Thursday, July 5, 2012

Logical Fallacy of the Week, Week 34: Ludic Fallacy

By Rich Kozlovich,

I have been remiss in posting these fallacies of the week because I have a job that interferes with my life and this is the busy season in pest control.  I am explecting to start back with everything in August. 

In the case of many of these fallacies it seems almost impossible to see any practical value to them, and in point of fact there are fallacies that the originators have trouble explaining. However, this one is one of the more interesting fallacies and is worth the effort. It exemplifies five things in my opinion. No one is smart enough to equate everything on any given subject; no one has all the facts, and in point of fact knowing all the facts of any given subject is impossible; no one can anticipate the unanticipated; and finally….unanticipated things will always occur. So then, the question that remains should be obvious to the most casual observer. How can any small group of ‘elite’, no matter how smart or knowledgeable be capable of making all the decisions for the rest of humanity? They can’t! That is why central planning is always a failure.   Let's take one perfect example....military strategies. 

All military strategies are flawless ...until the meet the enemy.  The Schlieffen Plan was flawless as long as the German Army kept the number count at a certain level in a certain area.  They clearly thought this was absolutely going to happen, ergo the plan was flawless.  Until they discovered that the Russian army attacked on the Eastern Front before they were fully mobilized, pulling needed troops from the Western Front, and were startled at how quickly the British entered the war.  Now they didn’t have enough troops on the Western Front to overcome the French and the British.  All unanticipated occurrences by the finest military thinkers on the planet at the time.  They had the same problem that all elitists have; they fell in love with their own thinking and discredited the thoughts of all others. A common fault of the left.  One more point.  In 1870 Germany was the geographic center of socialism and socialist thinking.  One more...one more point.  Fascism is the right wing of socialism and communism is the left wing, but they are sides of the same coin. 

At any rate...please expore and think about this one, and please see the examples. 

Ludic Fallacy

The ludic fallacy is a term coined by Nassim Nicholas Taleb in his 2007 book The Black Swan. "Ludic" is from the Latin ludus, meaning "play, game, sport, pastime."[1] It is summarized as "the misuse of games to model real-life situations."[2] Taleb explains the fallacy as "basing studies of chance on the narrow world of games and dice."[3]

It is a central argument in the book and a rebuttal of the predictive mathematical models used to predict the future – as well as an attack on the idea of applying na├»ve and simplified statistical models in complex domains. According to Taleb, statistics works only in some domains like casinos in which the odds are visible and defined. Taleb's argument centers on the idea that predictive models are based on platonified forms, gravitating towards mathematical purity and failing to take some key ideas into account:

Example 1: Suspicious coin
Example 2: Job interview
Example 3: Stock returns

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