Tag Archives: risk

Seven Risk Theatre Playwriting Exercises

WORKING TITLE PLAYWRIGHTS
RISK THEATRE MASTER CLASS WITH EDWIN WONG
FEBRUARY 13/20 2021

SEVEN RISK THEATRE PLAYWRITING EXERCISES

Hi everyone, Edwin Wong here and I’ve got an awesome master class on risk theatre for you. This master class started when playwright and risk theatre finalist Emily McClain put me in touch with Amber Bradshaw, the managing artistic director at Working Title Playwrights, the leading new play incubator in the Southeast. Thank you to Emily, Amber, and Working Title Playwrights for this wonderful opportunity to connect. It’s great to see y’all here. Thank you for coming!

Here’s the story of risk theatre. Like Aristotle’s Poetics or Nietzsche’s The Birth of Tragedy, risk theatre is a theory of tragedy. One of the purposes of theories of tragedy is to answer the question: “Why do we find tragedy so alluring when it is full of sorrow and suffering? Why are we not, instead, disgusted by it” My answer is that tragedy fascinates because it dramatizes chance and uncertainty. By making risk the dramatic fulcrum of the action, it keeps audiences in thrall.

While researching probability theory in 2006, the spark of risk theatre occurred. I fed the spark, and, by inaugurating an international drama competition in 2018, the spark became a flame. The contest is now in its third year and awards over $12k in prize money each year. Then, by launching my book in 2019, the flame became a fire. Today, we’re going to set fire to the flames. Theatre is hungry, like fire.

When Amber was asking me to write a little blurb on the class, I thought of continuing the fire metaphor. I was going to create a tagline for the class that read: “Throw more fire into your work instead of throwing more of your work into the fire!” I didn’t have the guts to write that. But, behind the joke is a kernel of truth: my playwriting exercises will put more fire into your work.

I’ve written seven brand new exercises for you to harness the dramatic possibilities in chance, risk, and the unexpected. I’ve modelled these exercises after the playwriting exercises in Mark Bly’s 2020 book: New Dramaturgies: Strategies and Exercises for 21st Century Playwriting. Bly’s book has helped me out many times, and it’s an honour to use his book as a template. Today’s exercises are adapted from my 2019 book, The Risk Theatre Model of Tragedy: Gambling, Drama, and the Unexpected.

In today’s three hour session, I’ll present the exercises. After I present each exercise, we’ll have time to discuss for ten or so minutes before moving on to the next one. Halfway through the session we’ll have ten minute coffee break. In next week’s session, you’ll bring back your responses, and we’ll look at them together. Next week is also a three hour session, so we’ll have time for ten or eleven responses, selected from a lottery process. Chance is, after all, our theme.

Tragedy today has a bad rap. It’s a gloomy, depressing show about kings and queens. No one is lining up to see that. But if we transform tragedy into risk theatre and sell this idea to audiences and theatres, tragedy will come back into vogue. The public’s demand for chance, uncertainty, and the unexpected is insatiable because the problems and possibilities of our time are encapsulated in the concept of risk. When life give you risk, make risk theatre. Let’s go around the room and introduce ourselves. To make the audio clearer for everyone, I’ll put myself on mute now and I’ll toggle the microphone back on when I’m speaking. 

1          Wong’s “All Eggs in One Basket Exercise”

Have you heard of the expression “to go all-in?” It’s a gambling term. When a gambler goes all-in, the gambler stakes everything on the outcome of one roll, or one card, or one hand. In other words, all the eggs are in one basket. When all the eggs are in one basket, strange things happen. Strange things happen because the gambler has taken on risk. Risk has an uncanny power to multiply the risk taker’s position many times beyond what the risk taker can reasonably cover. It sets up the gambler for a catastrophic failure. These catastrophic failures interest audiences because they are inherently dramatic.

This playwriting exercise came to me when I was reading Paul Lyons’ collection of short stories called: The Greatest Gambling Stories Ever Told: Thirty-One Unforgettable Tales of Risk and Reward. Gamblers, by biting off more than they could chew, seemed to change the fabric of reality: by risk, they connect together all the strands of their life into a defining and explosive moment. Let’s talk about two of these stories: Pushkin’s Queen of Spades and Jessup’s The Cincinnati Kid.

The gambler Hermann in Pushkin’s The Queen of Spades discovers the secret to the game of faro (there is never any doubt that the secret is good, even though he gets it from the ghost of the Countess Anna Fedotovna who is a ghost because he’s killed her: in drama we overlook these “details.” Take, for example, Sophocles’ play The Women of Trachis, where Deianeira receives a potion from a dying centaur her husband’s just shot). Back to the story. The secret is to bet everything on the first night on the three card, to do the same thing the second night on the seven, and on the third night on the ace. The first night, he bets 47k rubles on the three. Tchekalinski, the banker, comments that the highest stake is typically 175 rubles. The next night, he bets 94k rubles on the seven, and wins. And the final night, he places 188k rubles on the ace, or what he thought was the ace. The ace wins, but it turns out Hermann had somehow misplaced his bet on the queen of spades, which, in defiance, seems to wink at him. He goes insane.

A similar, and even more concentrated scenario plays out in Jessup’s The Cincinnati Kid. In the movie (where the Kid plays out the final hand with greater skill than the novel), the Kid places all his eggs in one basket on the final poker hand. The Kid thinks that his full house has finally beat Lancey “The Man” Howard, who could be holding possibly nothing or perhaps a flush or straight flush. If the Man has nothing or a flush, the Kid wins. If the Man, however, has a straight flush, the Man wins. The odds in a two-handed game of poker, however, of a full house falling to a straight flush is 45,102,784:1 against. Accordingly, the Kid bets all-in, even borrowing $5000 Depression-era dollars to multiply his winnings. But, when the Man does have the straight flush, the Kid is out $15k. How much is that worth? Well, if we look at the prologue to Arthur Miller’s All My Sons, that’s the exact price of a two-storey, seven-room house in that era.

Now let’s translate this “all eggs in one basket” scenario to the playwriting world. Consider Nora in Ibsen’s A Doll’s House. For eight years, Nora bets all in on her husband’s love and understanding. Like the Cincinnati Kid, she holds a full house. But when it comes time to show her hand, she sees that, far from a full house, all she has is a doll house, and that is enough to break her heart. She bet, like Hermann in Pushkin’s short story, on the king of hearts, but finds, she’s placed all her hopes on a king of spades.

The Exercise

In the “All Eggs in One Basket” exercise, the playwright will place a character in some sort of high-stakes situation. The character really wants something very badly. To get it, the character must go all-in. There can be no plan-B. It is all-or-nothing. Finally, say how the high-stakes situation gets away from the character’s controlling grasp. In 250 words, report back to the group next week the risk event, and how the outcome defies the character’s expectations. If the response reads like a play synopsis, you’re on the right track.

2          Wong’s “Exercise in Human Foibles”

Have you noticed that we all have certain foibles that motivate us to take risk? Generally, we are risk-off. We have been brought up that way. We have been told from childhood that “a bird in hand is worth two in the bush.” Folk tales also reinforce the need for moderation: Aesop has a tale of a boy who gets his hand stuck in the jar trying to take out more than his fair portion of nuts (“The Boy and the Filberts”).

Risk-off characters are stable. For risk theatre, we need risk-on characters. How do we coax characters to turn up the risk, to flip the switch from risk-off to risk-on?

Have you heard of this stock called GameStop, ticker GME on the New York Stock Exchange? It’s been lighting up the news lately. I have a fascination for stock market bubbles: the Dutch Tulip Bubble in the 1600s, where tulips would sell for the price of waterfront mansions; the South Sea Bubble in which Isaac Newton lost a fortune, famously lamenting that he could “calculate the motions of the heavenly bodies, but not the madness of people;” the Roaring Twenties; the Dot-Com Bubble; and many more. These bubbles are the object of much study. It was while reading Canadian-American economist John Kenneth Galbraith’s A Short History of Financial Euphoria—a book short in length but long in the wit and dry humour—that this exercise occurred to me. In reviewing three centuries of financial bubbles, Galbraith identifies triggers where previously rational and risk-off market participants would engage in irrational and risk-on speculation. It occurred to me that not only normally risk-on types of characters, but also nominally risk-off characters—with the right motivation—may be inspired to engage in dangerous speculation.

Myself, I love risk-on types of characters: Faust, Joan of Arc, Don Rodrigo. But these brash characters are not to suitable for all audiences, who tire of their larger-than-life excess. Sometimes audiences enjoy characters with constant, loving, and noble natures who value reflection and prudence over risk. Othello is such a character. His “constant, loving, noble nature” makes him ill-suited for crimes of passion. Shakespeare, however, triggers Othello’s speculative tendencies by putting him “into a jealousy so strong / That judgement cannot cure.”

The Exercise

In the “Exercise in Human Foibles,” the playwright will take a mild-mannered character—one of their own or a character from a well-known play—and describe, in 250 words, how a mild-mannered nature can be encouraged to risk everything. In this exercise, you will concentrate on triggering the character’s all-too-human foibles. The emotions of greed, love, jealousy, and anger, are all proven triggers. Or you can focus on different human drives. The drive to keep up with the Joneses is identified by Galbraith as one of the factors that incite financial euphoria: even mild natures cannot stand watching neighbours get ahead.

3          Wong’s “Taking a Page from History Exercise”

One of the best pieces of advice in university was given to me by Leslie Shumka. She, in turn, got it from Keith Bradley. The advice: “Read widely, especially outside your field.” At the time, I was young, and didn’t understand. But it stuck in my head, as Leslie’s tips were usually helpful. That it came from Bradley also helped the idea stick. He was one of the gods in the department who was alternately feared and worshipped by the students, and perhaps by some of the other professors as well. He was the preeminent expert on Roman slavery, and we always thought of him as a terrific atheist, since his position was that Christianity played an absolute zero role in making slaves’ lives better. I always found it ironic that he left Victoria to finish his career at a Notre Dame, a Catholic university. At any rate, we always paid attention to what he had to say. But, at that time, I was busy reading more and more things in my field. “Why would I want to read stuff that has nothing to do with me?” I thought.

In time, I would understand. If you only read within your field, you’ll be reading what everyone else is reading and when you create, chances are you’ll be creating things similar to the things your colleagues are creating. When audiences see your shows, they may notice generic similarities in theme, plot, and image. If you want to create something that truly stands out, you have to read widely. You’ll be inspired by new ideas and find new connections. When the young Bob Dylan moved to New York in the early 60s, he would spend his days in the public library. While everyone else reading the most recent newspapers, Dylan would read the papers from the 1800s. His favourite papers were the ones from the Civil War period. You can hear this influence in his songs Nettie Moore or ‘Cross the Green Mountain. Reading widely gives him a unique take.

One of my favourite genres outside drama is history, especially the philosophy of history. The biological metaphor of nations undergoing birth, growing pains, maturity, consolidation, and decline in the German historian Oswald Spengler. The process of an eternal recurrence in the Hellenistic historian Polybius. The study of power in the Greek historian Thucydides, power that could even change the meanings of words and language.

This exercise arose while reading the historians. I noticed that they start their histories at some explosive point in time. Herodotus isn’t talking about a random section of history, but the Persian Wars, the greatest of wars up to that period of time. Thucydides one-ups Herodotus—by his time, the Persian Wars seemed like a minor skirmish—now the most badass conflict is the Peloponnesian War. Homer is even more specific. He doesn’t start at a random point in the Trojan War, but at that moment when Agamemnon insults Achilles, a slight that will result in the death of thousands, both Greek and Trojan alike.

The Exercise

In the “Taking a Page from History Exercise,” you’ll think like a historian. Come up with a historical setting and tell the group, in 250 words, the dramatic potential of this setting. Many of the most memorable plays find their inspiration from history. Macbeth is inspired by Holinshed’s Chronicles. Arthur Miller’s The Crucible is set during the Salem witch trials. Many other opportunities are also possible: scientific revolutions, the unintended consequences of great inventions, or historical pivots. The focus of this exercise isn’t a plot or the characters, but to focus on the setting itself, to find a setting out of which risk develops organically. Many possibilities present themselves here. Did you know, for example, that Sophocles’ Oedipus rex is set in a plague and was produced during a time of plague? The Crucible as well, while set during the witch trials, speaks to more contemporary events: the communist witch hunt. So too, Macbeth, while dramatizing eleventh century English-Scottish relations, speaks to the audience about King James, a Scottish king wearing the English crown.

This sort of historical distance is a useful asset to dramatists who wish to speak on current events without touching their audiences’ raw nerves. Sophocles, Shakespeare, and Miller were successful. Less successful was the ancient Athenian playwright Phrynichus. He wrote a moving play on the sack of Miletus, a sister city of Athens. It moved the audience to tears. But because the trauma of losing a sister city was too fresh, the state fined him 1000 drachmas, not a small amount, as 1000 drachmas could keep a family of four going for a year. In addition, they forbid the play from ever being produced again.

4          Wong’s “Birnam Wood Exercise”

Low-probability, high-consequence events are great fun because they’re part of a metatheatrical game between dramatists and audiences. By metatheatrical I mean the dramatist is talking directly to the audience. The game is played like this: the dramatist drops a hint of some impending low-probability event. The audience picks up this hint and starts trying to figure out how the dramatist will bring it about. The challenge is that, because the event is low-probability, it is hard to bring about.

This game of suspense is fun because it gives the audience skin in the game: they’re invested in the outcome as they try to piece together the clues. They watch the unfolding action with more attention. The game is likewise fun for the dramatist. It opens up fun devices such as misdirection or delay. The game also invests dramatists to use all their skills, as bringing about the impossible or the highly improbable is like pulling off a magic trick.

I don’t remember exactly where I got this idea from, it’s been so long. But it occurred to me when I was reading a book or an article by Alfred Hitchcock. He was talking about suspense as a game between the writer and the audience. Around the same time, while reading Shakespeare’s Macbeth and Aeschylus’ Seven Against Thebes, it struck me how Hitchcock had nailed it on the head. You can know exactly what will happen, but it’s still full of suspense because you don’t know how the dramatist will get there. Trying to guess how the dramatist gets there is all the fun.

