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First published in 2012 by The Penguin Press, a member of Penguin Group (USA) Inc.
Copyright © Nate Silver, 2012 All rights reserved
Illustration credits Figure 4-2: Courtesy of Dr. Tim Parker, University of Oxford
Figure 7-1: From “1918 Influenza: The Mother of All Pandemics” by Jeffery Taubenberger and David Morens, Emerging Infectious Disease Journal, vol. 12, no. 1, January 2006, Centers for Disease Control and Prevention
Figures 9-2, 9-3A, 9-3C, 9-4, 9-5, 9-6 and 9-7: By Cburnett, Wikimedia Commons Figure 12-2: Courtesy of Dr. J. Scott Armstrong, The Wharton School, University of Pennsylvania
LIBRARY OF CONGRESS CATALOGING IN PUBLICATION DATA
Silver, Nate. The signal and the noise : why most predictions fail but some don’t / Nate Silver.
p. cm. Includes bibliographical references and index.
ISBN 978-1-101-59595-4 1. Forecasting. 2. Forecasting—Methodology. 3. Forecasting—History. 4. Bayesian statistical decision theory. 5. Knowledge, Theory of. I. Title.
CB158.S54 2012 519.5’42—dc23 2012027308
While the author has made every effort to provide accurate telephone numbers, Internet addresses, and other contact information at the time of publication, neither the publisher nor the author assumes any responsibility for errors, or for changes that occur after publication. Further,
publisher does not have any control over and does not assume any responsibility for author or third-party Web sites or their content.
No part of this book may be reproduced, scanned, or distributed in any printed or electronic form without permission. Please do not participate in or encourage piracy of copyrighted materials in violation of the author’s rights. Purchase only authorized editions.
To Mom and Dad
CONTENTS
Title Page
Copyright
Dedication
Introduction
1. A CATASTROPHIC FAILURE OF PREDICTION
2. ARE YOU SMARTER THAN A TELEVISION PUNDIT?
3. ALL I CARE ABOUT IS W’S AND L’S
4. FOR YEARS YOU’VE BEEN TELLING US THAT RAIN IS GREEN
5. DESPERATELY SEEKING SIGNAL
6. HOW TO DROWN IN THREE FEET OF WATER
7. ROLE MODELS
8. LESS AND LESS AND LESS WRONG
9. RAGE AGAINST THE MACHINES
10. THE POKER BUBBLE
11. IF YOU CAN’T BEAT ’EM . . .
12. A CLIMATE OF HEALTHY SKEPTICISM
13. WHAT YOU DON’T KNOW CAN HURT YOU
Conclusion
Acknowledgments
Notes
Index
T
INTRODUCTION
his is a book about information, technology, and scientific progress. This is a book about competition, free markets, and the evolution of ideas. This is a book about the things that make us smarter than any computer, and a book about human error. This is a book about how we learn, one step at a time, to come to knowledge of the objective world, and why we sometimes take a step back.
This is a book about prediction, which sits at the intersection of all these things. It is a study of why some predictions succeed and why some fail. My hope is that we might gain a little more insight into planning our futures and become a little less likely to repeat our mistakes.
More Information, More Problems
The original revolution in information technology came not with the microchip, but with the printing press. Johannes Gutenberg’s invention in 1440 made information available to the masses, and the explosion of ideas it produced had unintended consequences and unpredictable effects. It was a spark for the Industrial Revolution in 1775,1 a tipping point in which civilization suddenly went from having made almost no scientific or economic progress for most of its existence to the exponential rates of growth and change that are familiar to us today. It set in motion the events that would produce the European Enlightenment and the founding of the American Republic.
But the printing press would first produce something else: hundreds of years of holy war. As mankind came to believe it could predict its fate and choose its destiny, the bloodiest epoch in human history followed.2
Books had existed prior to Gutenberg, but they were not widely written and they were not widely read. Instead, they were luxury items for the nobility, produced one copy at a time by scribes.3 The going rate for reproducing a single manuscript was about one florin (a gold coin worth about $200 in today’s dollars) per five pages,4 so a book like the one you’re reading now would cost around $20,000. It would probably also come with a litany of transcription errors, since it would be a copy of a copy of a copy, the mistakes having multiplied and mutated through each generation.
This made the accumulation of knowledge extremely difficult. It required heroic effort to prevent the volume of recorded knowledge from actually decreasing, since the books might decay faster than they could be
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