Nassim Nicholas Taleb. Fooled By Randomness: The Hidden Role of Chance in Life and in the Markets. New York: Random House, 2004. ISBN 0812975219.
Every moment of my life, I make bets with the universe. If it is cold, I bet it will stay that way for a certain amount of time, and I wear warm clothes. If I need to get somewhere, I bet my car will work (or take the bus or the train). If I enter a relationship with another person voluntarily, I bet its overall effect on my existence will be more positive than negative. If I feel hungry, I eat something (or don't), betting that eating (or fasting) will make me feel better. Sometimes, my bets pay off: I get more upside than downside from exposure to the reality I don't really understand. Eating (or fasting) makes me feel good. Other times, my bets do not pay off: I get more downside than upside from exposure to the reality I don't understand. Eating (or fasting) makes me sick.
Some time near the dawn of my adolescence, I picked up the idea that there exists out there in the universe a betting strategy that would provide only upside--no downside at all (or at least, no downside worth considering: the upside would be so good that it would always pay gamblers like me more than it cost). This idea was intuitive--it was a story I was inclined to tell myself by nature--and it was reinforced by my education, especially my religious education (which told me that my perfect betting strategy existed and was the restored gospel of Jesus Christ preached by the Latter-day Saints).
The LDS church (that I was brought up in) offered me a fixed strategy for making bets with the universe. If you reduce this LDS strategy down to its essence, it looks something like this: (i) never do anything you feel bad about (bad feelings are a sign from God that a bet is evil); (ii) follow the prophets, no matter what (the prophets will never lead the faithful astray: their bets will always yield more upside than downside). I placed many bets with this strategy over the course of my adolescence and young adulthood. Some of them paid off (more upside than downside). Others did not. I was told that the downside from these bad bets would even out eventually, that losses did not matter, that they were Satan trying to mislead me (away from the one true strategy for making bets with the universe). I should just take my losses, no matter what they were, and have faith that the upside would appear, eventually, and erase the debts that were starting to destroy my life's accumulation of moral capital. For a while, this rhetorical placebo worked ("eat your losses, and God will make them up to you"), but there came a moment in my life when it didn't--a moment when my losses were too catastrophic to be ignored, a moment when it was painfully clear to me that I needed to change some of my bets with the universe or go morally bankrupt. I had a moral crisis, what some call a crisis of faith.
Nassim Taleb tells my same story, in a different environment: Wall Street. In brief, some Wall Street traders are kind of like religious fanatics (of the species I represent). They make bets with the universe, as we all do, and when their bets are bad, they double down. "My betting strategy is perfect. I have constructed it painstakingly, rationally, conscientiously--and any losses I take will ultimately be offset by even larger profits!" Blah, blah. The worst of these traders were those who traded with others' money (e.g. investment bankers attempting to game the market with the life's savings of ignorant bank customers). These guys could lose all their clients' money several times over (as some of them did), still believe in the truth of their bad betting strategy (which after all remains as logical, precise, and mathematical after losing money as it was before), and (worst) walk away with their own fortunes intact (even if they could never get employment as traders after their catastrophic losses). These smug SOBs screwed their clients over, big time, and felt absolutely no compunction about doing it--because they believed uncritically in the absolute truth of their betting strategies. Every time I read this story I am struck with how relevant it is--not just to my religious life, but to life in general.
As a result of my personal experiences, including my encounter with Nassim Taleb's work, I have realized something important about myself. I don't trust any fixed betting strategy to deliver more upside than downside. I don't care who tells me a story: I do not ever want to bet on a single story being so true that I can accept it without criticism (without taking out insurance somewhere, for when it turns out to be false). When I was young, I believed in a universe of order--a just world that makes sense, rewarding the good and punishing the wicked (eventually). I no longer believe in that universe. I have seen too many good people go under, and too many successful morons (including evil morons). And I have learned that people all have different betting strategies (even individual LDS take the generic Mormon model and use it differently) and that these are all more similar than different. Mormonism is more like Catholicism or Protestantism or Islam or Buddhism or even atheism than it is unlike them. All -isms originate as ideas in the human mind, which leaves recognizable generic traces (no matter what particular story it tells in any given instance). When you look honestly into history, it is patently obvious that the human mind is not a key to clear understanding of absolute reality. Ideas are cheap. Logical, linear ideas creating logical, linear maps of reality are cheap: they appear all over the place (in Mormonism, Catholicism, Protestantism, Islam, Buddhism, atheism, and any other -ism anyone can think of ever). Results are what matter. Change your ideas to match the results, not the other way round. Ideas are like quicksand, inherently unstable and dangerous (no matter what they are or who has them or what methods he claims to use to get at them).
