Sublime

Think of it this way. In a bell curve type of situation, like displaying the distribution of height or weight in a human population, there are outliers on the spectrum of possibility, but the outliers have a fairly well-defined scope. You’ll never meet a man who is ten times the size of an average man. But in a curve with fat tails, like wealth, th

By then Laplace saw probability as the primary way to overcome uncertainty. Pounding the point home in one short paragraph, he wrote, “Probability is relative in part to this ignorance, in part to our knowledge . . . a state of indecision, . . . it’s impossible to announce with certainty.”17

Bayes’s rule as a way to update our belief in a particular hypothesis.

In fact, free-market capitalism and Bayes’ theorem come out of something of the same intellectual tradition. Adam Smith and Thomas Bayes were contemporaries, and both were educated in Scotland and were heavily influenced by the philosopher David Hume. Smith’s “invisible hand” might be thought of as a Bayesian process, in which prices are gradually