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The Actuary The magazine of the Institute & Faculty of Actuaries

The Blind Spot, William Byers

children with duck, Getty

Publisher Melville House Publishing

ISBN 9781612191812

RRP £14.99

William Byers’ The Blind Spot is a fascinating examination of science and modelling. The Canadian mathematics professor explores the implications of the fact that we certainly do not, and probably cannot, have perfect understanding of many areas of our lives where we tend to assume that we do. The ‘blind spot’ of the title denotes that gap between reality and our understanding of reality.

Rather than risk being tediously eulogistic in reviewing this excellent book, I thought it might be of more interest to offer an overview of Byers’ thesis in his own words:

The existence of an inevitable ‘blind spot’ in our scientific theories, an unavoidable incompleteness in our description of reality … arises out of human consciousness itself, and is rooted in the biology of the brain … specific breakthroughs in science and mathematics have revealed this blind spot. Modern scientific thought is permeated with the discovery of the uncertain in various guises.

Clearly, a philosophy of science must begin with what is real. However, science is not identical to reality; science is a description of reality. What we need to do is investigate the relationship between the description and the reality that stands behind it.

The existence of that which is real but cannot be understood poses a major challenge to our usual way of thinking about the world and to our thinking about the relationship between human beings and the natural world. There are intrinsic limitations in our ability to pin down reality in concepts and symbols.

Human beings have a basic need for certainty. Yet, as things are ultimately uncertain, we satisfy this need by creating artificial islands of certainty. We create models of reality and then insist that the models are reality. It is not that science, mathematics, and statistics do not provide useful information about the real world. The problem lies in making excessive claims for the validity of these methods and models.

Algorithms, mathematical formulae, and equations provide the promise of certainty. The aura that science provides – precision and objective truth – migrates over into the field of finance. If certainty in the financial world is unobtainable, it is still possible to package the illusion of certainty – the package consists of precisely those algorithms and equations, not science but the mythology of science, not certainty but pseudo-certainty.

Quantitative reductionism is one of the main elements behind the financial crisis. People have allowed complex, mathematical-based formulas to obscure human intuition and judgment. The process of quantification in its attempt to ‘capture’ a given situation actually modifies that situation – it does not ‘capture’ reality so much as it creates a new reality.

Many people will be surprised by the assertion that some things cannot be understood. These people inhabit what I will call the ‘culture of certainty’, imagining that science proceeds by totally mastering some particular bit of reality before moving on to the next bit in the way an army conquers foreign terrain. The ‘army’ in this case would be [human] rationality itself – this brings to mind a statement by the philosopher Abraham Heschel: “What characterises man is not only his ability to develop words and symbols but also his being compelled to draw a distinction between what is utterable and the unutterable, to be stunned by what is but what cannot be put into words.”

Many failures can, with hindsight, be traced back to some form of blind spot – in military, financial and scientific contexts. What this book does is to help us function in a world where such blind spots always exist.

Byers ends in the foothills of the mountain that Nassim Nicholas Taleb, author of The Black Swan, scales more explicitly, and far more violently, in his latest book, Antifragile. To live well, we need to find a way to thrive on uncertainty. Byers’ final pages offer his solution: humility and personal engagement as opposed to abrogation or delegation to experts. In this way, “the world of the uncertain is the world of creative possibilities. It is the world of freedom, the world of wonder”.

Matthew Edwards is a senior consultant at Towers Watson. He is co-author of the recent prize-winning SIAS paper ‘The Philosophy of Modelling’.