How Gambling Defines Our Modern, Loving World
If you were to watch “Moneyball” today, you might find it entertaining. You might remember this fact: In a world before “data-driven decisions” were the norm, a lovable character played by Jonah Hill helps create a baseball lineup from a spreadsheet, defeating teams better supported by funds that still rely on traditional scouts. These types of old-school baseball were preoccupied with the past – more concerned with the player’s jaw and how the ball “explodes” than with on-base percentage and hard statistics.
Fifteen years later, algorithms have taken over everything from baseball to politics to research, and the limitations of “software eating the world” are becoming increasingly clear. . Kamala Harris’ presidential campaign is based on emotion and being “cool,” rather than well-articulated policies. Despite our access to information and powerful modeling software, there is an ongoing problem of scientific study. Our social media feeds are targeted and addictive, but ultimately frustrating.
Enter Nate Silver, statistician, political scientist, and poker player. His new book, Finally: The Art of Risking Everythingis much different than “Moneyball,” eschewing the cult of data geeks and their disdain for human cognition. Instead, he uses poker to show how to live in today’s complex world. Statistical models have elevated the game, but good players combine these odds with their human instincts to make the right play.
River and City
For many people, Nate Silver builds a variety of options. He came to prominence by correctly predicting all 50 states in 2012, and is a popular figure again as the November election approaches.
He’s a Democrat, but he’s not a political junkie: He openly warned about Biden’s years as an electoral liability back in September, and his exemplary earnings over participation. For now, he has the race as he is riding high by a small margin over Harris. He tries hard to be a “heterodox” thinker. To put it another way, he sees himself as a member of the “River” as opposed to the “City.”
Silver coined “The River” to mean “an ecosystem of people and ideas,” represented in Silicon Valley, Las Vegas, and Wall Street. These are analytical, competitive, risk-averse people. Think Elon Musk, Peter Thiel, and even Silver himself.
Riverians are pluralistic, support market competition in general, and are concerned with winning the best opinion (and thus confused by the politics of information and management). Perhaps it should come as no surprise that more Riverians have come out behind Trump than Harris, whose love of salad makes him sound like a career politician.
Silver compares the River to The Village, which are essentially left-wing institutions in the colony, such as the administrative government, the school and the press. The city is concerned with equality, as opposed to equality of opportunity. This often leads to a push for free speech, the free market, and diversity of opinion. Increasingly, River and City are at war, whether it’s Lina Khan at the FTC or The New York Times suing OpenAI.
A Whole New World
By focusing on niche activities like poker and high-end gambling, Silver is doing something rare in the internet age—telling a modern, fresh and exciting story. He introduces readers to some of the world’s best players, debunks the allegation of poker cheating, and tells the story of his own foray into sports betting.
The bottom line is that gambling is a tough way to make money. Riverians, whether VCs or sports bettors, think about expected value, asking questions like: how likely is this event, and how big is the payoff? Slot machines have the worst odds (also the worst for hook users), but even poker, with the best odds, is a small game. The best players only win in the long run. The edges of sports betting can get worse.
Silver is an educated fan and builds predictions for a living, however here are his totals for the 2022-23 NBA season: “I bet a total of $1,809,006. And I finished the next year with $5,242 – for a small ROI of 0.3 percent. how much in any game.
There’s a famous line in “Rounders,” “If you can’t see a cynic in the first half hour at the table, then you’re the sucker.” This certainly applies to sports betting. If they let you put money down, you’re probably the one who’s breastfeeding.
SBF Post-Mortem
Most of Sam Bankman-Fried’s stories focused on his alleged polyamory and drug use, his questionable commitment to altruism, and the sheer stupidity of it all. When Sam’s dad sent an email to complain about his salary at FTX, he started by saying, “Gee, Sam” and threatened to get Sam’s mom involved.
What most reports miss is how a Riverian can evaluate the King of Geeks. Silver decides that SBF is more specific to his insatiable appetite for risk than his necessities.
Most ordinary people have less spending power as they earn more money, and this makes them more cautious. Betting your life on the Super Bowl makes sense when it’s $1,000 instead of $1,000,000. But SBF didn’t look at gambling like that. Instead, he viewed caution from the rich as a missed opportunity.
Approaching life like a spreadsheet (behavior as an efficient person and business as a risk-taker), he concluded that his “utility function” was “close to the limit.” Wealthy people who are not willing to risk financial ruin are missing out on great opportunities. So Friedman stepped in with a low-odds, very strong bet on FTX. And he lost. Well.
Aspire
Silver closes by assessing the danger of AI, which seems poised to kill us, set us free, or become the most extreme technology of all time. A thinker like him wants to map out the possibilities, and decides that the potential to raise global living standards and reverse our economic recession justifies letting OpenAI, Anthropic, and Google to proceed quickly.
Now, unsatisfyingly and confusingly, he calls for greater union, pluralism, and reconciliation as we plan our future, which is Silver’s refinement of liberté, égalité, and fraternité. The only problem is, the Big Tech companies that develop these technologies are often the ones who violate the law, freedom of expression and public health. It seems absurd to expect them to be more responsible as they accumulate more and more power and thus become less responsible.
However, we have to make decisions, invest our money as we face an uncertain, risky future. Who knows what 2030, 2050 will look like? Silver closes the book with a common phrase among poker players: “Glgl.” Good luck, good luck. We will need it.
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