As regular readers here will know, I am a big fan of the philosopher Nassim Nicholas Taleb. So I was pleased to see the considerable attention that he has been gaining since the emergence of the credit crisis- the latest is a profile in the Times.
He follows in the sceptical traditions of Sextus Empiricus although possibly his determination to avoid prediction makes him reluctant even to describe the systems that he observes in Human behaviour. Perhaps this is part of the intrinsic problem of uncertainty- to describe certain conditions is also to change them. Perhaps more interestingly, he has also demonstrated the practical results of the sceptical mindset- not least in understanding risk within financial markets and in the wider world of economics. His view is clear: human beings are over confident in handling uncertainty- and the world is more uncertain than our brains expect. Humans try to determine patterns, and as a result they tend to see them, even when no pattern actually exists.
Thus in the financial markets Taleb, over several books such as Fooled By Randomness and The Black Swan, has pointed out the fallacies that lie behind most of the architecture of financial risk taking and which consistently leave investors underestimating their risk exposure.
As such, Taleb has become the prophet of the credit crunch. Yet his message is not automatically a pessimistic one. The point is to see the systems for what they are. Approaching the world in a sceptical way is a healthy response to a planet of infinite variables and open systems (rather than the planet our brains would prefer, one of fixed variables and closed systems).