The great fun in Macbeth is trying to figure out how Birnam Wood comes to Dunsinane Hill and how Macbeth will run across a man not of woman born. I think that the audience—as soon as they hear about Birnam Wood, and about the man not of woman born, and Macbeth’s protestations that it couldn’t happen—think the opposite: that it will happen. And it does happen: Birnam Wood comes when Malcolm orders his troops to camouflage themselves with branches cut down from the wood and Macbeth meets the man not of woman born when Macduff tells him he was born by C-section. Each time I see this—even though I’ve seen it a thousand times—I think “Ah—this is great!” And I think of what a great joke the messenger missed when he told Macbeth that the wood is coming. He could have said: “The copse are coming! The copse are coming!” (thank you to David Konstan for that funny). Well, if nobody is laughing, this is why I am leading a master class on tragedy, and not comedy! For a more detailed analysis of Macbeth, click here.

I was wondering if I should bring up Aeschylus’ Seven Against Thebes, a play that even classicists hardly read. I think I will, because it illustrates better than anything else how, even if the outcome is known to all, a great dramatist can generate suspense. Bear with me, it’s tricky to explain, but, I think, if you follow along, you’ll be amazed how Aeschylus pulls it off. For a more detailed analysis of Seven, click here.

Civil war rages in Thebes, fought between Oedipus’ two sons. Thebes has seven gates. One son, along with six captains, defends Thebes, one at each gate. Another son, along with six captains, lays siege to Thebes, one at each gate. The worst-case scenario happens if brother confronts brother at the final gate. The Greeks had rituals to purify spilt blood. They had no rituals to purify spilt kindred blood, which would release demonic spirits called the Furies. You don’t want the Furies to come out. The worst-case scenario only happens at the final gate, because, if the brothers meet before the final gate, they could substitute another captain. Oh, and another thing, the captains draw lots to determine their gate assignations. That is to say, all the gate assignations are random.

The audience knows that the brothers will kill each other. The action is part of the stories they’ve known since childhood—their myths. How this will happen in the play, however, they do not know. Okay. So the way Aeschylus sets this up is that each captain bears a shield emblazoned with a fantastic heraldic device. After the captains are assigned their gates, you can tell from the images on the shields who the gods favour—through the crack of probability and chance the gods reveal their will. In the play, we see the events unfold from the point of view of the brother defending the city. Starting from gate one, all the shield matchups overwhelmingly favour him. If the attacker carries an image of, say, the fire-breathing dragon Typhon on his shield, just by coincidence the defender has the image of Typhon’s slayer on his shield. This is a sign that the gods favour your cause. From gates one to six, by some amazing coincidence, the matchups so overwhelmingly favour the brother defending Thebes that the audience forgets that, each time a set of captains goes to the gates that isn’t one of the brothers, the odds of the worst-case scenario that brother confronts brother at gate seven goes up. And that is precisely what happens! As things get subjectively better and better, they are, in reality, getting objectively worse and worse. I love this play so much because there is no other play that works suspense so well. On the one hand, the fated outcome is getting more and more objectively likely, but, on the other hand, things are going so well it subjectively appears it could never happen. In antiquity, this play was an audience favourite, produced again and again. I can see why. I wish this play would come back into the canon. I’ve championed this play tirelessly in my risk theatre vision of tragedy.

The Exercise

In the “Birnam Wood Exercise,” the playwright will take a modern day prophecy and say, in 250 words, how, on first appearances, it could not happen, but then find a back door through which it comes to pass. Modern day prophecies can be all sorts of things. It can be the Titanic, the ship that could not be sunk. It could be the Great Depression: a few weeks before it broke out, the celebrity Yale economist Irving Fisher was telling the world that stocks had reached “a permanently high plateau.” It could be the behemoth oil rig Deepwater Horizon, with all its blowout preventers, blind shear rams, and sundry failsafes. In tragedy, there’s always a sliding door, a letter, a handkerchief.

In this exercise, the playwright finds the simplest strategy possible to communicate to the audience that the catastrophic event that can’t happen will happen. The focus is on simplicity. Usually when I tell people about how the impossible happens because Macduff was born by C-section, they groan a little bit. The technique you use to bring about the impossible doesn’t have to be realistic. The audience isn’t looking for that. But what the audience is looking for is that you play this game of suspense with them. With this one, make it simple, even if unrealistic. This is a good one to fight the urge to be clever. The C-section trick in Macbeth elicits groans, but hey, Macbeth is still a pretty good play.

5          Wong’s “O’Neill’s Fog Exercise”

I live on the banks of Esquimalt Harbour, in Victoria, Canada. My “harbour” is really a mud flat that’s different at all times of the day. When the tide’s out the shore recedes 200 metres. When the tide’s in, it looks like you’re looking into the ocean, but, until you get 300-400 metres out, it’s only 2-3 feet deep. In fact there’s an island a couple of hundred metres from shore that you can walk out to, even in high tide. Zodiacs drive all the way in and I’m always surprised their engines don’t bottom out. One cool thing around here are all the different birds: swans, eagles, vultures, gulls, herons, and my favourite, kingfishers. They’re a small bird, the size of my fist. They hover 20-30 feet above the water and will do a 90 degree dive straight in to fish. Daring. The other cool thing out here is the fog. The fog is mysterious, a visual analogy of risk, uncertainty, and the unknown.

One day, I took a photo of the Esquimalt Harbour fog and posted it on Facebook. Chicago playwright Mike McGeever commented on how Eugene O’Neill uses the fog as a barometer of risk: Long Day’s Journey into Night starts in the clear day. As the fog rolls in, Mary dissolves into morphine’s embracing haze. By the end of the play, the fog blankets everything and Mary is all but lost. As I started reading O’Neill’s earlier plays, I realized that O’Neill had been experimenting with the fog trope for at least twenty years, if not even further back. In Annie Christie, his 1921 Pulitzer winning play, there it is on the docks, the fog, full of uncertainty and foreboding, a sign that something will happen.

Risk theatre is meant to be an entertaining theatre, theatre that moves inexorably forwards towards the low-probability, high-consequence flashpoint. All the resources of theatre—language, character, plot, acting, directing—must be used to drive the action forwards. A sometimes overlooked resource to heighten the tension is the stage direction or the recurring device that signals: “Fasten your seatbelts, something is about to happen.”

These devices of stage directions are short gestures that go a long way. Any fans of German cinema here who remember Das Boot, a West German WWII movie from 1981 written and directed by Wolfgang Petersen? The film follows the crew of the submarine U-96 during the Battle of the Atlantic. A handful of times, before a major malfunction, the camera pans towards the instrument cluster and zooms in, for a split second, on a round dial. All the eye can see in this flash is that the dial is marked “Tiefenmesser” and it records the depth of the sub. The further to the right of the dial is, the deeper the sub is. Towards the extreme right, the dial goes into the red. Before the major malfunctions, Petersen will have the camera zoom in and show the hand going into the red. Inevitably, sometimes seconds, sometimes a minute after, an engine will explode, the sub will take water, they lose steering. This motif reminds me of O’Neill’s fog, an early warning sign that something will happen. In the script, it would be a line: “Zoom in on the bathometer.” This line is worth every word, and so much more.

While we don’t have a camera in theatre, this sort of motif can be embedded in stage directions: in can be highbrow, like O’Neill’s fog or Petersen’s Tiefenmesser, or it can be lowbrow like the headband in Rambo. Do you know the headband scene in Rambo?—before he gets into action, he has this red headband that he ties on. Now, whether highbrow or lowbrow, however, stage directions can communicate that something is about to happen. The motif can also be built into the dialogue. In Nicholas Dunn’s play The Value, one of the winners of the Risk Theatre Competition, the protagonist, a character with a sense that he was meant for something greater says, at three pivotal moments: “This … is what happens … .” When workshopping the play, we gave the line a beat and emphasized the deictic quality of this, that this this was pointing to a foreboding sense of a greater destiny revealing itself. The playwright, who is a basketball fan, encouraged Anthony Gaskins, the actor who played this character, to think of the line as something similar to the chalk toss ritual that basketball superstar Lebron James does before games. He chalks his hands and claps his hands together, puffing up the chalk into a cloud. The line became one of the focal points of the play, something spoken by a character to make the audience feel a sense of wonder and awe. It was very good.

The Exercise

In this exercise, the playwright will take an existing play—any existing play, whether by the playwright or another playwright—and identify an event that the audience expects will occur. It could a conflict between characters that leads up to a fight. It could be a relationship headed towards an inevitable breakup. It could be the moments where a brother and sister, separated by the contingencies of war for many years, run into each other again. After identifying this event that the audience expects will occur, the playwright will come up with a motif that heralds that something will happen. The motif is to be embedded in the stage directions. It could be a musical motif, a fog horn, the Tiefenmesser, a headband, the chalk toss. If not strictly a stage direction, it should be something that stands in as a stage direction: for example, the moments that the protagonist in Dunn’s The Value says: “This is what happens … .” This motif should be a device that can recur so times in the play before it becomes hackneyed. If it occurs once, the audience can’t tell the signal from the noise. Not yet. Twice the audience starts to catch on. Three times is perfect. Four risks becoming hackneyed.

6          Wong’s Exercise in Dramatic Indeterminacy

Great plays generate great controversy. Think of Sophocles’ Antigone: who is right—Creon, who represents the state, or Antigone, who represents tradition? Think of Ibsen’s A Doll’s House—is Nora justified in leaving her husband and children? Here’s a question: would you find Antigone more or less great if the balance inclined definitively towards one or the other? That is to say, if Sophocles had written a play where Creon is right and Antigone is wrong, would it be a better play or a worse play? And the same with A Doll’s House. Is Ibsen’s original play better, or version created in response to the censors who wanted the play to be morally definitive? How much of a play’s greatness comes from the controversy it generates, its ambiguity?

Controversy is possible because of indeterminacy. Critics who take Antigone’s side will pull out quotes that support her position and critics who take Creon’s side will find that Sophocles has given them backup as well. The French playwright Jean Anouilh famously put this principle to work in an adaptation of Sophocles’ play which was performed February 6, 1944 in Paris during the occupation. Both the Free French and the Nazis were in attendance, and both applauded the ending. The legend of this balancing act lives on whenever people talk about this performance.

If indeterminacy is desirable, how do we add it into our plays? This exercise came me to while reading biologist E.O. Wilson’s 1998 book Consilience: The Unity of Knowledge. He’s the scientist who cracked how ants communicate with each other. Ants have a remarkable ability to communicate with one another by using up to twenty signals to signal danger (get away), danger (come help), opportunity, and kinship. He hypothesized that they communicate through pheromones, or smell. The breakthrough involved biologists, mathematicians, chemists, social scientists, and artists. Biologists to understand that the ants have scent glands, mathematicians to model diffusion rates, chemists to isolate the molecules of scent, social scientists to model behavior, and the arts to create the narrative. To Wilson, every jump in knowledge involves the combination of unlikely disciplines. To jump to a higher understanding in playwriting, we’ll take a page out of Wilson’s playbook and bring together two unlikely fields:  mathematics, probability theory, philosophy, and playwriting. Hey, this is risk theatre. It’s different. New blood.

One of the great debates in Shakespeare’s Othello is whether Othello, from his own point of view, had enough information where he could reasonably judge whether he has been cuckolded. In other words, does he achieve what philosophers call moral certainty, moral certainty being that degree of probability so great as to admit no reasonable doubt? Modern statisticians use a one to five percent significance test as a threshold of moral certainty. That means, once they’re 95 to 99 percent certain that the result is not due to chance, they act; they publish their results. Until recently, physicists used a 0.3 percent significance test before they would announce a discovery. That means they’re 99.7% certain that the observation is the real thing rather than a fluke event. Recently, while searching for the Higgs boson, they upped the threshold to 99.99994%.

Does Othello achieve a measure of moral certainty? From a risk theatre perspective, this is the pivot of the play. Some say yes. Some say no. This indeterminacy makes the play great. With a formula called Bayes’ theorem, we will see how much of moral certainty Othello achieves. Bayes’ theorem gives us a way to revise probability estimates as new information becomes available. It’s really cool. First, tell me, based on Iago’s accusations, from the point of view of Othello, that is to say, if you were Othello, what’s the percentage chance you would think you’ve been cuckolded by Desdemona and Cassio when Iago first tells you about it? This number we’ll call the prior probability. We take into account Iago’s reputation for honesty and other hints in the play. We know from the play that it is not enough for Othello to act on.

Next, we take the new data: the handkerchief. From Othello’s point of view, what are the odds that he is a cuckold if he sees Cassio with it? Then, finally, one more piece of information, again, from Othello’s point of view: what are the odds that he is not a cuckold, should he see Cassio with the napkin?

P(C H): posterior probability Othello is cuckold after seeing Cassio with napkin
P(C): prior probability Othello is cuckold before the new information from the napkin test
P(~C): prior probability Othello is not a cuckold before the new information from the napkin test
P(H C): probability Othello is a cuckold, should he see Cassio with his napkin
P(H ∣ ~C): probability Othello is not a cuckold, should he see Cassio with his napkin

Here’s what the formula looks like:

                                                               P(H ∣ C)
P(C H) = P(C) * _____________________________________________________________

                                          {P(H ∣ C) * P(C)} + {P(H ∣ ~C) * P(~C)}

And here it is inputted with what I felt to be the probabilities::

                                                               0.90
0.989 = (0.50) * _____________________________________________________________

                                          {0.90 * 0.50} + {0.01 * 0.50}

Othello can be now 98.9% certain that he has been cuckolded. While this falls short of the 99.99994% percentage (a 1:3.5 million chance that the finding is due to chance) standard while searching for the Higgs boson, it’s in line with what modern statisticians would consider the threshold of moral certainty. The important thing to note, is that, playing with the numbers gives Othello different confidence levels. This fruitful ambiguity is what allow these discussions to happen. To me, that’s what makes this play fascinating: you could argue both sides persuasively. For a more detailed look at Othello, click here.