There is a fundamental insight here, something deeper than the silly ideological wars between competing -isms. The fundamental insight is that reality is an open, chaotic system, not a closed, orderly one. No matter how nice some story sounds in the classroom (or the chapel or the lab or the boardroom), it is guaranteed to be false in some way. Logic is nice, and we should use it, but we should also use our eyes. You can lie with logic (and math and science as these exist among human beings) as easily as with any other language (logic is a language, like math and Spanish and Latin). Some lies are more harmful than others. The worst lies are those that people don't question, those that escape recognition and get accepted as some kind of absolute, fundamental truth. The worst lie is the one that says you can make bets with the universe that have no downside, no unexpected results, no risk for doing real damage. Historically, there is no such thing as a bet with the universe that life wins unconditionally: all species go extinct, like all companies, churches, nations, and -isms. But the successful people never see this. The gamblers who staked it all and won don't realize that they win because they are lucky: they preach about how to succeed ("just make bets like I did! playing Russian roulette worked great for me, and if you have the right moral fiber, it will work for you, too!"). The losers know to question their strategies. They see that their smarts don't work, that their logic is flawed, that reality remains opaque to the human mind (whether that mind approaches it through Mormonism, Protestantism, Catholicism, Buddhism, atheism, or any other -ism: it doesn't matter which ideological horse you ride, you are never guaranteed to find happiness, at all). But the winners don't get it.
The winners talk about "intelligent design" as something real, and verifiable by recourse to simple observation. "See this awesome company I have built," Dick Fuld says of Lehman Brothers. "My partners and I had this great vision, and the brilliant piece of work you see before you is a result of our intelligent design" (the same kind of intelligent design that produces Paley's watch or Behe's cell or any other complex product of any process anyone wants to imagine). Then the thing unexpectedly goes bankrupt. What happened? Where is the intelligent design? Here apologists for the really just world I used to believe in typically come up with some kind of rational, logical deus ex machina to save their Intelligent Designer (whom we may as well call God) from being dumb the way all intelligent designers we see in history appear dumb. "My CEO is not fooled by randomness the way Dick Fuld was. Fuld was a loser, but my CEO is a winner. Read his latest book! It will show you how his design is really intelligent, fundamentally different from the flawed logic used by idiots like Fuld." You can ride this train as many times as you like, picking a new guru (a new Intelligent Designer) every time your old one blows up. If you're lucky, yours may never blow up (in your lifetime, anyway): you might be able to use his strategy to place bets that turn out well for you, randomly, because sometimes bets turn out well. Success happens (I almost added "unfortunately"). You can play Russian roulette and win--even win big: that doesn't make it a good strategy to recommend to others who want to enjoy your kind of success.
At the end of the day, I really like paganism--the extinct Greek and Roman variety, especially--as an -ism for modeling the way I see the world. The Greek god of just order is Zeus. He makes sure that good guys win and bad guys lose. But he is not omnipotent. The rest of his family have will too (and often oppose him directly), and there are always Titans looking to rebel and destroy his fragile, temporal order. In addition to all that, there lurks behind his throne the prophecy (preserved by Prometheus) that one day a son will overthrow him (the way he overthrew his father back in the day). He is a realistic kind of intelligent designer--a gambler who places bets (attempting to effect order) that will not always pay off. If there is a god ruling over the mess that is real life, this is what he looks like: he is not someone you can rely on for perfect stability. From my perspective, there is nobody you can rely on uncritically for perfect stability--no person, no ideology, and no god (whether gods are real or not: it doesn't matter). Real life is not about picking one strategy for placing bets and then insisting on that strategy dogmatically until you die (particularly if said strategy leads you to blow up: it would be sheer madness to continue killing yourself merely for an idea--no matter how pretty or logical it might appear).
I don't see myself as an opponent of religion or science, per se. I don't have a problem with people placing bets that they like with the universe. But I am a resolute opponent of people who think they have discovered "the secret" to winning Nature's game. I mistrust priests and scientists. I think it a virtue to doubt them, not embrace them and their (dangerous) ideas uncritically. The best among them share my fear (and take measures to prevent their inevitable mistakes from hurting other people unnecessarily); the worst demand respect that they never earn (trying to bully me into making the bets they would on the grounds that they are "smarter" than I am because of some stupid ideology they like, an ideology which might be religious or scientific, Mormon or non-Mormon, skeptical or not: it doesn't matter, and I don't care). In short, my moral crisis did not lead me to change allegiance from one god to another (who might be the devil). What changed for me was the way in which I look at all gods, especially when they come to me strongly recommended by people looking to influence my moral behavior. I mistrust people (including myself). I think people are fools--lovable fools when they get their own lives wrong, dangerous fools when they try to make me make the same mistakes they are making because some god (or non-god) wills it. Authoritarian bastards are authoritarian bastards, no matter what rhetoric they use to make themselves (and their followers) feel good about it. I don't follow any of them (until I have to, because they will kill or ostracize me otherwise, and I want to live). I don't love them. I don't agonize over whether we should pick one over another (voting for the lesser of two evils). They are all bastards. They are all dangerous. I am always against them, no matter what nifty rhetorical guise they use to cover up their bullshit. They can be as religious or scientific as they please. They can plead priesthood or democracy or logic or whatever the hell they want, and I will still refuse to bend the knee. They can nail me to a rock and have the eagle tear my liver (as Zeus did to Prometheus), and I will die despising them for it.