case by case.

Suppose we’re talking about the possibility that one day you were going to eat something lethally poisoned. One thing you could do is take a lot of precautions against eating poison. You could hire a poison taster, or you go and read up about what kinds of foods are hard to poison.

On the other hand, you could just go and say, “Hardly anyone today gets poisoned by lethal poison put in their food. So low probability, and I’m not worried about it.”

The latter reaction is actually my reaction. Am I wrong? Should I have been worried about being lethally poisoned or not?

TALEB: Let me rephrase the f(x) and x, then you’ll see it’s both right and wrong.

When I say that the problem I noticed in probability statistics that people . . . you take x. X is, what will the stock market do tomorrow? And you study the properties of x instead of studying f(x), how it affects you.

You can have it pay off. You change the payoff. X is knowledge, which is exactly the left side. It’s one thing. Don’t conflate the conflation of x, how it affects you, f(x).

For example, if you take random events, if f(x) is convex, you have optionality. You see? Some people have optionality for f(x), some people have negative optionality.

It’s technical. It’s hard to explain it. But the gist of the point is one of them is knowledge. The other one is how it affects you. It can change you.

For example, one of them is what would happen if there is war. The second one is the insurance contract, f(x). When insurance company puts in a close-ended clause so it doesn’t affect them anymore. They put it in a clause.

One of them needs a statistician. The second one needs a lawyer, a contract. You mitigate your risk either by understanding the risk, which is very large, or by having a lawyer who puts in a clause to protect you from that event if it happens. That’s f(x).

The idea that there’s a conflation between the two, I’m not saying that you should ignore x or ignore f(x). I’m saying that we should know whether you’re dealing with x or f(x). We’re either dealing with a food composition, or are we’re dealing with how it affects us? See? That’s the f(x).

This is my answer. To put it in context, poetry is x, whatever it is. F(x), how it affects us. F(x) is a techne, and x is the episteme. The ancient always separated the episteme from techne.

The problem is, as society got rich, everybody wanted to reach education by imitating the aristocrats, with the illusion that it’s going to help them get rich.

When in fact, it’s the kind of thing you do when you’re already rich. This is where Alison Wolf and Pritchett come in to discover that these educational things are effectively the product of societies that are rich and definitely not causative to wealth.

COWEN: Thank you both very much.