The Exercise

In this exercise, the playwright will go through Shakespeare’s Othello with an eye on how Shakespeare constructs probability in the play. Focus on Shakespeare’s language of moral certainty he uses in the play: “proof,” “overt test,” “thin habit and poor likelihoods,” “modern seeming,” “probal [i.e. probable] to thinking,” “exsufflicate [i.e. improbable] and blown surmises,” “inference,” “prove it that the probation bear no hinge nor loop,” “I’ll have some proof,” “living reason,” “help to thicken other proofs that do demonstrate thinly,” “speaks against her with the other proofs,” and so on. After analyzing the construction of probability, the playwright will assign probabilities to populate Bayes’ theorem to determine Othello’s degree of moral certainty, or lack thereof. Then the playwright will propose one way in which Shakespeare could have revised the play to increase Othello’s moral certainty and one way in which Shakespeare could have decreased Othello’s certainty. Finally, the playwright will conjecture the effect of increasing and decreasing Othello’s degree of moral certainty on the audience’s reception of the play. We use Bayes’ theorem in this exercise not because we require mathematical precision, but as a springboard into thinking about certainty and ambiguity.

In this exercise, the playwright asks: does Shakespeare get it right? Or can Othello be improved by making the guilt more or less certain? Would it have been better for Shakespeare to have created a play where certainty could have been achieved absolutely? Finally, after exploring indeterminacy in Othello, the playwright will relate to the group a way of applying indeterminacy into one of the playwright’s own plays. The purpose of this exercise is to find ways of generating controversy. Where there is controversy, audiences and critics will keep talking about your play. Where there is certainty, the debate quickly ends. That’s no fun. Indeterminacy is a great tool to captivate audiences.

7          Wong’s Exercise in the Price You Pay

Why is it hard to write tragedy? To this complicated question, I offer a simple answer: few dramatists have the heart to do to the character what they must: that is, complete obliteration. The tragic life is nasty, brutish, and short. Tragedy is an extremist art. Consider Oedipus in Sophocles’ Oedipus the King. All the poor guy wants to do is to lift the plague. He’s the king and it’s killing all his people. Look what Sophocles does to him. He strips him of his kingdom, takes away his crown, takes away his family, his dignity, and even his eyes. Is it not a bit much? Consider Lear in Shakespeare’s King Lear. King Lear is a doddering old fool. Look what Shakespeare puts him through. Is it not too much? When Lear says: “I will do such things— / What they are, yet I know not: but they shall be / The terrors of the earth,” I always wonder whether this is Lear or Shakespeare talking. I think the “terrors of the earth” is what Shakespeare does to Lear, not the other way around. The dramatist who can write successful tragedy is a scourge who calls down the terrors of the earth on unsuspecting protagonists.

In a conversation with Friedrich von Müller, German statesman, scientist, novelist, and dramatist Friedrich Johann Wolfgang von Goethe describes the tragic as the scenario which admits of no solution and no compensation. The loss must be terrible, absolute, and irrevocable. The second the tragedian offers any sort of compensation—a sort of victim’s services package—to the wounded protagonist, the tragic disappears.

Goethe himself could not rise to the occasion. At the last hour, Faust is saved. So too Egmont, though he dies, he finds compensation knowing that his death will incite the revolution that frees his people. As a result, he could not attain the heights the big three of Aeschylus, Sophocles, and Euripides, and the big two of Marlowe and Shakespeare reached. Goethe knew it too. He just couldn’t make himself do it. He didn’t have the heart. “The mere attempt to write tragedy,” he said in a letter to Schiller, “might be my undoing.”

In the last century, Arthur Miller was able to rise to the challenge in All My Sons. I am sure when Miller told his friends what he was working on, he wasn’t saying: “I drive a horrible man to commit suicide for killing twenty-one pilots,” but rather said, “I drive the best of fathers to suicide for doing what he thought was best for the ones he loved the most.” The former would have been too easy. The latter not many can pull off. The best sign you’re onto true tragedy is, when you tell your friends the plot, their eyebrows go up as in: “You’re kidding me, you did what to your protagonist?” For a more detailed look at All My Sons, click here.

One way to make it easier to inflict the terrors of the earth is to think of tragedy as a weighing mechanism. You put on one scalepan what the protagonist wants the most. In the case of Macbeth, it’s the crown. In the case of Joe Keller, it’s a business to hand down to his sons. In the case of Oedipus, it’s to raise the plague. On the opposing scalepan, you place what the protagonist must give up. In the case of Macbeth, it is compassion, or the milk of human kindness. In the case of Keller, it is his integrity. In the case of Oedipus, it is his precocious innocence.

Tragedy becomes terrible—and terrible is a good quality in tragedy—when both sides of the scale are heavy. Think of tragedy as a weighing mechanism for human ambitions and values. Characters must pay the price to obtain their wants. This idea of tragedy as a valuing mechanism I got from the economists and their idea of opportunity cost. Opportunity cost is the idea that, in choosing, there is a cost: one loses the next best alternative, the next best alternative is forsaken in selecting the best alternative. One cannot have cake and eat it too. One cannot have $10k cash and 25 shares of GameStop stock, one has either $10k cash or 25 shares of GameStop. When one chooses one or the other, the second choice is lost and, by choosing, one falls under the sway of a higher power, either towards reward or ruin. In risk theatre characters can have either a golden calf or a God.

How does this exercise help to unleash the tragic spirit? By looking at tragedy as a weighing mechanism, it becomes easier to inflict the terrors of the earth on unsuspecting heroes because, by looking at the exchange mechanically, you depersonalize the transaction. You’re not doing this to a nice person; you’re merely balancing accounting identities.

In economics, an accounting identity is just something that is simply true. The simplest one is probably: Assets = Liabilities + Equity. A tragic identity can be expressed similarly: Assets = Liabilities + Opportunity Cost with Assets being what the hero wants, Liabilities being the questionable things the hero has done along the way, and Opportunity Costbeing the good things the hero has given up along the way. By looking at the exchange though the eye of economics, you depersonalize the terrors of the earth. You become an economist, an accountant. It’s hard to lay Willy Loman off. He’s worked for you for a lifetime. He’s a person. But if you look at him mechanically, look at him like a businessperson, like an accountant or an economist, Willy’s just another line item. It’s easier to do to him the terrors of the earth. This is perhaps the hardest of the exercises. I don’t know if playwrights, so full of humanity, compassion, and the kindred spirit have what it takes to engage with the dark side of the force.

Economics is called the dismal science because it confronts the problem of scarcity. Tragedy too, is a world of shortages. There are too many kings and too few crowns. Tragedy is the dismal art. The dismal science and the dismal art: it is a match made in heaven. The opportunity cost concept in the economic sciences leads to tragic entanglement in the dramatic arts.

The Exercise

In this exercise, the playwright will, in 250 words, present the cost of opportunity. Take a character you’ve created, and frame the choice they must make in terms of opportunity cost. What do they want? Is it a crown, shares of GameStop, or a Broadway production? What are they willing to give up for what they want? Is it the milk of human kindness, integrity, or love? And what will trigger the character to have to pay? In All My Sons, Keller wants a good life for his sons. To get his sons the good life, he gives up his integrity. The trigger happens when he discovers that the twenty-one pilots who died because of him were, in a way, all his sons too.

In this exercise, you will find out if you have what it takes to do to your characters the unspeakable things that Miller did to Keller, that Shakespeare did to Lear, that Sophocles did to Oedipus. This, of all the exercises, is perhaps the hardest. Even Goethe was not up to task. It requires a rare and beautiful ruthlessness to cast your beautiful creations into the pit.

There you have it: seven playwriting exercises to help you put more risk, chance, and fire into your writing! Remember, when life gives you risk, build a theatre of risk. If you build it, they will come.

You can find me on Twitter, my handle is @TheoryOfTragedy. You can also find me on Facebook  at https://www.facebook.com/edwincharleswong and LinkedIn at https://linkedin.com/in/edwinclwong. The Risk Theatre Competition page is at https://risktheatre.com and you can also find competition updates on the Facebook “Risk Theatre Modern Tragedy Competition” page. Don’t worry about taking notes, all the exercises will be posted on my blog at: https://melpomeneswork.com/workingtitleplaywrights/. Follow my blog, there’s always something new and interesting coming out. Go to https://melpomeneswork.com/ and enter your email under “Subscribe to Blog via Email.” Feel free to share the blog link with all the exercises with all your colleagues and ask your local library to make my book available, it is a terrific resource! If, down the road, you find these exercises have helped you, write me, I’d love to hear from you and I’m easy to find.

– – –

Don’t forget me, I’m Edwin Wong and I do Melpomene’s work.
sine memoria nihil

Review of CIVIL WAR – Lucan (translated Matthew Fox)

Penguin, 2012, 537 pages, translated by Matthew Fox

Has there ever been a better time to read Lucan’s Civil War? It’s the story of the fall of the Roman Republic and the rise of the Principate. It’s the story of a world gone mad where a young and brash Caesar takes on Pompey the Great, the grizzled war hero. One leader takes too many risks, the other, too few. One leader has the gods on his side, the other has Cato on his side. The world hangs in balance. No one knows who Fate and Fortune will favour. Though the outcome is uncertain, all the participants in this game of death wager all-in. This is Lucan’s Bellum Civile or Civil War, sometimes also called The Pharsalia, after the famous battle at Pharsalus where, under divided standards, Roman slew Roman.

The Good

The first century critic Quintilian hits the nail on the head when he writes: “Lucan is fiery and excited and most illustrious for his clever phrases [sententiae].” Lucan was Twitter before there was Twitter. Today, he would have broken the internet with his wit on fire:

Caesar could bear none better, Pompey no equal.
Which one took up arms more justly? Knowing that
is not allowed–a high judge acquits each one:
Gods favored the victor, but Cato the lost cause.

The unspoken thought here is that senator and stoic philosopher Cato is equal to the gods. Daring. The image of mortals rising up to challenge the heavens occurs in many of Lucan’s memorable images. Here, for example, he contrasts Caesar to Liberty personified. Guess what?–they are evenly matched:

Flee dire battles
and call the gods to witness that who persists in arms
no longer dies for you, Magnus. Like the losses
in woeful Africa, like ruinous Munda, and the defeat
by the bay of Pharos, so the greater part
of Thessaly’s conflict after your departure
is no longer for Pompey’s world-famous name
nor zeal for war, but it will be the matched duel
that we always have: Liberty versus Caesar.

And here Lucan warns the Emperor Nero (who, ironically, he is planning to assassinate in the Pisonian conspiracy) to be mindful where he sets up his heavenly throne: if Nero sets it in the wrong spot, he would unbalance the cosmos:

When your watch is through
and you seek the stars at last, your chosen court
of heaven will welcome you, delighting the pole.
You could hold the scepter, or you may like to mount
Phoebus’ flame-bearing chariot, range the earth–
unfazed by the change of sun–with roving fire;
whatever you please: each god will cede to you,
and nature will relinquish her right to you
to be what god you will, install your world throne.
But do not choose your seat in Arctic regions,
nor in warm skies inclined to adverse south winds:
from these your gaze on Rome would be aslant.
If you weigh on any one part of boundless space
the axle will feel the load. Keep your weight
to the middle: balance heaven.

There’s no need for gods in Civil War because mortals can take the immortals’ places.

The Bad

Lucan’s Civil War is full of gladiatorial spectacle. In this regard, it’s similar to other Silver Age Latin works. The tragedies of Lucan’s uncle, Seneca the Younger, are also full of macabre scenes befitting of B-movie horror films. Maybe in some future age these scenes will come back into vogue. Here’s one of many such passages from Civil War:

That day offered
many marvelous forms of death upon the sea.
An iron claw swings quickly up onto a ship
and hooks Lycidas. He would have sunk in the deep,
but his comrades grab and hold him by the shins.
He is ripped to pieces, and his blood does not flow slowly
as from a wound, but floods everywhere from open veins,
and his soul that circulated through his various limbs
is absorbed by water. Nobody’s life has ever fled
through so large a passageway. His bottom half
took to death the limbs that had no seat of life.
But where the heaving lungs lay and the guts glistened,
there his fate was stalled; this half of the man
struggled a long time, till finally death got him all.

The Ugly

The speeches by the leading characters all seem to be spoken by the same voice: Lucan’s. They are all manic caricatures of their character types. Erictho, in conjuring the nether powers, becomes, not a witch, but the caricature of evil:

“If I call on you with a mouth that’s sinful
and polluted enough, if I never sing these songs
while still famishing for human entrails,
if I’ve often bathed a hacked-up breast
still full of soul divine and brains still warm,
if any infant whose insides and head I’ve laid
upon your platters would have lived if I had not–
obey me as I pray!”

Who talks like that? Or take the nihilistic Pompey. On the morning of the Battle of Pharsalus, he exhorts his troops thus:

“If all agree with this,” he said,
“and if the time needs Magnus as a soldier,
not as leader, I won’t transgress the Fates by stalling.
Let Fortune envelop the nations in one downfall,
let this day’s light be the last for a large portion
of humankind. But I call you to witness, Rome!
Magnus welcomes this day when all will perish.”

Who exhorts troops like that? Magnus becomes a caricature of fate. So too, the do-gooding Cato, exhorting the troops after the grievous loss at Pharsalus, becomes a caricature of virtue:

“You who have chosen to follow my standards
as the one safe thing, with unconquered necks
and unto death–train your minds on our great task,
the utmost toils of virtue. We are heading
for barren plains, the world’s burned-out wastes,
where Sun is too hot, water rare in the springs,
and dry fields crawl with deadly serpents.
The path to law and order is hard, and so is
the love of our fatherland, now falling to ruin.”

Some say that Cato and Pompey are the heroes of Civil War. I’m not so sure. They have become such concentrated versions of themselves that it’s hard to take them seriously. Caesar too is a caricature, but he is a caricature of action. He is Goethe’s Faust before there was Faust and Nietzsche’s will to power before there was a will to power. For example, when under siege and about to perish, Lucan’s Caesar is still acting and planning as though he was the besieger going forth conquering, and a conqueror. There is something attractive in his never say die mentality. The same cannot be said about the cardboard cutout characters Pompey and Lucan.

