Poker Pros, Crypto Kings, and Tech Titans: Nate Silver’s Guide to “The River”

I’m sure that many of you will know me for my analysis of American elections. But here’s something you might not know: In covering politics, I’ve always felt like a fish out of water.

I played poker professionally before I ever wrote a word about politics or built an election model. I still feel more at home in a casino than at a political convention. I have the numbers of dozens of top poker players in my contacts list—but few people who work in politics or government. In fact, even my decision to start FiveThirtyEight, which I founded in 2008 and worked for until 2023, was an unexpected consequence of a law passed by Congress that ended my 3-year tenure as a professional poker player.

I’ve spent most of the past three years immersed in a world that I call The River. The River is a sprawling ecosystem of like-minded people that includes everyone from low-stakes poker pros just trying to grind out a living to crypto kings and venture-capital billionaires. It is a way of thinking and a mode of life. People don’t know very much about the River, but they should. Most Riverians aren’t rich and powerful. But rich and powerful people are disproportionately likely to be Riverians compared to the rest of the population. Given everything has taken place over the last six years—poker cheating scandals; Elon Musk’s transformation from rocket-launching renegade into ‘X’ edgelord; the spectacular self-induced implosion of Sam Bankman-Fried—you’d think The River had a rough few years. But guess what: The River is winning. Silicon Valley and Wall Street are still accumulating more and more wealth. Las Vegas is taking in more and more money. In a world forged not by the toil of human hands but by the computations of machines, those of us who understand the algorithms hold the trump cards.

My mission here is to give you a tour to The River. People in The River have trusted me to tell their stories because—let’s be honest—I’m one of them. Their way of thinking, for the most part, is my way of thinking. But I also hope I can highlight some of the flaws in their thinking. Because if you’ll pardon the cliche, The River isn’t all fun and games. The activities that everyone agrees are capital-G Gambling—like blackjack and slots and horse racing and lotteries and poker and sports betting—are really just the tip of the iceberg. They are fundamentally not that different from trading stock options or crypto tokens, or investing in new tech startups. The River is full of tributaries and niches, and not all of the people in The River would describe themselves as gamblers. But the various regions of The River have a lot in common, and there are many connections between people in different parts of the environment: hedge-funders who play poker, sports bettors who become entrepreneurs, crypto billionaires who pal around with Oxford philosophers that take a mathematical approach to studying the human condition. The River is not one discrete place so much as an ecosystem of people and ideas. Residents in different parts of The River don’t necessarily know one another, and many don’t think of themselves as part of some broader community. But their ties are deep, they speak one another’s language, through terms like expected value, Nash equilibriums and Bayesian priors.

So what makes one a member of the River?

First, there’s what I call the cognitive cluster. Quite literally: How do people in The River think about the world? It begins with abstract and analytical reasoning. These terms get thrown around a lot, so it’s important to consider exactly what they mean. The root words of the term “analysis” mean to break up, loosen, divide or cut apart—so analysis essentially means to resolve something complex into simpler elements. In regression analysis, for instance—probably the most widely-used statistical technique in data science—the idea is to attribute a complex set of observations to relatively simple root causes. For instance, a barbecue restaurant in Austin looking at its sales could run a regression analysis to adjust for factors like the day of the week, the weather, and whether there was a big sporting event in town.

The natural companion to analytic thinking is abstract thinking—that is, trying to derive general rules or principles from the things you observe in the world. Another way to describe this is “model building.” The models can be formal, as in a statistical model or even a philosophical model. Or they can be informal as in a “mental model,” or a set of heuristics (rules-of-thumb) that adapt well to new situations. In poker, for instance, there are millions of permutations for how a particular hand might play out and it’s impossible to plan for every one of them. So you need some generalizable rules, e.g. “don’t try to bluff out opponents who have already put a lot of money into the pot.” Those rules won’t be perfect, but as you gain more experience, you can develop more sophisticated ones (“don’t try to bluff out opponents who have already put a lot of money into the pot unless it’s likely they were on a flush draw and the flush didn’t come in”).

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Analysis and abstraction are the essential steps when trying to draw conclusions from any sort of statistical data. The real world is messy, so first you use analysis to strip out the noise and break it down into manageable components; then you use abstraction to put the world together again in the form of a model that retains the most essential features and relationships. At the barbecue restaurant, for instance, maybe you raised prices in August and wanted to see the effect this had on sales. To your surprise, sales actually increased. What happened? Maybe it was your new dry rub? Well, maybe. But probably it was that August was the month when University of Texas students return to town. Statistical modeling—looking at past sales patterns—can usually account for this. This is not easy as it sounds and there are many ways it can go wrong. But nearly all professions in The River, including the more philosophical ones, involve some attempt at model-building.

A third attribute in the cognitive cluster is decoupling, which might be less familiar to you. It’s really just the same thought process as applied to philosophical or political ideas. As Sarah Constantin puts it, decoupling is: “The ability to block out context . . . the opposite of holistic thinking. It’s the ability to separate, to view things in the abstract, to play devil’s advocate.” Decoupling has been found by the psychologist Keith Stanovich to correlate highly with performance on certain tests of logical and statistical reasoning, a type of intelligence that is valued in The River.

