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Discussion of Nassim Nicholas Taleb’s Type

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By Guilherme Varela and Ryan Smith

Disclaimer: This article relies on a methodology that we usually caution our readers against, namely confounding mental processes (functions) with mental contents (specific positions and beliefs). Therefore, if someone were to protest the method employed here, we would immediately have to grant them the point. Nevertheless, in the absence of other articles on the same topic, it is our hope that the article can at least shed some light on Taleb’s type.

***

You are going skiing with your buddies and break your leg. Not on the slopes, mind you, but because you slipped on the wet floor at the airport. You calculate that sacrificing a few years of your life working hard to climb the corporate ladder will be worth it, but then you get cancer and regret not having experienced more of the good times in life. As the manager of a famous casino, you sign a five-year contract for an irreplaceable $100 million performer who then gets mauled by a lion.

Randomness and uncertainty have been one of life’s constant interests for former portfolio manager and derivatives trader Nassim Nicholas Taleb. Since leaving his career in business, Taleb has now turned scholar, intellectual, and self-proclaimed “epistemologist of randomness.” He is best known for his four books on probability and randomness, Fooled by Randomness (2001), The Black Swan (2007), The Bed of Proscrutes (2010) and Antifragility (2012).

Taleb is known as an acerbic critic of what he calls “Wall Street Wisdom.” Here are three of the fallacies that Taleb has pinpointed as endemic to Wall Street thinking:

Ludic fallacy: The supposition that randomness behaves like in a casino. In a game of roulette, for instance, we know all of the following with perfect certainty:

In real life, however, once the inherent randomness of imperfect market knowledge and external unknowns are factored in, we cannot be sure of any of these factors. The roulette of life is seldomly neat.

Narrative fallacy: Human beings are by nature endowed with remarkable pattern-matching skills: “If little Timmy fell ill after trying a new breed of berries, we should probably stop serving Timmy those berries.” These pattern-matching abilities have helped us survive over the millennia, but sometimes they are too active, and people start seeing patterns where there are none. We start believing in astrology or clairvoyance, or we attribute certain superior skills, qualities, or talents to people who are consistently successful at what they do. For example, until the middle of 1942, the German military machine was widely supposed to be unbeatable on account of the many extraordinary victories it had won. Yet once the Germans started being beaten, this supposition was exposed for what it was: An artificial narrative that was imposed on a series of events that were essentially the result of randomness and unorthodox risk-taking, rather than innate characteristics.

Black Swan Theory: Or the Problem of Induction, which can be illustrated as follows: Before the discovery of Australia, all swans were white. But the mere sight of a single black swan nullifies millenniaof accumulated experience.

According to Taleb, the purpose of his thinking is exactly to develop a kind of thinking that is free of the fallacies listed above. In Taleb’s view, we should always be open to the emergence of those totally unexpected outcomes that are commonly called Black Swans.

In Taleb’s view, in order to qualify as a Black Swan, an outcome has to have all of the following properties:

  1. It is practically unpredictable (i.e. no known theoretical framework or measure of forecasting could have predicted the outcome – it was totally off the known charts).
  2. It carries a massive impact (e.g. in the immediate wake of the Financial Crisis of 2008, wealth corresponding to the entire annual output of Italy and Spain disappeared overnight).
  3. It is extremely disruptive (e.g. because it had by chance been raining prior to the Battle of Agincourt, the French armored knights were stuck in the mud and were mowed down by English longbowmen, and France lost thousands of important nobles).
  4. It is the target of the narrative fallacy which we outlined above (e.g. the complexity of the 2008 Financial Crisis has often been reduced to narratives about “greedy bankers”).

With regards to the common statistical method, extreme outliers that are present in the data are as a matter of course “cleaned out” before analysis of the data can begin. But according to Taleb, that is a luxury that we can ill afford, as that is precisely the kind of thinking that blinds us to the emergence of Black Swans.

According to Taleb, Black Swans are actually far more central to the historical process than we suppose. In Taleb’s view, history is uneventful most of the time, with a handful of Black Swans accounting for many of the deep-keeled ways that the world looks today. Think about what the world would have looked like if the Roman emperor Constantine had championed some other sect than Christianity in 313 CE. Or what the world would have looked like if the Chinese Treasure Fleet had discovered the Americas before the Europeans, or what the modern day would look like without Tesla, Einstein, Microsoft, and Apple.

Taleb’s Type 1: The Uppermost Perception Function

In terms of Jungian typology, the foremost characteristic of the introverted functions is that the introvert references the known priors in his own psyche before moving on to the outer world (Psychological Types §769). With regards to the introverted perception functions (Si and Ni), Ni types have an specially close relationship to the narrative fallacy, i.e. they impose characteristics and contingencies on outer events that are not necessarily there in the events themselves (Psychological Types §658).