Fate and Fortune

A primary consideration in epic poetry from Homer to Milton is the antinomy between fate and free will. I published an article on fate and free will in the journal Antichthon. If you’re interested, it’s available here. In the Iliad, Zeus hold the scales of fate. If he holds the scales of fate, it would seem that fate bends to Zeus’ will. But it’s not so clear: when the scales of fate doom his mortal son Sarpedon, all Zeus can do is watch. Even though he holds the scales, the scales seem to operate on a higher level of agency. So too the devils in Milton’s Paradise Lost can be seen continuing the discussion Homer began so long ago in the Iliad:

Others apart sat on a hill retired,
In thoughts more elevate, and reasoned high
Of providence, foreknowledge, will, and fate,
Fixed fate, free will, foreknowledge absolute,
And found no end, in wandering mazes lost.

Unsurprisingly, Lucan also explores the generic convention of fate and free will in Civil War. Instead of fate and free will, however, in Lucan it becomes the antinomy between fate and fortune.

In Lucan, certain events are fated. Roman civil war itself is fated. Rome had become too great. Civil war is the mechanism for nations to return to nature’s mean:

Great things rush to ruin: the powers that give bounty
have set this limit on increase. Not to any foreign
nations did Fortune lend her envy to use
against the people ruling on land and sea.
Made slaves of three masters, you caused the damage,
Rome, with fatal bonds of tyranny never before
loosed against the crowd. Foul concord! Blinded
by depths of greed! What use to unite your strength
to hold the world in common? As long as earth
shall light on sea and air on earth, and labors
keep the Sun revolving, night following day
through the same sum of signs, no pledge to reign
as peers will hold. All power is impatient of equals.

Unlike in Homer and Milton where fate is fate and free will is free will, Lucan’s fate is more like Virgil’s fate where–though it is true that certain events are fated to happen (such as founding Rome)–the actions of mortals and immortals can precipitate or delay fate. So, Virgil’s Juno says:

But I, great wife of Jove–who left no thing
undared, who tried all ways in wretchedness–
am beaten by Aeneas. If my power
is not enough, I shall not hesitate
to plead for more, from anywhere; if I
cannot bend High Ones, then I shall move hell.
I cannot keep him from the Latin kingdoms:
so be it, let Lavinia be his wife,
as fates have fixed. But I can still hold off
that moment and delay these great events.

There’s an echo of Juno in Lucan, through the mouth of Erictho:

The evil Thessalian, thrilled to hear her name
was famous and well known, responded, “If you’d asked
of lesser fates, young man, it would have been easy
to rouse unwilling gods and attain your wish.
My art can cause delay when the rays of stars
have marked one death, or even if all constellations
would grant one an old age, we can cut his years
in half with magic herbs. But once a series of causes
has descended from the world’s first origin
and all fates struggle if you want to change anything,
when the human race is subject to a single blow,
then Thessaly’s ilk admits it–Fortune is stronger.

Fate, in Lucan’s Civil War, is like fate in Virgil’s Aeneid: you can speed it up or put it off a few years, but the hour of doom comes sooner or later. But notice a strange tilt in Lucan. Whereas fate and free will are at odds in Homer, Virgil, and Milton, Lucan uses fate and fortune interchangeably: fortune is stronger than Erictho’s resources when fate decrees it must be so. This deserves attention.

Some of you may know about my theory of tragedy based on risk. I argue that risk is the dramatic fulcrum of the action. It is also profitable to analyze risk in Civil War. The world of Civil War is one that rewards risk takers. Two characters in Lucan’s epic get things done: Caesar becomes top dog and Cleopatra wrestles her kingdom back from her brother. What do they have in common?–both Caesar and Cleopatra throw risk to the winds. Lucan’s Caesar and Cleopatra are both daring, both reckless. They are risk takers, natural-born gamblers.

Cleopatra, for her part, sneaks into the palace to seduce Caesar:

Such a daring spirit she got from that first night
when our own generals lay wrapped up in bed
with Ptolemy’s incestuous daughter. Who
will not forgive your raving love for her, Antony,
when fire even consumed the hard heart of Caesar?

Caesar, for his part, also does what needs to be done, risk be damned:

But Caesar, reckless in everything,
thinks nothing is done if anything’s left to be done.

While the narrator in Civil War pays homage to Cato and Pompey, the gamblers come out ahead. In a way, Civil War says one thing, but does another. It keeps the reader guessing what the actual message is, if there is any message.

Skin in the Game

A few years ago, Nassim Nicholas Taleb wrote a fantastic book: Skin in the Game. Success, he argued, happens when you have skin in the game, when you have a stake in the outcome. Caesar and Pompey’s speech to the troops illustrates the importance of having skin in the game. Compare how they address their troops:

Pompey: If all agree with this
and the time needs Magnus as a soldier,
not as leader, I won’t transgress the Fates by stalling.
Let Fortune envelop the nations in one downfall,
let this day’s light be the last for a large portion
of humankind. But I call you to witness, Rome!
Magnus welcomes this day when all will perish.
. . .
I’d wish the first lance of this deadly war
would pierce this head, if it could fall without
upsetting the balance, or destroying our party.
For victory will not bring more joy to Magnus.
Today, once this massacre’s been committed,
Pompey will be a name that’s either hated
or pitied by all peoples. This final cast of lots
for everything will bring all evils on the vanquished.
All the guilt will fall upon the victor.

Caesar: Breaker of the world, in all my affairs the fortune,
soldier, the riches of battle so often longed for
lie at hand. There’s no more need for prayers.
Summon fate now with your sword! In your hands
you hold the greatness of Caesar! Today is the day
I remember was promised me at the Rubicon’s waves,
and looking forward to this we took up arms,
postponing our return for triumphs denied us
until today, which will prove, with Fate as witness,
who took up arms more justly. This engagement
will render the loser guilty. If for me you’ve assaulted
your fatherland with fire and iron, fight now
all the more savagely and with your sword
free yourselves from guilt. For if the other side
becomes the judge of war, no hand will be clean.
This struggle is not for me, but so that the lot of you
might be free, hold power over all nations,
that’s my prayer.

Pompey asks the senate troops to fight for God knows what. Caesar, on the other hand, gives his troops skin in the game. The troops, he tells them, fight for Caesar’s greatness. Not only that, they fight for the triumphs the senate denied them. And, on top of that, they fight for their freedom: if they lose, they will be punished as traitors. They fight for their lives and win. This is the power of skin in the game. Caesar knows the power of skin in the game. Pompey doesn’t. To me, this is one of the mysteries of Lucan’s Civil War: for all the narrator extols Pompey, Pompey is sure dense. With that sort of exhortation, of course he gets routed at Pharsalus.

A Note on the Translator’s Introduction

I was surprised to see this passage in the translator’s introduction:

Alexander was a notorious admirer of Homer and Achilles: Caesar, too, is possessed by the glorious myths of Troy. If history-as-narrative had derived from the deep stream of Homeric epic, history-as-action was also always driven by men who were avid readers of epic, fired by its prize of immortal glory for heroic exploits. But it is possible these great men are simply, but tragically, poor readers of epic, deriving from it the wrong lessons, deluded by false notions of the heroic. After all, Achilles’ rage was “destructive” and for himself it results only in grief and the noble gesture of pity for his fallen enemy, the fatherly king Priam. [emphasis added]

If Alexander and Caesar are poor readers of epic, then who is the good reader of epic, the one who can derive from epic the correct lesson?

In all likelihood, many readings of poetry, epic, and literature are possible. For those seeking immortal glory, the myths of Troy have their allure. And that is all. There is no lesson. I don’t think Homer was meaning to say: “Look, I said Achilles’ rage was “destructive,” look what it did to poor Priam. Please don’t be like Achilles. He’s not a good role model.” That’s what the translator’s introduction seems to say to me, that the translators are good readers of epic, and, as good readers, have correctly derived the lesson Homer was trying to teach readers, that attaining immortal glory for heroic exploits is wrong because of all the suffering it involves.

Epic is life transformed into immortal glory. Sure, there’s suffering and destruction, but that’s the price. Don’t believe me? Then take Helen’s words in Homer’s Iliad to heart (Helen to Hector):

But come now, come in and rest on this chair, my brother,
since it is on your heart beyond all that the hard work has fallen
for the sake of dishonoured me and the blind act of Alexandros,
us two, on whom Zeus has set a vile destiny so that hereafter
we shall be made into things of song for the men of the future.

Suffering is justified, says Helen, so that we can be remembered forever. So too the destructive civil war allows Lucan to make Caesar and Pompey into a song for the men of the future (narrator speaking):

O sacred mighty work of poet-seers,
you rescue everything from fate and grant
eternal life to mortal peoples. Caesar,
don’t be touched by envy of sacred glory.
For if Latin Muses have a right to make a promise,
as long as Smyrna’s singer endures in honor,
the future will read you and me: our Pharsalia
will live, not condemned to shadows in any age.

For so much destruction, we have Lucan’s Pharsalia, otherwise called Civil War. In future ages, those who seek eternal renown will add the name of Caesar to the roll-call of heroes who achieved immortality. And also in future ages, someone too will tell these glory seekers that they are poor readers of epic. But who will be remembered–the glory seekers or their critics? Would you rather be a good reader who is forgotten soon or a poor reader who is remembered forever?

I wanted to like Lucan’s Civil War more than I did. Lucan, if Fortune had vouchsafed you to write Civil War in your seventies, you would have outshone Virgil and rivalled Milton and Homer. But as it was, fate cut you down at age 25. Those whom the gods love die young.

Book Blurb

Lucan lived from AD 39-65 at a time of great turbulence in Rome. His Civil War portrays two of the most colorful and powerful figures of the age–Julius Caesar and Pompey the Great, enemies in a bloody and convulsive struggle for power that severed bloodlines and began the transformation of Roman civilization. As law and order broke down, the anarchy that resulted left its mark on the Roman people forever, paving the way for the imperial monarchy. Matthew Fox’s verse translation brings Civil War to life for a new generation of readers while retaining the rhetorical brilliance of the original, creating a new definitive edition of this classic.

Author Blurb

Marcus Annaeus Lucanus (A.D. 39-65) was the nephew of the philosopher Seneca and close friend of the young emperor Nero, until a poetic rivalry and possibly political differences led to their falling out and Lucan being banned from both reciting his poetry in public and pleading in the law courts. He was a prolific and popular poet, but his only work to survive is his Civil War, a trenchantly anti-Caesarean epic about the fateful struggle between the rival leaders Julius Caesar and Pompey the Great, which ended in disaster for the Roman Senate at Pharsalus in 48 B.C., the battle which forms the poem’s dramatic climax. In A.D. 65, after the great fire had ravaged Rome and with much discontent against Nero simmering across the empire, Lucan joined the Pisonian conspiracy to assassinate the emperor, which failed and resulted in the execution by forced suicide of many of those involved. Along with his uncle, the author Petronius, and many other prominent Romans, Lucan took his own life, reputedly dying while reciting defiant verses from his epic. Since antiquity Lucan’s poem has been read as part of the classical canon, alongside the works of Virgil and Ovid. Its influence on the literary tradition from medieval to modern times is considerable, while Lucan’s death created a legacy of literary-political martyrdom that fired the imagination of revolutionary thinkers from the Renaissance to the many revolutions of the eighteenth and nineteenth centuries.

Translator Blurb

Matthew Fox studied Classical Languages and Literature at the University of Oregon and earned his Ph.D. in Comparative Literature and Classics at Princeton. He has taught classics, anthropology, humanities, and writing at Princeton, St. Peter’s College (NJ), Deep Springs College (CA), where he held the Robert B. Aird Chair in Humanities, and Rutgers University, and now teaches at Whitman College (WA). His research focuses on the classical epic tradition and ancient cultures of poetic and musical performance.

Don’t forget me. I’m Edwin Wong and I do Melpomene’s work.

Wishing Shelf Book Awards Reviews THE RISK THEATRE MODEL OF TRAGEDY

Anonymous feedback for writers is valuable because there’s always the risk of failure, of a negative review. I’ve had my share of these, but not today. Thank you to UK literary awards WISHING SHELF for reviewing my book on literary theory. I’m particularly happy to see how their readers found the book approachable and recognized that approaching theatre from the perspective of risk works. Here’s what their assiduous readers had to say:
 
Title: The Risk Theatre Model of Tragedy: Gambling, Drama, and the Unexpected
Author: Edwin Wong
 
Readers’ Comments
‘Theatre analyzed in terms of risk! What a very clever way of looking at things. This author seems to be a very smart fellow. Intriguing.’ Male reader, aged 72
‘What I loved the most about this was how original it was. I read a lot of theatre-related books and this was totally different. The writing is concise and the author’s knowledge of the subject is apparent on every page.’ Female reader, aged 52
‘An interesting, thought-provoking look at classical theatre and risk and how modern theatre must find a way of relating to the modern audience. Although it’s rather wordy and a little re-reading was often in order, it was still a gripping read.’ Female reader, aged 61
‘A cleverly worked out theory on risk/tragedy in theatre and how the audience can connect to it.’ Male reader, aged 52
 
Star Rating: 4.5 Stars
Number of Readers: 17
Stats
Editing: 8/10
Writing Style: 7/10
Content: 9/10
Cover: 10/10
Of the 17 readers:
14 would read another book by this author.
17 thought the cover was good or excellent.
11 felt it was easy to follow.
14 would recommend this story to another reader to try.
Of all the readers, 12 felt the author’s strongest skill was ‘subject knowledge’.
Of all the readers, 5 felt the author’s strongest skill was ‘writing style’.
15 felt the pacing was good or excellent.
14 thought the author understood the readership and what they wanted.
 
