Fooled by the black swan

People worry more about threats against which we feel powerless, like a disease for which there is no vaccine and which has a high fatality rate if you get it.

people worry more about threats the more available they are to their consciousness—that is, the more aware people are of them.

causal explanations are oversimplifications

our theories about a particular cause and effect are inherently perceptual, infected by all the sensory cheats of vision

searching for correlations is a terrible way of dealing with the primary subject of much modern research: those complex networks at the centre of life

scientists have mostly managed to work around this mismatch as they've continued to discover new cause-and-effect relationships at a blistering pace. This success is largely a tribute to the power of statistical correlation, which has allowed researchers to pirouette around the problem of causation. Though scientists constantly remind themselves that mere correlation is not causation, if a correlation is clear and consistent, then they typically assume a cause has been found -- that there really is some invisible association between the measurements.

the reliance on correlations has entered an age of diminishing returns

all of the easy causes have been found, which means that scientists are now forced to search for ever-subtler correlations, mining that mountain of facts for the tiniest of associations

a cause is not a fact -- it's a fiction that helps us make sense of facts

a cause is not a fact, and it never will be; the things we can see will always be bracketed by what we cannot

the average cost per approved molecule will top $3.8 billion (£2.46 million) by 2015. What's worse, even these "successful" compounds don't seem to be worth the investment.

We assume that more information will make it easier to find the cause

Our habits of visual conclusion-jumping take over. All those extra details end up confusing us; the more we know, the less we seem to understand.

a small subset of "nonspinal factors", such as depression and smoking, were most closely associated with episodes of pain

Given the increasing difficulty of identifying and treating the causes of illness, it's not surprising that some companies have responded by abandoning research.

We live in a world in which everything is knotted together, an impregnable tangle of causes and effects. Even when a system is dissected into its basic parts, those parts are still influenced by a whirligig of forces we can't understand or haven't considered or don't think matter.

Although our reliance on statistical correlations has strict constraints -- which limit modern research -- those correlations have managed to identify many essential risk factors, such as smoking and poor diet.

the R&D to discover a promising new compound now costs about 100 times more (inflation-adjusted) than it did in 1950. It also takes nearly three times as long.

even when we know everything about everything, we'll still be telling stories about why it happened

free-market capitalism has left the global economy more unstable

"In conventional economic theory, it is thought that we are born as perfectly formed, rational, self-serving agents. But where you work and what kind of work you do are important in determining your character."

the effects of not having equality of outcome are felt by the next generation

"Financial innovation + inadequate regulation = recipe for disaster is also the favored explanation of Greenspan's successor, Ben Bernanke

fallacies of free-market fundamentalists

the economy fell prey to recurring delusions about risk and bubbles

globalization spread the toxicity from one country's mortgage market to the rest of the world

the free market itself is to blame for the recent troubles

most libertarians and Wall Street Journal editorial page contributors continue to insist that government caused the whole ordeal

after the West won the Cold War, capitalism could go naked

Conservative economists—ever worried about inflation—tend to fault Greenspan for keeping interest rates too low between 2003 and 2005 as the real estate and credit bubbles inflated.

prices are almost always imperfect for a number of reasons, ranging from lack of information to ignoring costs such as pollution

The theory of unintended consequences states simply that whatever we do in a complex system will have a range of consequences we did not intend and could not forecast because of our lack of knowledge.

the most important events in the future are the largest events and these we cannot forecast.

it would be stupid to discard carbon markets provided they are considered as only one innovation amongst many other areas which require innovation including education, law, business, technology etc.