I think of decoupling as the tendency to make “Yes, but—” statements. Let me give you a mildly spicy example of a “Yes, but—” statement. Imagine a liberal saying the following:

Yes, I disagree with the Chick-Fil-A CEO’s position on gay marriage, but they make a damned fine chicken sandwich.

This is decoupling. Note that the speaker is not necessarily going to eat at Chick-Fil-A. For all you know, she might even reveal in the next sentence that she’s boycotting them despite how tasty the sandwiches are. But she’s saying the CEO’s politics have nothing to do with the quality of the food; she’s decoupling them. This type of thinking comes naturally to people in The River. It tends to be highly unnatural when most people discuss politics, however—particularly on the political left in the United States, the tendency is to add context rather than remove it based on the identity of the speaker, the historical provenance of the idea, and so forth. This is a big part of why “political types” tend to find people in The River abrasive, and vice versa.

There is also a personality cluster that can be found in the River. These traits are a little bit more self-explanatory. People in The River are trying to beat the market. In sports betting, the average player loses money because the house takes a cut of every bet. So if you follow the consensus, you’ll eventually go broke. Investing is more forgiving; just putting your money in index funds still has a positive expected value. Still, professional traders are trying to do better than the market-average return.

So part of the job of people in The River inherently involves being critical of consensus thinking, often to the point of being contrarian. Silicon Valley in particular is proud of its contrarianism—although it can be conformist in its own way. Some people in The River can turn these traits off in interpersonal settings, but others can have a hard time. It’s not a coincidence many Riverians like to get in fights about politics on the Internet.

Relatedly, people in The River are often intensely competitive. They’re so competitive, in fact, that they make decisions that can be irrational, gambling even once they’re essentially already set for life (think about Elon Musk’s decision to buy Twitter when he was then the world’s richest person and one of its most admired). If you haven’t gambled against other people before, I have to tell you: it can be quite stimulating. Winning money feels good, feeling as though you’ve outsmarted an opponent feels good, and when the two coincide, your brain is literally flooded with dopamine. It’s no surprise that people chase the rush, sometimes to their own demise.

Finally, I put risk tolerance in the personality cluster because being willing to break from the herd and go against the consensus is certainly not the safest professional path. Entrepreneurs tend to have high levels of openness to experience and low levels of neuroticism, the “Big 5” personality traits that correlate best with risk tolerance.

The River vs. The Village

There’s another community that competes with The River for power and influence. I call it The Village. I think of The Village as a mid-sized city, like Washington DC or Boston, the sort of place that’s just small enough where everyone knows one another and is a little self-conscious about it. It consists of people who work in government, in much of the media and in parts of academia (although perhaps excluding some of the more quantitative academic fields such as economics). It has distinctly left-of-center politics associated with the Democratic Party.

Part of it may be a personality clash—remember, Riverians love decoupling and Villagers hate it—but the communities find themselves increasingly at odds. Media coverage is now much more adversarial toward the tech sector, and generally skeptical of movements such as Effective Altruism (EA) and rationalism. But the grudge cuts in both directions: people within The River are seeking more political influence. Sam Bankman-Fried had wanted to become a major political player, donating millions of dollars openly to Democrats, but also covertly to Republicans. Meanwhile, Elon Musk’s purchase of Twitter in 2022 was treated as a matter of existential importance by people in The Village. I think that reaction was silly, but it shows the extent to which these communities see themselves as rivals and are ready to go to battle. And there are high-stakes debates to come, such as about the regulation of AI.

I have a unique vantage point as someone who passes back and forth between these worlds. To be clear, I am not an unbiased observer. People in The River are—for better or worse—my kind of people. Conversely, I’ve never quite taken to The Village, and I’ve often felt like media coverage of me and FiveThirtyEight was misinformed, particularly after the 2016 election.

But I do hear a lot of the complaints that these communities have about one another. I don’t think they are always articulated well, however. Even as a Riverian myself, I have quite a few criticisms of The River, and I think it could use critiques that hit the target more often. So here’s a quick attempt to outline what I think are steelman versions of them. A steelman argument—a favorite technique of EAs and rationalists—is the opposite of a straw man argument. The idea is to build a robust and well-articulated version of the other side’s position, even if it’s one that you disagree with. Let’s begin with The River’s critique of The Village since it’s the one I’m more naturally inclined to sympathize with.

The River’s steelman critique of the Village

A common complaint among people in The River is that Villagers are “too political.”

What does that mean, exactly? It means that Villagers are coupling when they should be decoupling. The River worries that The Village’s claims to academic, scientific and journalistic expertise are becoming increasingly hard to separate from Democratic political partisanship.

Indeed, Riverians inherently distrust political parties, particularly in a two-party system like the United States where they are “big tent” coalitions that couple together positions on dozens of largely unrelated issues. Riverians think that partisan position-taking often serves as a shortcut for the more nuanced and rigorous analysis that public intellectuals ought to engage in. They think these problems were particularly apparent during the COVID-19 pandemic and that The Village often adopted nakedly partisan positions—from endorsing public gatherings for the George Floyd protests after weeks of telling people to stay at home, to pushing to discourage Pfizer from making any announcement of the efficacy of its COVID-19 vaccine until after the 2020 presidential election to suppressing discussion of the lab-leak hypothesis—under the guise of scientific expertise.