To Sum It Up:
‘A thought-provoking look at tragedy in theatre. A FINALIST and highly recommended.’ The Wishing Shelf Book Awards
 
Until next time, I’m Edwin Wong, and I’m doing Melpomene’s work

It’s Conferencing Time – Taking Risk Theatre on the Road

This isn’t the first time risk theatre has been on the road. Enthusiastic audiences have heard about this new theory of tragedy at the University of Calgary, the Society of Classical Studies AGM, the University of Massachusetts Boston, and the University of Victoria. This last year though, with the publication of the book, my day job (yes, I have a full time day job), and the Risk Theatre Modern Tragedy Competition, I haven’t had a chance to take risk theatre on the road. Now that things are settling down, it’s time to go in itinere, as they say in Latin.

I’ve lined up an October 29 lecture at Okanagan College. A talk on tragedy is perfect for Halloween. Thank you Terry Scarborough for the invitation! And another opportunity popped into my inbox to speak at a conference in Austin, Texas next year. What a dream, a trip to the Lone Star State! The organizers wanted a 800 word abstract, and I’m sure the competition will be tough to get into this prestigious conference. The text of my proposal is included below for your reading pleasure. Will it be good enough? “New theory of tragedy” for the headline–you’d think that would get some attention. Doesn’t everyone want a new theory of tragedy? Fingers crossed!

PS I have a pet peeve. Although Seven against Thebes is probably more correct (prepositions are not capitalized), it just looks wrong. And what is worse, ugly. Any right minded person with a sense of aesthetics–to me at least–would write it Seven Against Thebes.

Until next time, I’m Edwin Wong, and I’m doing Melpomene’s work.

Aeschylus’ Seven Against Thebes, Probability, and a

New Theory of Tragedy

In Euripides’ Bacchae, the worst-case scenario happens to Pentheus if the stranger spreading a seditious cult happens to be a god, and not a hobo. In Shakespeare’s Macbeth, the worst-case scenario happens to Macbeth if his opponent happens to be not born of woman. In Miller’s Death of a Salesman, the worst-case scenario happens to Loman if he discovers that his insurance policy makes him worth more dead than alive. In Sophocles’ Oedipus rex, the worst-case scenario happens to Oedipus if he finds out that he is the regicide. What were the odds of the worst-case scenario happening in each of these cases? Although the odds appear to be a longshot, they are impossible to quantify. In the tragic canon, there is one play—and one play only—where it is possible to quantify and demonstrate the odds of everything that does happen and does not happen. This fascinating play is Aeschylus’ Seven Against Thebes.

In Aeschylus’ Seven, seven attacking captains—one of whom is Polyneices—lay siege to seven-gated Thebes. Seven defending captains—one of whom is Polyneices’ brother Eteocles—defend Thebes’ seven gates. The worst-case scenario takes place if brother confronts brother at the seventh gate: brother will kill brother, kindred blood will be shed, and, in addition to the normal hazards of warfare, miasma results and the Furies will be unleashed. Because the captains are assigned their gates by a random, lottery process (Hermann, 2013), it is possible to precisely quantify the odds of the worst-case scenario. The worst-case scenario odds are 1:49. Conversely, the odds that the worst-case scenario does not happen are 48:49. The worst-case scenario is therefore an unexpected, low-probability outcome with odds 48 to 49 against. Most of the time, Polyneices will not encounter Eteocles at the seventh gate. Because the peculiar structure in Seven (seven attackers, seven defenders, and seven gates) allows us to work out all the permutations and combinations of the captains at the gates, we can determine the odds of the worst-case scenario. And, because we can determine the extent to which Aeschylus paradoxically brings about the fated event seemingly against all odds, we can quantitatively verify what we had suspected from watching Bacchae, Macbeth, Death of a Salesman, Oedipus rex, and other tragedies, and that is that unexpected and unanticipated low-probability events happen with alarming frequency in tragedy. What is more, these low-probability events carry the highest consequences. Heroes’ best-laid plans are often dashed because of such events and all is lost.

The observation that low-probability events (low-probability from the point of view of the characters who do not see them coming) can have high-consequences leads to an interesting conjecture: what if tragedy is a theatre of risk, a stage where risk is the dramatic fulcrum of the action? In other words, the mystique of tragedy is not so much wrapped around motivations and nobility and flaws but around a hero who, by taking on too much risk, triggers exceedingly low-probability, high-consequence events?

My paper will close by exploring, as a point of further thought, how tragedy can be thought of as “risk theatre” and how risk theatre can be the basis of a bold new 21stcentury theory of tragedy, one which resonates with modern preoccupations with chance, uncertainty, and probability. Risk theater asks, “What if something happens that we did not think would happen?” and understands that tragedy dramatizes the limitations of intention against the vastness of the possible. Tragedy, in this view, is an exercise in risk management: by dramatizing risk, audiences emerge from the theatre with a higher sensibility of unintended consequences. By understanding this, ancient tragedy can powerfully speak to modern audiences who see scientists, engineers, and policy-makers gamble with the future of the world: it might happen the way they think it will happen, but, then again, more can happen than what their models project. With our technological, financial, and military wherewithal, we have a moral imperative to better understand risk, and the best way to examine risk is through tragedy.

Bibliography

Hermann, Fritz-Gregor. “Eteocles’s Decision in Aeschylus’ Seven against Thebes.” In Tragedy and Archaic Greek Thought, edited by Douglas Cairns, 39-80. Swansea: Classical Press of Wales, 2013.

Skin in the Game: Hidden Asymmetries in Daily Life – Taleb

2018, Random House, 279 pages

Book Blurb

From the New York Times bestselling author of The Black Swan, a bold new work that challenges many of our long-held beliefs about risk and reward, politics and religion, finance and personal responsibility.

“Skin in the game means that you do not pay attention to what people say, only to what they do, and to how much of their necks they are putting on the line.”

In his most provocative and practical book yet, one of the foremost thinkers of our time redefines what it means to understand the world, succeed in a profession, contribute to a fair and just society, detect nonsense, and influence others. Citing examples ranging from Hammurabi to Seneca, Antaeus the Giant to Donald Trump, Nassim Nicholas Taleb shows how the willingness to accept one’s own risks is an essential attribute of heroes, saints, and flourishing people in all walks of life.

The phrase “skin in the game” is one we have often heard but rarely stopped to truly dissect. It is the backbone of risk management, but it’s also an astonishingly rich worldview that, as Taleb shows in this book, applies to all aspects of our lives. As Taleb says, “The symmetry of skin in the game is a simple rule that’s necessary for fairness and justice, and the ultimate BS-buster,” and “Never trust anyone who doesn’t have skin in the game. Without it, fools and crooks will benefit, and their mistakes will never come back to haunt them.”

Author Blurb

Nassim Nicholas Taleb spent twenty-one years as a risk taker before becoming a researcher in philosophical, mathematical, and (mostly) practical problems with probability. Although he spends most of his time as a flâneur, meditating in cafés across the planet, he is currently Distinguished Professor at New York University’s Tandon School of Engineering. His books, part of a multivolume collection called Incerto, have been published in thirty-six languages. Taleb has authored more than fifty scholarly papers as backup to Incerto, ranging from international affairs and risk management to statistical physics. Having been described as “a rare mix of courage and erudition” he is widely recognized as the foremost thinker on probability and uncertainty. Taleb lives mostly in New York.

Great Writers Give You Great Ideas

Taleb, as assiduous readers will recall, planted the idea in my mind that a theory of tragedy could be based on risk. While wandering around the big Borders bookstore in Providence Place Mall one evening, his book Fooled by Randomness jumped out at me. Around this time, I had been reading a pile of economics books: A Random Walk Down Wall Street by Malkiel (recommended) and various books by Jeremy Siegel (less recommended). It was at this time I discovered concepts like the efficient market hypothesis and that finance is really quite interesting. There was also a personal reason to learn about investing. My seven year fairy-tale run in academia was coming to an end and it was time to become a civilian again. I still had an investment portfolio that, believe it or not, I had still been adding to while in university (to the tune of $25 or so a month–saving is a hard habit to break). I hadn’t really done anything with it since the Bre-X and Dot Com crash of 1999, but I figured it was time to get back into the game.

1999 was a bad year for investing. My Royal Bank advisor had steered me into tech (it’s the new economy) and precious metals (another hot sector) mutual funds. In addition to exorbitant management fees (round 3% those days), both sectors crashed. Panicked and bummed out, I sold and, by selling, locked in my losses. I lost interest in investing for six years. After which time, I decided if I was going to get back into the game, I would learn how the system worked and do everything myself in a self-directed account. So, I picked up Taleb’s Fooled by Randomness to become a better investor. But the unanticipated outcome was that I would also base a theory of tragedy around the impact of low-probability, high-consequence events. But hey, that’s another story. Back to Taleb.

Hidden Asymmetries in Daily Life

The book’s subtitle is “Hidden Asymmetries in Daily Life.” What does that mean? Taleb’s argument is that symmetrical situations in which risk and reward are balanced are preferable to asymmetrical situations in which rewards can be had without risk. Take, as an example, building a house. The best case scenario is if you build the house yourself because you’re taking on the risk (if could go over budget, the design could be faulty, etc.,) and reaping the potential reward (if it goes well you save a bunch of money). When you take on risk for a shot at a reward, you have skin in the game.

But let’s say you don’t know how to build a house. You’d have to hire a general contractor (GC) to frame the house and look after the plumbers, electricians, glazers, and other subtrades. The good thing is that you have a pro to build your house. The bad thing is that the risks and rewards to your pro are less symmetric: he doesn’t realize the upside. If the house: a) comes in under budget, b) is built to higher standards, or c) is built three months ahead of schedule the GC doesn’t realize the benefits. To him, the risks and rewards are asymmetric. In other words, he doesn’t have as much skin in the game. Taleb’s solution: incentivize the GC with a performance bonus. That way the homeowner and the GC align their risks and rewards. They place their goals on a less asymmetrical and a more symmetrical footing.

That’s the gist of the book: have skin in the game. Talk is talk. Talk is cheap. You have to walk the walk. Don’t ask someone what hot stock to invest in or what their investing philosophy is. Simply see what they have in their portfolio. And beware of asymmetry: if you get advice where you, but not the person giving the advice, is exposed to the harm should the advice fail, run away.

Unsurprisingly, Taleb’s praise is directed to people who have skin in the game. He singles out the Roman emperor Julian the Apostate, who fought in the front lines on the eastern front. In a more recent example of noblesse oblige, during the Falklands War, Prince Andrew also fought on the front ranks, where the danger was the greatest. By taking responsibility for their privilege, they had skin in the game. Martyrs (who die for their beliefs) and businesspeople (who stake their own funds) are further examples of those who have skin in the game. Whistleblowers who face smear campaigns while protecting the public also win Taleb’s praise. In fact, one of the dedicatees of the book is Ralph Nader, who was a victim of an intimidation campaign when he called out General Motors for defective products.

Also unsurprisingly, Taleb’s ire is directed to people who, by gaming asymmetrical situations, profit off the system without putting skin in the game. Journalists, politicians, and academics (especially economists) win his ire. He singles out journalists on BNN or Bloomberg who recommend stocks while they themselves don’t hold positions. The situation is asymmetric because viewers are exposed to harm if the recommendation fails while the journalist gets a paycheque either way.

Taleb singles out politicians who bail out failing institutions: the politicians take the credit for saving the world while it is the taxpayers who fund the bailouts, not the politicians. Taleb devotes significant attention to Bob Rubin, a former Secretary of the United States Treasury. As Secretary of the Treasury under Clinton, Robert Rubin had opposed regulating collateralized debt obligations (CDOs), credit default swaps, and other derivative instruments that Warren Buffett would later refer to as “financial weapons of mass destruction.” After his tenure as Treasury Secretary, he received over $120 million from Citibank, which was rolling in the cash by offering these selfsame derivative financial instruments. But when these derivative instruments led to the 2008 financial crisis and banks needed to be bailed out, the bailout money came out of taxpayers’ pockets, not the pockets of folks like Bob Rubin who had made a fortune by promoting them. To Taleb, this “Bob Rubin Trade” showcases asymmetry: heads I win, tails the taxpayers lose.

Taleb also singles out academics, mainly economists. To Taleb, they come out with fancy economic models and give their models the stamp of approval with their academic credentials. But since academics are divorced from reality (one of his quotes runs: “In the academic world there is no difference between academia and the real world; in the real world there is”) their models seldom work. Economists create asymmetry because real world traders are exposed to harm if they use the economists’ models while economists continue to collect their salaries no matter whether they are right or wrong.

The Lindy Effect

An interesting concept that gains prominence in Skin in the Game is the Lindy effect. The Lindy effect (named after the New York delicatessen where the idea began) states that the longer something survives, the longer it is likely to survive. A Broadway play, for example, that has been playing for 400 days is likely to play for another 400 days. A religion that has been around for a thousand years can be expected to be around for another thousand years. A book that has been in publication for fifty years is likely to be in publication for another fifty years. If, after fifty years it is still in print, then it will likely last another hundred years. If after another hundred years it is still in print, then it will likely survive another 200 years. And so on.

What is the relationship between the Lindy effect and the idea of skin in the game? According to Taleb, concepts and ideologies also have skin in the game. The role of a writer, for example, should not be to please book reviewers (who are not experts and do not have skin in the game) but to please future readers. Time, to Taleb, is the ultimate arbiter. You can fool some of the people today, but if it stands the test of time, it’s legit. Take, say, a fashionable diet, something like the Atkins diet. It’s new, so who knows if it’s good or bad for you. But take fasting days. Many religions have had fasting days for a long, long time. Fast days are “Lindy proof.” They stand the test of time. Because they stand the test of time, they are very likely to be good for you. Consider also coffee (which has been around 600 years) versus today’s latest energy drinks (which have been around a decade). Which do you think will stand the test of time?

