Do people commit the conjunction fallacy even after having been warned of the conjunction fallacy?
Earl Warren tumbled headlong into the standard conspiracy theory attractor with, I might add, no deleterious effect on his career. This man was later the 14th Chief Justice of the US Supreme Court and has probably had more lasting effect on US society than any single figure of the 20th century. Thanks for the post.
Eliezer, your use of the term 'risk free bonds rate' is confusing. There is clearly no such thing a risk-free bond, so the notion of a risk-free bond rate doesn't seem to make sense. True, it's not impossible to lose money in short treasuries, but this has nothing to do with what's more commonly known as the 'risk-free rate' in modern portfoio theory.
The 'risk-free rate' is simply shorthand used to refer to a particular input to modern asset valuation models. It says nothing about a given security's total inflation-adjusted return, nor is it a conclusion drawn from a given government's past default history. The interest paid on short treasuries is considered risk-free in the limited context of asset valuation simply because a government can theoretically print as much money as it needs to pay the coupon.
That said, you're also correct to point out that in English the descriptor 'risk-free' suffers from imprecision. But this is just what happens when the shorthand names for inputs to mathematical models bleed over into the vernacular. That is, from a semantic standpoint 'risk-free' doesn't mean risk-free.
And I can certainly appreciate your poke at Taleb for not explicitly acknowledging potential black swan events affecting short treasuries. But as you know, he assumes you want positive returns on your money and is suggesting what he sees as the most optimal balance between risk and return in a 100% invested portfolio. Not that he's right or wrong about any of it.
These last couple of posts on definitions have been very good.
Another definitional strategy prone to abuse is coinage or creation of neologisms, sometimes used to sneak assumptions into a debate that would require significant support otherwise.
For one example, I have noticed the use of the term 'technoscience' or 'technoscientific' in rhetoric concerning science and technology. The use of this term is striking given the pretty obvious differences between science and technology as domains and activities in the real world. One must be making a very imprecise point for it to apply equally well to both science and technology in one breath. Use of this term might be nothing more than a symptom of this imprecision, but can also be thought of as stipulating an unsupported conclusion in itself. That is, anyone meeting the argument on its terms implicitly agrees that technology and science are identical for purposes of reasoning about them.
There are many other examples, I'm sure.