Riverians also think that Villagers are too conformist and not aware of the degree to which their views are influenced by confirmation bias and political and social fads within their communities. Having a college degree is almost a prerequisite to the most prestigious Village jobs in academia, government and media. But as voters sort themselves along political lines and as educational polarization increases, Village communities have become increasingly homogenous politically. In 2020, the 25 most-educated counties in the United States voted for Biden over Trump by an average of 44 points, much greater than the 17 point margin by which they voted for Al Gore over George W. Bush in 2000. This has happened fairly recently, in other words, and Village institutions like academia and the media—which historically had traditions of nonpartisanship—are struggling to adapt to them.

And remember how competitive Riverians are? Well, Riverians worry that Villagers are stifling competition by increasingly focusing on equity of outcomes rather than equality of opportunity. Riverians tend to hold the classic capitalist belief that the free market does a better job than central planners in sorting out winners from losers. Furthermore, they believe that market competition benefits society as a whole by producing technological innovation and greater economic growth and improvements in the standard of living. And they can cite some recent examples of The Village moving away from meritocracy. For instance, elite colleges and graduate school programs have begun to deemphasize standardized test scores even though most research suggests that standardized tests are less influenced by social class or upbringing than other ways of evaluating applicants.

And naturally, Riverians think Villagers are too paternalistic, too neurotic and too risk-averse. The extensive COVID-19 precautions imposed on college, high school and elementary school students are one prominent example. Riverians viewed these as failing a cost-benefit test given that young people were much less likely than the general population to have severe outcomes from COVID and the disruptions to education caused huge amounts of learning loss.

Finally, Riverians are fierce advocates for free speech, not just as a Constitutional right but as a cultural norm. Remember, Riverians are big into abstraction—they care about principles. They also believe better ideas will win out in the “marketplaces of ideas” and that The Village’s attempts at speech regulation are hypocritical and often counterproductive. Riverians aren’t necessarily “anti-woke”—well, some certainly are, like Elon Musk, but a plurality identify as liberal politically. But they see the culture wars as an annoying Village distraction from the things they really care about, like AI.

The Villiage’s steelman critique of The River

But the Village can make several strong counter-critiques of The River. One strand of the argument centers around skepticism over unregulated capitalism and The River’s conceit of rugged individualism. Sure, Riverians may say they like competition. But The Village, not unreasonably, thinks it’s because competitions are often rigged in The River’s favor. By any objective measure, Riverians are powerful incumbents rather than the disruptors they sometimes claim to be, and benefit from existing social hierarchies; you don’t have to be super-woke to notice that much of The River is very white, very male and very wealthy.

Moreover, Villagers are skeptical that Riverians are actually as risk-taking as they claim. Sure, maybe poker players or small-business owners really are putting their own butts on the line. But when it comes to really big business like venture capital, founders and investors can fail several times over and still land on their feet. To take one example, Adam Neumann, the co-founder of WeWork who was widely regarded as having mismanaged the company as it lost about 90 percent of its market value, nonetheless received hundreds of millions in venture capital backing for his new company, Flow.

The Village is also concerned about moral hazard. That is, on a variety of questions—from failing to take COVID-19 precautions to making highly-leveraged investments—it questions whether people taking on risks bear the consequences of their actions. In the Great Financial Crisis, for instance, excessive risk-taking in the financial sector produced collateral damage to the economy as a whole while executives participating in excessively risky ventures were left relatively unscathed. The Village also questions whether recent technological innovations have in fact benefited society. Silicon Valley may talk a big game about rocket ships to Mars and lifesaving medical technologies, but one of its biggest categories of investment is social media, which has been blamed for everything from the revival of nationalist governments to depression among adolescents. Meanwhile, life expectancy in the United States has stagnated.

The Village also believes that Riverians are naive about how politics works and about what is happening in the United States. Most pointedly, it sees Donald Trump and the Republican Party as having characteristics of a fascist movement and that it is time for moral clarity and unity against these forces. Villagers see themselves as being clearly right on the most important big-picture questions of the day, from climate change to gay and trans rights. So they view the Riverian inclination to poke holes in arguments and “just ask questions’’ of experts as being a waste of time at best, and as potentially empowering a wake of bad-faith actors and bigots.

And Villagers generally don’t share The River’s interest in abstract moral philosophy. In The Village’s view, some questions can be resolved through common sense, politics is inherently transactional, and not everything needs to be put up for debate or subjected to cost-benefit analysis. They also doubt whether Riverians are really as independent-minded and open to criticism as they claim. From Sam Bankman-Fried to Elon Musk, The River has developed plenty of cults of personality, and they have often ended disastrously.

From ON THE EDGE: The Art of Risking Everything by Nate Silver, to be published on August 13, 2024 by Penguin Press, an imprint of Penguin Publishing Group, a division of Penguin Random House LLC. © 2024 by Nate Silver.