I’m not sure about this point, but what I think Taleb is saying with the Lindy effect is this: when you take risk, you have skin in the game, which is good. Risk and volatility is sort of the same thing: if the ride gets too volatile, it’s game over for your endeavour. Volatility and time are also sort of the same thing. So, when you’re taking risks to put skin in the game, you’re actually going one-on-one against time. If you have an idea, to put maximal skin in the game, you want to go against all the other ideas that were and will be out there. It’s a tough game, but there is a reward: the Lindy effect. If you make it to the top, chances are you’ll (or your idea) will stay alive. Not sure if that’s it, but that’s my interpretation of the Lindy effect as it relates to this volume.

Now, this is the fifth volume of Taleb’s Incerto series and it seems with the Lindy effect he’s come full circle. So, the Lindy effect says that something which has survived a long time will likely keep surviving. Unless, of course, this something runs into a black swan. Assiduous readers of Taleb will remember that the second volume of Incerto was called The Black Swan: The Impact of the Highly Improbable. The black swan phenomenon is when highly improbable events happen that change everything. Take the very idea of the black swan. The idea came from the Roman poet Juvenal, who said that “a good person is as rare as a black swan.” The punchline is, of course, that black swans don’t exist. So, for hundreds of years, the phrase “black swan” came to denote something that doesn’t exist. And, what is more, the Lindy effect made the “black swan” analogy more and more prevalent as time went on. Until of course, an actual black swan was sighted in Australia by a Dutch sailer in 1636. So, it was a black swan event (sighting a creature that was not supposed to exist) that brought an end to the Lindy effect on the original use of the term “black swan” as understood by Juvenal. It will be very interesting if, in a future work, Taleb pits these two contrasting phenomena against one another.

Does Risk Theatre Have Skin in the Game?

It’s always interesting to tie the books I’m reading back into what I’m doing. This keeps things real. It gives reading a purpose. Here’s a quote from Skin in the Game that confirmed I was on the right track:

The deprostitutionalization of research will eventually be done as follows. Force people who want to do “research” to do it on their own time, that is, to derive their income from other sources. Sacrifice is necessary. It may seem absurd to brainwashed contemporaries, but Antifragile [the previous title in the Incerto series] documents the outsized historical contributions of the nonprofessional, or, rather, the non-meretricious. For their research to be genuine, they should first have a real-world day job, or at least spend ten years as: lens maker, patent clerk, Mafia operator, professional gambler, postman, prison guard, medical doctor, limo driver, militia member, social security agent, trial lawyer, farmer, restaurant chef, high-volume waiter, fire-fighter (my favorite), lighthouse keeper, etc., while they are building their original ideas.

It is a filtering, nonsense-expurgating mechanism. I have no sympathy for moaning professional researchers. I for my part spent twenty-three years in a full-time, highly demanding, extremely stressful profession [he founded a hedge fund called Empirica Capital, which, coincidentally, bet on black swan declines in the stock markets] while studying, researching, and writing my first three books at night; it lowered (in fact, eliminated) my tolerance for career-building research.

For the last eleven years, I’ve been writing a book: The Risk Theatre Model of Tragedy: Gambling, Drama, and the Unexpected. But, the book was not enough. As Taleb would say, writing the book is like “talking the talk.” Like the Efficient Market Hypothesis, the Black-Scholes equation (for pricing options), and other economic models that Taleb disdains, the risk theatre model of tragedy, while not an economic model, is an academic model nonetheless. As an academic model, it could use some more skin in the game.

To give the risk theatre model of tragedy some more skin, I started up, with Langham Court Theatre, the 2019 Risk Theatre Modern Tragedy Competition. We would award cash prizes to dramatists worldwide to write risk theatre tragedies. We would help these dramatists develop risk theatre to the highest levels by workshopping their plays. And, to help offset travel and accommodation expenses, we’d offer a stipend for dramatists to come attend the workshop in Victoria, Canada.

To fund the book and the competition, I work a real-world job as a project manager for PML Professional Mechanical. I oversee $25 million of construction projects: a mixed use commercial building with Save-on-Foods as the anchor and two residential towers above for Bosa/Axiom, a distinctive condo called the B&W (it’s clad in sections of black and white bricks) for Abstract Developments, and two 20-storey towers for Chard Developments. In other words, I’ve got skin in the game. If Taleb’s thesis is correct, the book and the theatre competition stand a greater chance of success because I’m putting my money where my mouth is.  Here’s hoping. Time will tell.

Until next time, I’m Edwin Wong, and I’m doing Melpomene’s work. By the way, this is a great book. Read it. If you haven’t read any volumes in the Incerto series, and are looking for a place to start, you couldn’t go wrong with the second volume, The Black Swan.

The (mis)Behavior of Markets: A Fractal View of Financial Turbulence – Mandelbrot and Hudson

2004, Basic Books, 328 pages

Back Blurb

The (mis)Behavior of Markets offers a revolutionary reevaluation of the tools and models of modern financial theory. From the gyrations of the Dow to the dollar-euro exchange rate, mathematical superstar and inventor of fractal geometry shows us how to understand the volatility of markets in far more accurate terms than the failed theories that have brought the financial system to the brink of disaster. Updated with a new preface on the financial crisis of 2008, Mandelbrot’s insights are more valuable than ever.

Author Blurbs

Benoit Mandelbrot is Sterling Professor Emeritus of Mathematical Sciences at Yale University and a Fellow Emeritus at IBM’s Thomas J. Watson Laboratory. The inventor of fractal geometry, he has received the Wolf Prize in Physics, the Japan Prize in science and technology, and awards from the U.S. National Academy of Sciences, the IEEE, and numerous universities in the United States and abroad. His many books include Fractals: Form, Chance and Dimension, which later expanded into the classic The Fractal Geometry of Nature. He lives in Cambridge, Massachusetts.

Richard L. Hudson was managing editor of the Wall Street Journal’s European edition for six years, and a Journal reporter and editor for more than two decades. He is a graduate of Harvard University and a former Knight Fellow of MIT. Now the CEO and editor of Science Publishing Ltd., he lives in Brussels, Belgium.

A Fractal View of Financial Turbulence?

Fractal (from Latin frango “to break” e.g. fracture, fraction, fragment, etc.,) geometry was invented by Mandelbrot. It is a real-world, anti-Euclidean geometry in that it is the geometry of rough surfaces as opposed to the straight lines and perfect planes of Euclid. You can use fractal geometry to model structures where similar patterns recur in smaller and larger scales: for example cauliflower heads (a small head is a smaller version of a larger head) or coastlines (little nooks and crannies are scaled down versions of fjords). The immediate question than is: what do fractals have to do with financial turbulence? Well, the answer is that, rises and declines in stock prices also recur in similar and recurring patterns in smaller and larger time scales. For intuitive proof, compare one day, one month, one year, and one decade stock charts. Would you be able to tell, were the dates removed, which was which? Wall Street pros can’t. It’s just a bunch of wiggly lines. Wiggly lines that go back and forth like the coastline. And, like the coastline that exhibits self-similarity under 1x, 10x, and 1000x magnification, the stock chart exhibits self-similarity in one day, one month, or one year intervals.

This was Mandelbrot’s key insight, and a momentous one. It’s momentous because the implication is that, even if stock and commodity prices don’t go up and down randomly (they react to news, world events, and investor sentiment), their fluctuations can be modelled by the rules of probability as though they were random.

Late Work

One of the appealing things about The mis(Behavior) of Markets is that it is a late work. He turned 80 in 2004, the year the book came out. Long time readers of this blog will know that I’ve been a fan of late works for a long time: Beethoven’s Opus 111, Bach’s The Art of the Fugue, Mozart’s Requiem (unfinished at the time of death and played at his funeral), Nietzsche’s Ecce Homo, Sophocles’ Oedipus at Colonus (he successfully defended himself in court against charges of senility by citing his play), and Goethe’s second part of Faust. Directness of theme, abandonment of artifice, a brutal sense of honesty, a heartfelt and personal expression, a sense of possibility, and a glimpse of the bigger picture characterize the best late works. There’s an excellent book that talks about late style by scholar Edward W. Said entitled On Late Style: Music and Literature against the Grain. It’s fitting that that work is itself a late work.

Mandelbrot himself was keenly aware that he was himself producing a late work in writing The (mis)Behavior of Markets. Here’s a telling quote from the book (in the prelude written by coauthor Hudson):

In 2004, in his eightieth year, Mandelbrot continues making trouble. He works the same full schedule–including weekends–as he always has. He continues publishing new research papers and books, lecturing at Yale, and traveling the world of scientific conferences to advance his views. Why not? After all, as he points out, Racine’s most enduring play, Athalie; Verdi’s greatest opera, Falstaff; Wagner’s Ring Cycle–all were written in the twilight of life, when the artist, after years of experience and experimentation, was at the height of his powers.

Prejudice against the Speculative Markets

Mandelbrot devotes a chapter of the book to mathematician Louis Bachelier. Bachelier had dared to write base his dissertation on the volatility of bonds at The Bourse at the Paris exchange. His idea was that, although you could never know where future bond prices would end up, you could mathematically evaluate the odds of the fluctuations because bond prices would follow a ‘random walk’. The random walk is based on the random path of pollen grains suspended in water. And just as the path of pollen grains could be plotted on the bell curve, so could bond prices.

Unfortunately for Bachelier, academia deemed The Bourse to be to degraded of a place for true mathematicians. So, instead of graduating with a ‘trés honorable’ honour, he received a ‘mention honorable’. This consigned him to a life of obscurity. It wasn’t until the 1950s, a decade after his death, that his star picked up. Some are born posthumously.

Now it seems that the prejudice against true mathematicians working in finance remains to us today. Since my childhood, I’ve loved reading science books. Inevitably, each one will mention Mandelbrot and how fractal geometry is the best thing since sliced bread. But, you know, I don’t think any of them talked about Mandelbrot’s pioneering work in the 1960s examining price volatility in cotton markets (in the 60s, historic data on cotton pricing was complete, readily available, and accurate). Since then, Mandelbrot has devoted a lot of time and published quite a bit on how markets work. Heck, Eugene Fama was one of his students (he supervised his dissertation). But it wasn’t until I stumbled on this book (probably through a Marketwatch or Bloomberg article) that I had any idea that Mandelbrot had anything to say about the markets. In fact, I was so surprised when I found out, I googled to see if this was the Mandelbrot or another fellow with the same name.

So, You Think You Know What Risk Is…

Risk can be many things. Risk can be loss. Risk can be when something happens that you didn’t expect would happen. These sorts of risk are hard to quantify. But, if risk is volatility, it can be quantified. Take the 52 week high and low of Apple stock. The range between the high and low is the volatility. This sort of volatility can be expressed mathematically, using the laws of probability–that’s why the economists like it. They put in into formulas and win Nobel Prizes.

Beginning with Bachelier, it was thought that, if one graphed the daily movements of a stock, the price data would arrange itself into the standard distribution of a bell curve. The mean price would fill out the familiar bulge in the centre of the curve, and the larger price swings would be captured in the ‘tails’ of the curve. The larger the price swing, the less probable it is to happen. The bell curve is popular because it fits many natural phenomena. Human height, for example, fits a bell curve: 68% of American men are between 68-72 inches tall; 95% are between 66-74 inches tall; 98% are between 64-76 inches tall. The bell curve doesn’t rule out a 10′ giant. But the tail at this extreme is so flat that you would never expect to see one. IQ scores and the returns on betting on a series of coin tosses also fit a bell curve.

The idea of using the standard distribution of the bell curve to represent market risk was so prevalent that when Bachelier was rediscovered in the 1960s, the standard tools of finance all took it up. As a result, the standard tools MBA students learn to model the market are all based on the mild and predictable sort of risk the bell curve predicts. These tools are: modern portfolio theory or MPT by Harry Makowitz, the capital asset pricing model or CAPM by William Sharpe, and the Black-Scholes formula by Fischer Black, Myron Scholes, and Robert Merton. Markowitz, Sharpe, Scholes, and Merton all received Nobel Prizes for their work. Black would have as well, if he had lived another two years (the Nobel is not awarded posthumously).

The question Mandelbrot poses is: what if the bell curve is wrong? What if the odds of catastrophic ‘tail’ events in the market such as the 29.2% decline on Black Monday (October 19, 1987) are a thousand or a million times more likely than what the standard model posits? And, what is more, what if the stock market has a memory?–the standard model is based on a random walk. Like how each flip of the coin, the daily movements of the stock market are independent of one another. But, what if, in the real world, volatility cascades? Cascades in that a 3% drop one day increases the odds that it will continue to fall in the following days? Mandelbrot’s answer? If the bell curve is wrong, then we are like shipbuilders who think gales are rare and hurricanes are myths. We sail into doom. And we encourage others to sail into the storm with the comfort of dead wrong economic models. It’s like if we planned a mission to go to Mars based on old Ptolemaic models of the solar system.

To show how the bell curve is a poor measure of risk, Mandelbrot provides examples from the cotton, commodity, and stock markets: the data doesn’t fit the curve. ‘Impossible’ tail events happen in reality far more frequently than the bell curve allows.

The Solution

This was the most confusing part for me. Mandelbrot himself says that the math isn’t complete. Just as Bachelier had to wait a good 60 years for the math to catch up to his ideas, Mandelbrot’s ideas of fractal turbulence may have to wait another generation or two. He himself says the math is very hard. This book is more a call to arms that something has to be done. He does offer some suggestions, though.

In addition to the standard, bell curve distribution, there appear to be other probability distributions. There’s the Cauchy distribution. And there’s also a whole family of L-stable or ‘Levy’ distributions. These other distributions, from what I gather, have fatter tails. But they too, don’t capture the how real world risk works. It may be that they overstate the odds of catastrophic tail events. And it does not appear possible to insert other types of probability distributions into the standard models of finance (e.g., Black-Scholes, MPT, and CAPM). All the standard model, for some reason that a mathematician would understand, use the bell curve because it fits into the equation. Here I could be wrong, but that’s what I’m gathering.

