Editing Nassim Nicholas Taleb (section)

== Criticism and reactions ==
[[Aaron Brown (financial author)|Aaron Brown]], a [[quantitative analysis (finance)|quantitative analyst]] and [[adjunct professor]], said regarding ''The Black Swan'' that "the book reads as if Taleb has never heard of [[non-parametric statistics|nonparametric methods]], [[data analysis]], visualization tools or [[robust statistics|robust estimation]]."<ref name="brown">{{cite journal |last1=Brown |first1=Aaron |author-link=Aaron Brown (financial author) |year=2007 |title=Strong language on black swans |journal=[[American Statistician]] |volume=61 |issue=3 |pages=195–97 |doi=10.1198/000313007x220011 |s2cid=120488719}}</ref> Nonetheless, he calls the book "essential reading" and urges statisticians to overlook the insults to get the "important philosophic and mathematical truths." Taleb replied in the second edition of ''The Black Swan'' that "One of the most common (but useless) comments I hear is that some solutions can come from 'robust statistics.' I wonder how using these techniques can create information where there is none".<ref>''[[The Black Swan: The Impact of the Highly Improbable|Black Swan]]'', 2nd, edition, p.&nbsp;353</ref>{{rp|353}}  In 2007, Westfall and [[Joseph Hilbe|Hilbe]] complained that Taleb's criticism is "often unfounded and sometimes outrageous."<ref name="westfall">{{cite journal |last1=Westfall |first1=P. |last2=Hilbe |first2=J. |author-link2=Joseph Hilbe |year=2007 |title=The Black Swan: Praise and Criticism |journal=[[American Statistician]] |volume=61 |issue=3 |pages=193–194 |doi=10.1198/000313007x219383 |s2cid=120638553}}</ref> Taleb, writes [[John Kay (economist)|John Kay]], "describes writers and professionals as knaves or fools, mostly fools ... Yet beneath his rage and mockery are serious issues. The risk management models in use today exclude the very events against which they claim to protect the businesses that employ them. These models import a veneer of technical sophistication ... "<ref>{{cite news |last=Kay |first=John |author-link=John Kay (economist) |date=27 April 2007 |title=Books: Unimaginable horror [Book review of ''The Black Swan''] |work=[[Financial Times]] |url=http://www.ft.com/cms/s/0/824ac36c-f134-11db-838b-000b5df10621.html |access-date=7 May 2016}}</ref> Berkeley statistician [[David Freedman (statistician)|David Freedman]] said that efforts by statisticians to refute Taleb's stance have been unconvincing.<ref>{{cite web |last=Freedman |first=David A. |author-link=David Freedman (statistician) |title=Black Ravens, White Shoes, and Case Selection |url=http://www.stat.berkeley.edu/~census/crow.pdf |access-date=7 May 2015 |publisher=[[University of California, Berkeley|Berkeley]]}}</ref>

Taleb contends that statisticians can be [[pseudoscientists]] when it comes to risks of rare events and risks of blowups, and mask their incompetence with complicated equations.<ref>{{cite web |last=Taleb |first=Nassim Nicholas |date=2013 |title=What We Learn From Firefighters |url=http://edge.org/response-detail/23839 |access-date=7 May 2015 |publisher=[[Edge.org|Edge Foundation, Inc.]] |quote=Simply, one observation in 10,000, that is, one day in 40 years, can explain the bulk of the "[[kurtosis]]", a measure of what we call "[[fat tail]]s", that is, how much the distribution under consideration departs from the standard [[normal distribution|Gaussian]], or the role of remote events in determining the total properties. For the U.S. stock market, a single day, [[Black Monday (1987)|the crash of 1987]], determined 80% of the kurtosis. The same problem is found with interest and exchange rates, commodities, and other variables. The problem is not just that the data had "fat tails"... it was that we would never be able to determine "how fat" the tails were.}}</ref> This stance has attracted criticism: the [[American Statistical Association]] devoted the August 2007 issue of ''[[The American Statistician]]'' to ''The Black Swan''. The magazine offered a mixture of praise and criticism for Taleb's main points, with a focus on Taleb's writing style and his representation of the statistical literature. Robert Lund, a mathematics professor at [[Clemson University]], writes that in ''Black Swan'', Taleb is "reckless at times and subject to grandiose overstatements; the professional statistician will find the book ubiquitously naive."<ref name="lund:00">{{cite journal |last1=Lund |first1=Robert |year=2007 |title=Revenge of the white swan |journal=[[American Statistician]] |volume=61 |issue=4 |pages=189–92 |doi=10.1198/000313007X219374 |s2cid=122874205}}</ref> However, Lund acknowledges that "there are many points where I agree with Taleb," and writes that "the book is a must" for anyone "remotely interested in finance and/or philosophical probability."

Taleb and Nobel laureate [[Myron Scholes]] have traded personal attacks, particularly after Taleb's paper with {{Interlanguage link|Espen Gaarder Haug|no}}, in which Taleb alleged that nobody uses the [[Black–Scholes model|Black–Scholes–Merton formula]]. Taleb accused Scholes of being responsible for the [[2008 financial crisis]], and suggested that "this guy should be in a retirement home doing [[Sudoku]]. His funds have blown up twice. He shouldn't be allowed in Washington to lecture anyone on risk." Scholes retorted that Taleb simply "popularises ideas and is making money selling books". Scholes claimed that Taleb does not cite previous literature, and for this reason Taleb is not taken seriously in academia.<ref>{{cite news |first=Anuj |last=Gangahar |url=http://www.ft.com/cms/fb971062-0b4c-11dd-8ccf-0000779fd2ac.html |title=Mispriced risk tests market faith in a prized formula |work=[[Financial Times]] |date=16 April 2008}}</ref> Haug and Taleb (2011) listed hundreds of research documents showing the Black–Scholes formula was not derived by Scholes, and argued that the economics establishment ignored literature by practitioners and mathematicians such as [[Ed Thorp]], who many years earlier, had developed a more sophisticated version of the formula.<ref>{{cite journal |url=http://www.maths.usyd.edu.au/u/UG/SM/MATH3075/r/Haug_Taleb_2011.pdf |title=Option traders use (very) sophisticated heuristics, never the Black–Scholes–Merton formula |journal=[[Journal of Economic Behavior & Organization]]}}</ref>

Taleb's outspoken and directed commentary against parts of the finance industry—e.g., saying at Davos in 2009 that he was "happy" that [[Lehman Brothers]] collapsed—was followed by reports of threats and personal attacks.<ref>{{cite news |url=https://www.wsj.com/articles/SB123457658749086809 | work=[[The Wall Street Journal]] | title=Overheard | date=14 February 2009}}</ref>

Taleb is known for his uncensored criticism of public figures and institutions. He has referred to former UK Prime Minister [[Tony Blair]] as "a very dishonourable fellow" and Blair's successor, [[Gordon Brown]] as "an idiot". He has criticized prominent economists like [[Larry Summers]], [[Paul Krugman]] and [[Joseph Stiglitz]], stating that "they cause more crises than they solve". He has also been critical of the [[World Economic Forum]] at [[Davos]], calling it the "International Association of Namedroppers" and stating "they think it's their mission to solve a problem they don't understand."<ref>{{cite web |title=Nassim Nicholas Taleb uncensored: Gordon Brown is 'an idiot', Obama a 'fossil system' |url=https://economictimes.indiatimes.com/magazines/panache/nassim-nicholas-taleb-uncensored-gordon-brown-is-an-idiot-obama-a-fossil-system/articleshow/56799562.cms |website=The Economic Times |access-date=19 November 2024 |date=27 January 2017}}</ref>