On the Edge: The Art of Risking Everything

by Nate Silver

In a world forged not by the toil of human hands but by the computations of machines, those of us who understand the algorithms hold the trump cards.

“Edge” means having a persistent advantage in gambling—consistently making +EV bets.

A steelman argument—a favorite technique of EAs and rationalists—is the opposite of a strawman argument. The idea is to build a robust and well-articulated version of the other side’s position, even if it’s one that you disagree with.

Riverians worry that Villagers are stifling competition by increasingly focusing on equity of outcomes rather than equality of opportunity.

von Neumann was the single most important person behind the development of game theory. He was also a member in good standing of the River or whatever equivalent to it existed back then,

“Optionality” is a term used in game theory and finance to describe the value of being able to take advantage of future opportunities that might arise.

The Hour Between Dog and Wolf may be the most important poker book I’ve ever read—even though the book ostensibly has nothing to do with poker.

When you deviate from the optimal strategy in poker, it can potentially come back to bite you. If you try to exploit someone, you’ll risk being exploited yourself. So poker players often think about what the right play is in the abstract, assuming their opponents are also trying to make the best play. In game theory, there’s a sense of reciprocity—treating others as you wish to be treated.

the River is winning. It not only dominates Silicon Valley and Wall Street, but the nerds have taken over everything from baseball front offices to the casino business.

sentiment. In recent years, researchers have discovered that a large share of experimental results published in academic journals—the majority of results in some fields—can’t be verified when other researchers try to duplicate them. (This is called the replication crisis.)

Group decision-making is more likely to be wiser when members of the group are able to operate independently, reducing the potential for groupthink.

Silicon Valley does understand something about risk—something that most people in society don’t. It understands that a relatively remote chance is worth taking if it has a sufficiently high payoff.

I agree with Ethereum founder Vitalik Buterin, who wrote in response to Andreessen that “AI is fundamentally different from other tech, and it is worth being uniquely careful.”

Musk runs his businesses much like he plays poker. One of the reasons he became the world’s richest man is because he made an exceptionally aggressive compensation deal with Tesla that the conventional wisdom held “would be impossible to achieve.”

Society would be generally better off—I’ll confidently contend—if people understood the nature of expected value and specifically the importance of low-probability, high-impact events, whether they come in the form of fantastic potential payoffs or catastrophic risks.

those experts with a cluster of personality traits that Tetlock regarded as foxlike—knowing many little things—were comparatively more accurate.

here’s my theory of the secret to Silicon Valley’s success. It marries risk-tolerant VCs like Moritz with risk-ignorant founders like Musk: a perfect pairing of foxes and hedgehogs.

as someone who knows a thing or two about elections, suffice it to say that I’ve never found the claim that Trump won because of Facebook misinformation persuasive. The Times made a big deal of the fact that Russian hackers bought $100,000 worth of digital ads on Facebook, for instance—but this was a tiny fraction of the $2.4 billion spent during the election in total.

who winds up on the extreme right tail, the 0.0001 percent. It’s usually going to be people who are either irrationally risk-loving out of a sense of having nothing to lose, extraordinarily mission driven out of a sense of wanting to prove people wrong—or both, as in the case of Musk.

Almost by definition, the people at the very top of any leaderboard are both lucky and good. Which component predominates? In this poker example, luck is still the more important factor—and I suspect that’s true in Silicon Valley too, at least when it comes to achieving unicorn-type wealth.

what ought to worry the Village is that public opinion increasingly shares the River’s skepticism of it. Indeed, the Village has begun to look like a small island threatened by a rising tide of disapproval. The Democratic White House, usually an ally of the Village, had panned the performance of the university presidents.

America, in other words, has a lot of bored and frustrated young men with dubious economic prospects, and they were never more bored or frustrated than during the pandemic. Crypto—along with day trading and sports betting—offered the prospect of getting rich quickly.

Elon Musk can take $44 billion and burn Twitter to the ground, and he’ll still have $200 billion left over. By some technical definition this is a risky bet, but by another Elon is putting far less at stake than an immigrant who crosses the Rio Grande for an off-the-books job.

Effective altruism, and the adjacent but more loosely defined intellectual movement called “rationalism,” are important parts of the River on their own terms. In some ways, in fact, they are the most important parts.

I’m skeptical that a substantially more ascetic world would have higher overall utility.

I have a deep intuitive suspicion of moral philosophies that don’t involve reciprocity. By reciprocity, I mean that if I agree to live by a rule, other people agree to it too.

making testable predictions is one of the only ways to know whether you’re epistemically rational.

an undercurrent of apocalyptic fear that looms over this part of the River. Conversations about existential risk can be intense, obviously. People might displace their emotions, like poker players trying not to give tells away, but having these thoughts rattling around in your head can create cumulative stress. During the portions of the writing process when I was focused intently on nuclear or AI risk, I often didn’t sleep well.

even setting abortion aside, you’d think longtermists might express concern about the decline in fertility in industrialized countries, a question that some rationalists like Hanson have explored but EAs—80 percent of whom are childless, according to Alexander’s survey[*23]—rarely do, perhaps because it codes as conservative.

that’s also what makes these models scary. They’re doing smart things, but even the smartest humans don’t entirely understand why or how.

it’s not that machines can do things more powerfully than humans that’s disconcerting. That’s been true since we began inventing machines; humanity is not threatened because a Chevy Bolt is faster than Usain Bolt. Rather, it’s that we’ve never invented a machine that worked so well but known so little about how it worked.

if you asked me for my p(doom) on AI, I’d quote you a much wider spread, maybe literally something like 2 percent to 20 percent.

Most people won’t have fulfilling, meaningful jobs, and many will hand their decision-making over to AIs that purport to have their best interest in mind but instead trap them in a loop of button-clicking compulsions.

Although it’s artificially precise to peg the inflection point brought about by the Industrial Revolution to a single year, 1776 is as good a choice as any, said Deirdre McCloskey. That orbit around the Sun not only witnessed the Declaration of Independence, but also the publication of Adam Smith’s The Wealth of Nations, the foundational work of modern economics.

Instead of a bell curve of risk-taking where most people are somewhere toward the middle, you have Musk at one extreme and people who haven’t left their apartment since COVID at the other one. The Village and the River are growing farther apart.