In the future, the multifractal model of financial turbulence might be able to create a ‘fingerprint’ of a stock’s volatility. Right now, one of our best models of risk is the VaR or ‘Value at Risk’ model (also based on the bell curve). You start off by deciding how safe you want to be. Let’s say the maximum loss you are willing to take in a year is 10%. You then find a stock using the VaR model where, 95% of the time, the losses will be 10% or less. How is this safe, asks Mandelbrot?–the point is that 5% of the time, the losses can be more than 10% and up to 100%. It is only the illusion of safety. But let’s say someone uses the multifractal model to create a fingerprint of a stock’s volatility. This, to me, would still be based on historic price data. If the company hasn’t gone out of business, would the fingerprint capture the possibility of the stock going bankrupt, or, in other words, going down 100%?

Mandelbrot says many times that it’s not possible to make money (yet) from this multifractal view of stock market volatility. That may be true, but I wonder…if all the standard models underestimate volatility (because they use the bell curve), then wouldn’t that mean that the market is underpricing volatility? There should be some way of betting on irrational gains and losses and making money. Let’s say the market is saying that the odds of a 10% daily collapse is 1:1,000,000. But the odds are actually higher, 1:100,000 or something like that. There must be some financial instrument you could use to short the market so that when the 10% daily collapse happens, you could clean up since you know the ‘true’ odds and the market, which uses the incorrect model, has mispriced that eventuality.

Another idea to make money: if volatility is greater than commonly thought, would that be an argument for buying an equal weight index rather than a market weight index? With an equal weight index, you would have the same constituent stocks as an index investor (in a market weight index such as the S&P 500). But since stocks bounce up and down from their ‘average’ or ‘mean’ price, each time you invest fresh money, you would buy whichever stock had fallen the most. If you used a buy and hold strategy, because volatility is greater, you should be able to pick up a couple of points over the market weight buy and hold investor. Or?

Of course, these ideas aren’t based on the multifractal model, but rather, on volatility itself. Perhaps the way to make money on the multifractal model would be to market it to a data company such as Thomson Reuters. Thomson Reuters would use the mathematical model to project future growth, volatility, and other parameters of a stock. It might even use the model to draw future stock charts and run them through Monte Carlo simulators. Investors would, in turn, use this information in putting together resilient and efficient portfolios which maximize return and minimize risk.

Betting on Volatility and Turbulence

I should mention that I’ve put money on a sort of equal weight index. In March 2015, I picked 20 small companies in my play portfolio. They were picked somewhat randomly, but not completely at random. Since, for the most part, I’m an index investor, and the Canadian TSX Composite is dominated by financials (banks and insurance), oil & gas, and materials (mining), one rule was that none of these 20 companies could be from these sectors. The idea was that I wanted the small-cap portfolio to zig when the TSX Composite was zagging. So I ended up picking some industrials, consumer staples, healthcare, and technology stocks. Why small-cap? Well, I wanted to capture volatility and small-caps tend to move up and down violently than their more stable large cap brethren. In this small-cap portfolio, the idea is never to sell. But whenever I added money to the portfolio, I would top up the stock that had been most hammered (to keep the portfolio equal weight). This way, when things turn around (which they will do unless your pick goes bankrupt), you’ll pick up a little extra because you’ve said yes to volatility. Why 20 stocks? Well, you have to have enough stocks to have some winners and losers. And you can’t have too many stocks that you’re just replicating the index. Between 20-30 seems like a good number where the losers will hit you, but not too hard and the winners will help you, but also not too much. If you have too few stocks, and just happen to pick the losers, you’re going to get really hurt. But if you have too many stocks, the winners aren’t really going to impact the portfolio that much. It’s a question of concentration.

It seems that some Paris firms are doing something similar and calling this a multifractal strategy. Mandelbrot dismisses such attempts in his book as being far from multifractal: to him, it is just betting on stocks ‘reverting to the mean’. He’s absolutely right. But I can’t help but think that if volatility is so great, and if volatility is the measure of how much a stock deviates from its mean price, then shouldn’t it be easy to pick up a few extra points by a continual buying and holding equal weight strategy? Here were my picks from three and a half years ago and the performance:

AG Growth International (AFN) +17.8%

AGT Food and Ingredients (AGT) -28.0%

Alcanna (CLIQ) -21.4%

Boston Pizza Royalty Income Fund (BPF.UN) -21.5%

Boyd Group (BP.UN) +133.5%

Capstone Infrastructure (CSE) taken private at a gain of +37.6%, used proceeds to buy Cipher Pharmaceuticals

Chemtrade Logistics (CHE.UN) -27.6%

Cipher Pharmaceuticals (CPH) -49.6%

Clearwater Seafoods (CLR) -39.0%

Descartes Systems (DSG)  +126.2%

Great Canadian Gaming (GC) +74.7%

Highliner Seafoods (HLF) -59.3%

Innergex Renewable Energy (INE) +17.4%

Intertape Polymer (ITP) -7.3%

K-Bro Linen (KBL) -20.2%

Morneau Shepell (MSI) +56.2%

NFI Group (NFI) +257.3%

Northwest Company (NWC) +13.7%

Park Lawn (PLC) +4.4%

Premium Brands (PBH) +246.5%

Student Transportation (STB) taken private at a gain of 38.9%, used proceeds to buy Park Lawn

Western One (WEQ) -44.2%

If you look at the returns, I think you’ll agree there’s no shortage of volatility: the best performer was NFI (a maker of buses and motorhomes) at +257% and the laggard was Highliner Seafoods (a maker of fishsticks) at -59%. In the portfolio, two stock more than tripled (NFI and PBH), two other stocks more than doubled (BYD and DSG), and three stocks lost more than 40% (CPH, HLF, and WEQ). The volatility is there.

But the question is, how did the portfolio do? In three and a half years, with dividends, it’s up 26.3%. That equates to a rate of return of 6.9% each year. Compare this to the S&P TSX Small Cap Index (market weight). Total return in the last three and a half years is 20.1% for an annualized return of 5.7%. The little equal weight portfolio has done well compared to the market weight index. But of course the results are statistically meaningless as the two portfolios hold different stocks. You’d have to compare a market cap to a equal weight portfolio tracking the same index to draw meaningful conclusions. Perhaps a topic for a future blog?

One insight, does, however, emerge from this small cap portfolio: the business model really gives you little idea of how a stock will perform. Who knew that a bus and motorhome manufacturer (New Flyer) would triple? Who knew that Premium Brand Holdings, a company that makes Starbucks breakfast sandwiches and the sliced meats you find at grocery stores would be a top performer?–geez, they just make black forest ham! Who knew that a worldwide lentil distributor would be down a third? Aren’t people supposed to be eating more lentils? Who knew that Highliner Seafoods would be down over half? Isn’t seafood consumption up and growing? And why is K-Bro Linen down a fifth?–don’t they have the lock on hospital linen cleaning contracts in all the major cities?

If you had asked ten experts three and a half years ago to predict where these 20 stocks were going, I don’t think any of them would even be remotely close. You would have to have known that India would have frozen out Canadian lentils (AGT). You would have to have known that the government would have stripped CLR of part of their arctic clam license. You would have had to have predicted that oil would go down to twenty dollars a barrel (WEQ). You would have had to have predicted Valeant’s business model would explode, dragging down the whole pharmaceutical industry (CPH). How could anyone have known? And you know, it’s going to be like this going forwards. The things that will affect this small cap portfolio are the things we don’t know yet. Until then, I’ll keep picking up a few points on volatility. That I do know will be there. Funny, the only certain thing is that things are uncertain.

A Mystery

Mandelbrot spends a bit of time talking about power laws. Instead of a bell curve distribution where the tails are imperceptible, cotton prices, wheat prices, interest rates, and some stocks follow a power law distribution which allows for large price swings. Gravity and earthquakes also follow a power law distribution: double the distance or power, and the force of attraction or the frequency is four times less. In a section of the book, Mandelbrot tells the story of Harold Edwin Hurst, a hydrologist who cracked the code of how high to build a dam to tame the Nile.

The problem with calculating how high to build the dam was that the Nile would not only experience really dry and really wet years, but also that the wet and dry years would cluster together in an unpredictable pattern. In his attempt to understand flooding, Hurst looked through any reliable, long-running records on climate he could find, from tree ring growth, sunspot patterns, discharges from Lake Huron, and annual water levels at Lake Dalalven in Sweden. People thought he was a crack, since how could such varied phenomena be related? He looked through 51 different phenomena, and found that everywhere he looked, the range obeyed a three-fourths (0.73) power law. It was as though this three-fourths power law is a constant of nature. Now this is interesting. It makes me want to learn math so that I can figure out why this is. This is one of these questions that you could spend your life looking into.

I have to agree with Taleb that this is “the deepest and most realistic finance book ever published.” I read it three times. And, if I didn’t have a stack of other deserving titles, I would have read it a fourth time.

Until next time, I’m Edwin Wong, and I’m doing Melpomene’s work.

Low-Probability, High-Consequence Events in Greek Tragedy: Aeschylus’ Seven Against Thebes

Thanks to Professor LB and the Department of Greek and Roman Studies for setting up this seminar. And thanks to all the students and faculty who came out on a cold and snowy Friday afternoon. Great turnout (we packed the conference room) and very receptive audience for this homecoming lecture. Judging from the discussion period that followed the presentation, there’s a sharp band of students at UVic! My old roommate TS from the happy days of UVic undergrad (who’s know Professor TS of English Literature) received a research grant to fly out to hear the talk, so that was extra fun! The core of this presentation was delivered at the APA earlier this year. This version has been revised to take into account the feedback from APA which was: hammer home the point that the gate assignations are random. The preconceived (and likely mistaken) notion that Eteocles decides the assignations remains very strong with readers of the play. If the assignations are random (as I argue), the play is actually quite fun, dramatic, and full of suspense. If the assignations are decided and preordained (as others argue), the play is quite static. Which would you rather have? BTW the image on the poster is from the Exekias Vase and it depicts Achilles and Ajax playing dice. Probably a high-stakes game as they have their spears handy just in case!

Exekias Vase

DEPARTMENT OF GREEK AND ROMAN STUDIES SEMINAR

FRIDAY, FEBRUARY 23 2:30 PM CLEARIHUE B415

 

Low-Probability, High-Consequence Events in Greek Tragedy: Aeschylus’ Seven Against Thebes

 

I present to you a question: does it seem that tragedy in general—not just Greek tragedy—goes out of its way to dramatize low-probability, high-consequence outcomes? Low-probability refers to events are that are unlikely, events that are 1000:1 against, events such as Birnam Wood coming to Dunsinane Hill. In Shakespeare’s play, the witches tell Macbeth that nothing can harm him until Birnam Wood removes to Dunsinane Hill. It’s highly unlikely that the trees will take up their roots and hike up the hill. But when the troops camouflage themselves under Birnam Wood, the high-consequence event unfolds. Macbeth is caught flat-footed. All is lost.

 

We see something similar in Sophocles’ Oedipus rex. The messenger comes out of left field to tell Oedipus that he’s inherited the Corinthian throne, and, oh, by the way, your parents aren’t who you think they are. How do I know that?—well, I saved you when you were a babe and your real parents had exposed you. Who are my real parents?—well, you have to ask the shepherd. What are the odds of a messenger, and not any messenger, but this messenger coming to Thebes at this exact moment? It’s as likely as Birnam Wood coming to Dunsinane Hill. But it happens, and the outcome has high consequences, as Oedipus goes from being a king to an outcast.

 

This presentation is on how tragedy dramatizes low-probability, high-consequence events. But there’s one problem: how do we know that an event in tragedy is unlikely? Something has to happen, and anything that happens is, in a way, unique. How do we quantify the odds of what takes place against what did not take place?

 

Aeschylus’ Seven Against Thebes is the one unique play where it’s possible to quantify the odds of what didn’t happen. In Seven, seven attacking captains lay siege to seven-gated Thebes. One brother, Polyneices, marshals the attack. Inside Thebes, the other brother, Eteocles, coordinates the defence. The worst-case scenario occurs if the brothers meet at the seventh gate. They would shed kindred blood and miasma would result. If they go to different gates, the worst-case scenario is averted. Or, if they find themselves at a gate prior to the seventh gate, Eteocles could substitute another captain in his place. But the worst-case scenario occurs if they’re both at the final gate, as substitutions are no longer possible.

 

With seven gates, seven attackers, and seven defenders, what are the odds of the worst-case scenario? Let’s look at this this way. What are the odds of rolling a six on a six-sided die? There’re six equally probable outcomes, so the answer is 1:6. Now what are the odds of rolling two sixes? The outcome of two independent rolls is the product of their individual probabilities. 1:6*1:6=1:36. Now, if there are seven gates, and the assignations are random, there’s a 1:7 chance that Eteocles goes to the seventh gate. The odds of Polyneices going there are the same, 1:7. So we multiply the odds together and find that, the odds of the worst-case scenario is 1:49. Now, what are the odds of the worst-case scenario not happening? The answer is 48 out of 49 times. See how Aeschylus doesn’t dramatize the likely scenario, but rather the worst-case scenario which is 48:1 against. Thanks to Seven, we can quantify how tragedy goes out of its way to deliberately dramatize low-probability, high-consequence events.