The Si types, for their part, tend to exhibit an attachment to the ludic fallacy, i.e. they tend to believe that reality will behave the same in the future as it did in the past. For this reason, Si types are frequently quite good investors. As long as they can operate within known frameworks where they can use their accumulated experience, they are, all other things being equal, at an advantage over other types.

Since neither of these properties apply to Nassim Taleb, we would be justified in supposing that his uppermost perception function was an extroverted one.

Taleb’s Type 2: Fe and Te vs. Se and Ne

If a judging function is extroverted, it will have a preference for imposing an intelligible structure upon outer events. Outer objects and events are arranged according to schemata that come from the EJ type’s own mind, rather than from the outer objects themselves. That these qualities are really imposed on outer objects is easy to see with Te (Psychological Types §585). But it also becomes visible with Fe once we observe that a lot of the valuations of Fe types stem not from a valuation of the objects themselves, but from what is commonly thought of such objects. Jung gives the example of a person who finds himself praising a painting, not because of some pure act of perception, but because the artist in question is commonly thought to be brilliant (Psychological Types §595-596).

Therefore we may say that Te types, like Si types, are prone to exercise the ludic fallacy (treating their predictions of the future like a game of roulette), while Fe types, like Ni types, are prone to succumb to the narrative fallacy (investing and selling when others do so, because others do so).

Thus comparing the extroverted perception functions (Se and Ne) to the extroverted judging functions (Te and Fe), it is clear that Se and Ne are more flexible, but less organized, than Te and Fe. That is also why a certain “hands-off” approach commonly governs the attitude of the four extroverted perception (EP) types – they simply refrain from imposing structure on the outer world, and they don’t necessarily expect reality to be the same tomorrow as it was a few days ago. As such, all other things being equal, the Se and Ne types may be considered the risk takers par excellence.

One reason they are so comfortable taking risks is that given their generally disorganized nature, they do not naturally expect a favorable outcome, nor dread an adverse one. In fact, the favorable outcome is often of secondary importance to the act of engaging with reality and pushing the boundary possibility a few more steps into the distance.[1]

This is the psychological attitude that seems most in line with Taleb’s personality and way of thinking. It would thus be reasonable to suppose that he was an EP type.

Taleb’s Type 3: Se or Ne?

Now that we have looked at the similarities between Se and Ne, let us look at the differences.

Extroverted Sensation is grounded and intense. It has an optimistic epistemology where the more that is known to a person, the more empowered he will be and the more capable he will become. All else being equal, this disposition is one that is shared among all Se-Ni types. There is a focus on bringing the singular goal to fruition, indeed an attachment – a drive to succeed. In the types where Ni is pushed downwards in consciousness by Se (i.e. the SP types) the sum-total of possible outcomes of a given endeavor is narrowed down until only a handful of the most probable outcomes are left. Conscious access to Se keeps the person’s mind on the prize.

Extroverted Intuition is fickle and tentative, but broader in outlook than any of the other functions. Exploration of every possible outcome often takes priority with this type.  The sheer load of extroverted intuitive perception is often so overpowering to NP types that a certain apathetic attitude may be observed in them, even with regards to their own projects. With so many variables and possible outcomes present in consciousness, the Ne type is eventually overwhelmed in his own attempt to accomplish something as he is flooded with options and possible outcomes that in the end are too wide-ranging for even his own psyche to apprehend. The Ne type cannot help but ponder factors that are outside of his control.

Where the Se-Ni types have epistemological optimism, Si-Ne types are therefore plagued by epistemological pessimism instead. SJ types usually guard against this pessimism by taking precautionary measures and avoiding unnecessary risks. But the NP types (and especially the ENP types) are often too exploratively wired to follow the example of the SJ types. Furthermore, with their Sensation being primitive, the NP types often run the risk of forgetting about the need for real-world results as they chase off into a realm of abstract possibilities that have no obvious application or use. For every Einstein or Darwin whose private ponderings changed the world, there were thousands of NPs whose cogitation never reached application.

The NP types, then, and the ENP types in particular would therefore seem to be most congruent with Nassim Taleb’s personality and interests.[2]

Taleb’s Type 4: Fi or Ti?

If the notion of Taleb as an Ne type is granted, it now remains for us to figure out what Taleb’s auxiliary function is. In Jungian typology there is a great misunderstanding (which was to some degree begotten by Jung himself) that only T types tend to concern themselves with science while only F types tend to concern themselves with art. For the same reason, one can easily find people who regard that proposition as self-evidently true. Even the word ‘Feeling’ itself has the unfortunate consequence of suggesting to some people that a feeler cannot think.

It is therefore necessary to define what the difference between Ti and Fi connotes before we move on to Taleb:

Far from Keirsey’s “happy puppy” portrait of the ENFP, as featured in Please Understand Me series, an ENFP in the Jungian system is simply an Ne dominant with an Fi-Te axis rather than a Ti-Fe axis. That is really the sole criteria for determining T or F once you have locked down the dominant function of Ne.

