Book Review: ‘On the Edge,’ by Nate Silver

Silver’s disillusionment seems strongly tied to 2016 and the “nits” (normal, risk-averse people) who mistook his election projection that year (Hillary Clinton at a 71 percent chance of victory over Donald Trump) as a prediction instead of a probability. “From my standpoint — and from the standpoint of people in the River,” he writes, “this was a damned good forecast.” True: Others gave Trump even lower odds.

In an inversion of the classic morality tale, Silver’s recovery has been a return to vice. “My Big Midlife Crisis Project,” he wrote in a recent blog post, “has been trying to fashion myself into a pretty darn good tournament poker player.” He has even ditched his ill-fitting suit and glasses for a more flattering baseball cap and beard. (Don’t worry, he is also still producing election forecasts this year for his newsletter Silver Bulletin.)

Now that he’s back to his roots, Silver mostly wants to celebrate his tribe. But what about someone like Sam Bankman-Fried, one of the best-known boosters of effective altruism and rationalist risk-taking as well as a convicted fraudster? Silver, who interviewed Bankman-Fried five times for this book, considers the crypto financier turned felon to be a false prophet. In a memorable chapter full of verbal sparring between the two quants, he confronts Bankman-Fried with all the ways that he was, in fact, highly irrational in his approach to risk. That (for Silver) seems almost as unforgivable as the $8 billion he stole from his customers.

Other potential conflicts in the logical universe of the River are more troubling to Silver. While not a work of political economy, “On the Edge” ultimately presents an unsympathetic vision of capitalism’s future. If wealth once belonged to those with industrial monopolies, Silver suggests, we are now headed toward a hyper-charged capitalism powered by artificial intelligence, in which the spoils disproportionately belong to those who understand risk. The economy might, he warns, become even “more casino-like: gamified, commodified, quantified, monitored and manipulated, and more elaborately tiered between the haves and have-nots.”

Silver seems exactly right to project a future that belongs to those in a position to take risks. Were he a Marxist perhaps he’d say that the class divide is now between those who fully benefit from expected value calculations and those who do not. Billionaire venture capitalists like Marc Andreessen and Peter Thiel, both of whom make appearances in “On the Edge,” have figured out their edge — how to never lose money in the long term. They are enjoying the enormous returns that are available from intelligent risk-taking.