The Logic of Miracles: Making Sense of Rare, Really Rare, and Impossibly Rare Events

by Laszlo Mero, Márton Moldován (Translator), David Kramer (Editor)

We live in a much more turbulent world than we like to think, but the science we use to analyze economic, financial, and statistical events mostly disregards the world’s essentially chaotic nature. We need to get used to the idea that wildly improbable events are actually part of the natural order. The renowned Hungarian mathematician and psychologist László Mérő explains how the wild and mild worlds (which he names Wildovia and Mildovia) coexist, and that different laws apply to each. Even if we live in an ultimately wild universe, he argues, we’re better off pretending that it obeys Mildovian laws. Doing so may amount to a self‑fulfilling prophecy and create an island of predictability in a very rough sea. Perched on the ragged border between economics and complexity theory, Mérő proposes to extend the reach of science to subjects previously considered outside its grasp: the unpredictable, unrepeatable, highly improbable events we commonly call “miracles.”

Genres: Nonfiction, Mathematics

288 pages, Hardcover

Published April 17, 2018

Reviews

[Aron · Rating 5 out of 5]

Over 20 years ago I picked up Méro’s Moral Calculations after reading a review. It turned out to be one of those books that changed how I view the world In profound way. I often think about the ideas in the book but recently I started obsessing about the author and title which I couldn’t remember. A frantic search finally helped me find both and then I began to wonder if he had written anything else. Which led me to this book which I immediately bought on iBooks.

I was not disappointed. Here is yet another book that changed how I view the world profoundly. While written two years ago, it’s the perfect book for pandemic times, because it is also about unexpected events and how we should deal with them.

It surprised me some people gave this book two stars and I’m the first five stars. Perhaps they picked up this book thinking it was some religious text. Quite the contrary. Méro brings to life ideas from the frontiers of math and science and makes them relevant to our daily lives. He excels at making these very complicated ideas clearly understandable and at forcing you to think carefully about your assumptions regarding how the world works. If you have an European enlightenment mindset and enjoy thinking hard about the world, your life, and your place in it, then this book will be a deeply pleasurable and rewarding read.

[Robert Zhang · Rating 5 out of 5]

Generally thought provoking. My highlights:
- the author introduces a mildovian (gaussian distribution with limited tails) world which we live in most of the time, and a wildovian world (gauchy distribution with no standard deviation) where black swans are possible
- if you are not a communist by age 20, you have no heart. But if you are still one at 30, you have no brain
-80/20 rule is prevalent across the universe. 80% of wealth held by 20% of individuals. 80% of population held by 20% of terrain. 80% of total mass in the universe in 20% of stars. 20% of all forest fires consume 80% of all trees destroyed by fires
-a mathematician is a device for turning coffee into theorems (lol!)
-at its heart, options trading developed for the commodity buyer/seller. Assuming mildovian pricing, these costs are tenable. With wildovian pricing these options are impossible to price and are worth infinite. Ironically, in a world where we price options using wildovian pricing, this would cause our world to become more wildovian
-scale invariance is the concept that a phemenon or pattern over time looks the same as it does through any length of time. Examples include stock market charts (daily vs annual vs decade time periods are indistinguishable). One of these ideas got me thinking: is there a way to model black swan probabilities in markets using data from another field that has a longer lookback history? like the weather for example
-it is generally not our close friends that help us find jobs. because these strong 'nodes' are ones where we are likely already connected to the network. It's the tangential acquaintances that are more likely to help us because they expand our network
-comparative advantage is the concept that we should not necessarily compete in the fields where we have the highest absolute advantage, but the one where we are comparatively better. for example, if I am very good at sports and want to get a college scholarship, I could go play soccer but then I would be competing against kids that have been training their whole lives. I could go for volleyball instead where there is less focus and competition. This may be especially challenging for those people gifted in many things, because the traditional thought is to compete in the popular sports
- resilience/antifragility- generally opposite of fragile is thought to be solid, or unbreakable. but truly the opposite of fragile is something that grows stronger if you break it.
- "I would not advise any college student to choose a career path according to the demands of today's market. Who knows what the demand will be tomorrow? I would say instead, "it almost doesn't matter what you study. Just take it seriously, learn the interrelations of things and ideas; and however the world may turn, you will be in demand, because you will be able to apply your broad knowledge and skills to a variety of situations"

[Balazs Borbely · Rating 5 out of 5]

A truly remarkable, but by many readers misunderstood, significant message.

Mérō’s highly emphatic storytelling turns this extraordinary collection of seemingly non-related ideas into a an enjoyable and deeply human message.
It’s NOT a critique of N.Taleb’s Black Swan, but rather develops SOME of Taleb’s concepts and theories - and doesn’t waste too many words on those that it cannot support.
Highly recommended reading for anyone who is interested in the possibility of making the survival of mankind possible despite the impossibility of seeing black swans of the future soon enough to mitigate their destructive effects.