To consider which axis fits Taleb better, we have provided a more quotes page that documents the tenor of our research. In brief, however, let us consider some of his aphorisms, as featured in The Bed of Proscrutes (Random House 2010 ed.):[3]

“Work destroys your soul by stealthily invading your brain during the hours not officially spent working; be selective about professions.” – p. 6

“Academia is to knowledge what prostitution is to love; close enough on the surface but, to the nonsucker, not exactly the same thing.” – p. 4

“I suspect that they put Socrates to death because there is something terribly unattractive, alienating, and nonhuman in thinking with too much clarity.” – p. 5

“Education makes the wise slightly wiser, but it makes the fool vastly more dangerous.” – p. 5

What is common to all of these aphorisms (and we could furnish even more) is that they concern themselves with the character and position of the agents involved, before looking into the logical points that are contained in the matter. Even Taleb’s aphorism dealing with Socrates is not concerned with any particular point that Socrates made as much as it is concerned with the character and position of Socrates (a clear-minded thinker) as well as his adversaries (small-minded people who were jealous of his logical acumen). It will be seen that Taleb’s mode of judgment, concerning itself with the personal properties of the people involved, is a far cry from the Socratic tendency to pursue only the naked utterance, no matter who uttered it and why.[4]

***

Finally, another way to approach the matter of the Ti-Fe vs. Fi-Te axis is as follows: In our exposition of Te vs. Ti on the site, we saw that Ti is primarily concerned with qualitative criteria, whereas Te is primarily concerned with quantitative criteria.

When related to this dichotomy, Taleb emerges as a staunch anti-theorist and self-proclaimed anti-Platonist. By his own account, he dislikes “pure mathematics” and “pure ideas,” saying, as we saw in the beginning of this article, that they seduce because the real world is rarely that neat. In spite of his habit of heaping scorn on traditional statisticians and modern-day Aristotelians, Taleb actually does throw his lot in with the quantitative crowd.[5] Like the Te types, Taleb places stock in frequency and statistical measurements, but he turns the matter on its head by championing the outlier, the rarity, the underdog – the sole black swan that stands alone in a sea of unsurprising, “business as usual” white swans. Taleb does indeed use Te, but in the organization of Taleb’s psyche, Te comes trailing after Fi.

Conclusion: ENFP as Maverick and Sage

As a trader, Nassim Taleb was known for pursuing unconventional investment strategies which made him lose money most of the time, but which were designed to score the jackpot in the event of “unexpected” financial crashes – black swans. He has been accused of not making enough money by his fellow bankers on Wall Street and by scholars of being too applied and crafty: Of heaping scorn on the traditional statistical theories without offering a comprehensively viable alternative. This composite nature of Nassim Taleb’s interests and work illustrates many points of what an ENFP looks like when engaged in the role of science popularizer and innovative rogue (a role which people usually reserve for ENTPs).

Too quirky and nonconformist for the business world, the ENFP popularizer will on the other hand often be found to be too passionate and imaginative for the world of rank-and-file science reporting. An unconventional seeker, and self-seeker, it will often be the lot of such ENFPs to be a rolling stone and a free lance – someone who doesn’t quite fit into any of the preconceived categories of society. At once a wandering bard and a critical philosopher, they seem to go on long digressions that make you question their relevance, only to suddenly hit you with an unexpected insight of the greatest seriousness. Pensive yet passionate, silly and suddenly serious, it is this kind of ENFP that illustrates the intellectual contributions of the type as a raconteur and a deeply serious critic, a maverick and a sage.

NOTES

[1] When we talk of favorable outcomes in this context, we are not just talking about a windfall in the narrow sense of investment and finance, but success in the broadest possible sense of the term. A favorable outcome could also refer to e.g. the success of a new computer design, a weird angle on quantum physics, a new fitness regimen, or a new drinking joke. To the EP types, and especially the ENP types, success can be anything that expands the sum-total of what is commonly thought possible.

[2] Compare also Taleb’s adversity to specialization to the oft-observed tendency of ENP types to celebrate versatility over specialization. For example, in one of their papers, The Precautionary Principle (undated draft), Taleb and his cowriters isolate what they call the ”’Are you a biologist?’ fallacy,” pointing to how specialists are often blind to the wider implications of what takes place within their niche.

[3] We have singled out these aphorisms because they are conducive to the point we want to make. For a fuller view of Taleb’s propositions, we refer to the more quotes page.

[4] One may go further here and point out how Jung said that Fi frequently lends a certain poetic sentiment to the psyche (since ordinary means of expression can seldomly do justice to Fi), while indeed Socrates had a low opinion of poetry and art. (Psychological Types §639 cf. The Apology 22abc).

[5] Taleb: The Black Swan (Random House 2007) pp. 19-20

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