 

But—how do we know that the process of assigning gates to the attackers is random? Easy. The scout tells us:

 

As I was leaving

they were casting lots (klhroumevnou~), each to divine by fortune

against which of our gates he would lead his battalions (77-9, trans. Hecht & Bacon)

 

Since the attackers draw lots, it stands that Polyneices’ chance of going to the seventh gate is 1:7. How do we know that the process of assigning gates to the defenders is random? That’s harder. It’s not explicit. Eteocles tells us at the conclusion of the first episode that:

 

I will go and assign six men, myself the seventh,

all fully armed oarsmen,

against the champions at the seven exit-points of the city. (357-60)

 

Now, when he says that he “will assign six men, myself the seventh” he doesn’t necessarily mean he’s stationing himself at the seventh gate. So why say this odd phrase?—“assign six men, myself the seventh.” I like Roisman’s explanation: “it is an image of bad luck, since the number 6 + 1 [in dice games] was considered an unlucky throw.”[1] I want to seize and expand this point. There’s something ludic about this play; it exudes a sort of gambling hall or lottery atmosphere. We’ve already talked about how the attackers draw lots and the unlucky 6 + 1 gambling reference. Let’s add to this. For instance, Eteocles remarks as he dispatches Melanippus to face Tydeus that: “The chances of battle are as dice (kuvboi~) in the hands of Ares (511).” What other gaming references are there? Well, when Eteocles interprets the matchup between Hippomedon and Hyperbius, he says: “Hermes, by divine reason, has matched this pair (624).” Hermes, as Hecht and Bacon note, is invoked in his capacity as the god of luck and fortunate coincidence. Finally, the scout tells us after the brothers die that “they have shared out by lot (dievlacon) their full inheritance (1039).” The lottery image, along with the ship of state image, are the two dominant metaphors of this play. Because of the lottery imagery, I’m convinced that a random process must be involved in how Eteocles assigns the defenders. After all, why would he say that “Hermes, by divine reason, has matched this pair” unless they were brought together under Hermes’ tutelage as the god of lots? And why would the scout say that the brothers “have shared out by lot their full inheritance” unless a lottery process was involved in the assignations?

 

I want to share with you that Seven was the first Greek tragedy I read. When I first read it, I thought for sure that Eteocles decides the assignations on the spot, during the shield scene itself. The scout would report and he would say: “Oh, I just have the right guy to neutralize him.” In hindsight, that’s a very modern reading as that’s how a general would decide today. But how would this fit in with the lottery images? It doesn’t. Later I read Zeitlin’s Under the Sign of the Shield where she points out that Eteocles clearly says he’s going to decide the assignations before he meets the scout.[2] But then I thought: “Eteocles decides?—then what’s the point of all the lottery and gambling images?” Then I heard Weckler and Wilamowitz’ argument that some assignations are done before, and some during. While this solves the problem of the tenses, as during the shield scene sometimes Eteocles says “I shall station,” and at other times “He has been chosen,” it seems unnecessarily complicated. Because of the lottery references, I was ready to say that Eteocles decides by lot before he meets the scout. But when I recently read Herrmann’s conjecture, I was immediately convinced: he conjectures that Eteocles decides by lot during the shield scene itself.[3] Herrmann’s conjecture is brilliant. When Eteocles says that he’s going to assign the men before the scout comes, he’s putting their names in the helmet. As for the tenses, as he picks up the lot he can be saying “I will appoint” or “He has been already appointed.” Furthermore, Herrmann’s conjecture gives Eteocles something dramatic to do during the shield scene and, what is more, it means that, the defender assignations, like the attacker assignations, are random. Because all the assignations are random, all the possible matchups at each of the gates exist only as a probability until the moment when the lots are drawn. Because all the outcomes exist as probabilities, we can quantify the exact odds of what takes place against what did take place to verify how tragedy engages audiences with low-probability, high-consequence scenarios.

 

Could Aeschylus and his audience have worked out that the worst-case scenario is averted 48 out of 49 times? No. Sambursky, a historian of science, finds that the lack of both algebraic notation and systematic experimentation held the Greeks back from discovering the laws of probability.[4] The laws of probability would not develop until Cardano starts counting up the number of throws possible with dice two millennia later. But we know that the Greeks were able to understand the concept, if not the math of combinatorial analyses. Xenocrates, for example, mistakenly calculates that, by mixing together the letters of the alphabet, 1,002,000 unique syllables are possible.[5] Despite not being able to compute the exact odds, Aeschylus and his audience would have recognized that the odds of the brothers meeting at the highest gate was an exceedingly low-probability affair.

 

Besides the objective remoteness of the worst-case scenario, what subjective cues give Eteocles hope things will go his way? First, there’s the enemy’s disarray. Their morale is so low that they’re already dedicating memorial tokens to send back home. One of their captains says outright that he’s going to die. They also attack before their seer gives the signal. And there’s infighting between their captains. Contrast this with the improving morale of the chorus of Theban women, who function as a barometer of morale within the city: they start off in panic, but by the first stasimon, Eteocles wins them over. Many indications give Eteocles subjective hope.

 

The surest indication that things will go his way comes in the shield scene. In the shield scene, the scout describes, gate by gate, the attacking captain’s appearance, demeanor, and shield device. Eteocles, in turn, draws the lot to determine the defender and interprets the tale of the tape. Since chance is a reflection of god’s will, you can tell from the random matchups which side heaven favours. In the game of knucklebones, for example, rolling the Aphrodite throw (1, 3, 4, and 6) was considered a propitious sign from the goddess. So, to make up an example, if the bad guy carries a brutal monster on his shield, and your guy happens to be carrying a shield depicting a peasant farmer, that’s heaven telling you: “Your guy’s going to die.” So, how do the matchups work out? Well, in aggregate, the matchups overwhelmingly favour Eteocles. For example, the attacker at the fourth gate sports a Typhon device and he happens to be matched up against the defender bearing the Zeus shield: in myth Zeus had tamed Typhon. Or, as it happens, the attacker at the first gate who shouts out impieties is matched up with a defender who just happens to be “a noble man who honours the throne of Reverence (503).” So, gate by gate, as Eteocles sees the matchups unfolding, he grows more confident.

 

Objectively, the worst-case case scenario is buried deep in the odds. Subjectively, everything’s going his way. He’s unified the city. The matchups look better and better. But what’s happening? The odds of the worst-case scenario go up gate by gate each time the brothers’ lots don’t come up. At the first gate, the worst-case odds are 1:49. At the second gate, they go up to 1:36. By the sixth gate, they’ve escalated to 1:4. See what’s happening? Paradoxically, as he becomes more confident, he’s actually in greater danger, till the point when he’s most confident, at that point he’s in the greatest danger. Even as the situation becomes subjectively better, objectively things are becoming much worse. At the sixth gate, with his cheeks flush with the glow of wine and his hair all but adorned in ivy, as he dispatches Lasthenes to confront Amphiaraus, he seals his own doom in a stunning twist of fate. When the scout announces Polyneices stands at the seventh gate, the low-probability, high-consequence event comes to pass. The event was objectively low-probability because the odds that it happens is 48:1 against. The event was subjectively low-probability because everything was going his way. Tragedy is an engine that makes even foredoomed outcomes exciting by discounting the odds of the inevitable taking place.

 

I think these low-probability, high-consequence events are commonplace throughout tragedy. Take Sophocles’ Oedipus rex. Like Eteocles, Oedipus has played his hand well. Everything’s going his way. “Don’t worry,” says the Corinthian messenger, “you’re really not from Corinth. You’re going to be king of two cities.” At the point of maximum confidence, the low-probability, high-consequence event happens and Oedipus loses all. Or take Shakespeare’s Macbeth. Like Eteocles, Macbeth has played his hand well. “Nothing can harm you,” say the witches. At the point of maximum confidence, the low-probability, high-consequence event unfolds: Birnam Wood. Can you see a general trend?—at the point of maximum confidence, an unexpected, low-probability event unfolds with high consequences.

 

This way of looking at tragedy I call risk theatre. To me, tragedy’s function is to warn us that at our point of maximum confidence, we are, paradoxically, in the gravest danger. In this way, tragedy speaks to our confident age, an age of both great risk and great reward. While I was writing this, an article appeared in Wired magazine on November 16 on gene editing.[6] In the US, the entomologist Akbari is working on a gene drive, a way to supercharge evolution by forcing a genetic modification to spread through an entire population. With the gene drive, he can take flight away from mosquitoes and vanquish malaria—promising, of course, minimal disruption to ecosystems. And on November 17, USA Today reported that in Italy, Doctor Canavero was getting ready to do the world’s first head transplant on a human being.[7] What could go wrong?—they had already done the procedure on a dog. Akbari and Canavero are confident, and have the best-laid plans. But so did Oedipus, Eteocles, and Macbeth. In today’s technological age of manufactured risk, tragedy ought to and should be seen as a theatre of risk, as we moderns have a moral obligation to come to terms with the low-probability, high-consequence ramifications of our actions. And what better place to explore these than through drama? We emerge from risk theatre with eyes wide open. And I think, if you look at tragedy as a theatre of risk, it will guide you well because you’ll be better apprised that the things that hurt you come where you least expect. I’ll finish by saying that I’ve written a book on risk theatre and that I’m in high-level talks with theatres to produce new tragedies based on this exciting concept. Thank you for listening, and I welcome your feedback on risk theatre, the theatre that guarantees low-probability outcomes, every time.

 

Edwin Wong

edwinclwong@gmail.com

[1] Roisman, Hanna M. “The Messenger and Eteocles in the Seven against Thebes,” in L’antiquité classique, vol. 59, 1990, 22.

[2] Zeitlin, Froma I., Under the Sign of the Shield, 45.

[3] Herrmann, Fritz-Gregor, “Eteocles’ Decision in Aeschylus’ Seven against Thebes, in Tragedy and Archaic Greek Thought, ed. Douglas Cairns, Swansea: Classical Press of Wales, 2013, 58ff.

[4] Sambursky, “On the Possible and the Probable in Ancient Greece,” Osiris 12 (1956) 35-48.

[5] Plutarch, Quaestiones convivales 733a.

[6] Molteni, Megan, “This Gene-Editing Tech Might be too Dangerous to Unleash,” Wired, November 16, 2017.

[7] Hjelmgaard, Kim, “Italian Doctor Says World’s First Human Head Transplant ‘Imminent’,” USA Today, November 17, 2017.

Low-Probability, High-Consequence Events in Greek Tragedy: A Look at Aeschylus’ Seven Against Thebes

2018 Society for Classical Studies Annual Meeting (Boston)

Session 9: Agency in Drama (Presided by Helene Foley)

 

Low-Probability, High-Consequence Events in Greek Tragedy: A Look at Aeschylus’ Seven Against Thebes

 

I present to you a question: does it seem that tragedy in general—not just Greek tragedy—goes out of its way to dramatize low-probability, high-consequence outcomes? Low-probability refers to events are that are unlikely, events that are 1000:1 against, events such as Birnam Wood coming to Dunsinane Hill. In Shakespeare’s play, the witches tell Macbeth that nothing can harm him until Birnam Wood removes to Dunsinane Hill. It’s highly unlikely that the trees will take up their roots and hike up the hill. But when the troops camouflage themselves under Birnam Wood, the high-consequence event unfolds. Macbeth is caught flat-footed. All is lost.

 

We see something similar in Sophocles’ Oedipus rex. The messenger comes out of left field to tell Oedipus that he’s inherited the Corinthian throne, and, oh, by the way, your parents aren’t who you think they are. How do I know that?—well, I saved you when you were a babe and your real parents had exposed you. Who are my real parents?—well, you have to ask the shepherd. What are the odds of a messenger, and not any messenger, but this messenger coming to Thebes at this exact moment? It’s as likely as Birnam Wood coming to Dunsinane Hill. But it happens, and the outcome has high consequences, as Oedipus goes from being a king to an outcast.

 

This presentation is on how tragedy dramatizes the risk of low-probability, high-consequence events. But there’s one problem: how do we know that an event in tragedy is unlikely? I mean, something has to happen, and anything that happens is, in a way, unique. How do we quantify the odds of what takes place against what did not take place? We need a play where we can see this.

 

In Aeschylus’ Seven Against Thebes it’s possible to quantify the odds of what didn’t happen. In Seven, seven attacking captains lay siege to seven-gated Thebes. One brother, Polyneices, marshals the attack. Inside Thebes, the other brother, Eteocles, coordinates the defence. The worst-case scenario occurs if the brothers meet at the seventh gate. They would shed kindred blood and miasma would result. If they go to different gates, the worst-case scenario is averted. Or, if they find themselves at a gate prior to the seventh gate, Eteocles could substitute another captain in his place. But the worst-case scenario occurs if they’re both at the final gate, as substitutions are no longer possible.

 

With seven gates, seven attackers, and seven defenders, what are the odds of the worst-case scenario? Let’s look at this this way. What are the odds of rolling a six on a six-sided die? There’re six equally probable outcomes, so the answer is 1:6. Now what are the odds of rolling two sixes? The outcome of two independent rolls is the product of their individual probabilities. 1:6*1:6=1:36. Now, if there are seven gates, and the assignations are random, there’s a 1:7 chance that Eteocles goes to the seventh gate. The odds of Polyneices going there are the same, 1:7. So we multiply the odds together and find that, the odds of the worst-case scenario is 1:49. Now, what are the odds of the worst-case scenario not happening? The answer is 48 out of 49 times. See how Aeschylus doesn’t dramatize the likely scenario, but rather the worst-case scenario which is 48:1 against. Thanks to Seven, we can quantify how tragedy goes out of its way to deliberately dramatize low-probability, high-consequence events.

 

But—how do we know that the process of assigning gates to the attackers is random? Easy. The scout tells us:

 

As I was leaving

they were casting lots (klhroumevnou~), each to divine by fortune

against which of our gates he would lead his battalions (77-9, trans. Hecht & Bacon)

 

Since the attackers draw lots, it stands that Polyneices’ chance of going to the seventh gate is 1:7. How do we know that the process of assigning gates to the defenders is random? That’s harder. It’s not explicit. Eteocles tells us at the conclusion of the first episode that:

 

I will go and assign six men, myself the seventh,

all fully armed oarsmen,

against the champions at the seven exit-points of the city. (357-60)

 

Now, when he says that he “will assign six men, myself the seventh” he doesn’t necessarily mean he’s stationing himself at the seventh gate. So why say this odd phrase?—“assign six men, myself the seventh.” I like Roisman’s explanation: “it is an image of bad luck, since the number 6 + 1 [in dice games] was considered an unlucky throw.”[1] I want to seize and expand this point. There’s something ludic about this play; it exudes a sort of gambling hall or lottery atmosphere. We’ve already talked about how the attackers draw lots and the unlucky 6 + 1 gambling reference. Let’s add to this. For instance, Eteocles remarks as he dispatches Melanippus to face Tydeus that: “The chances of battle are as dice (kuvboi~) in the hands of Ares (511).” What other gaming references are there? Well, when Eteocles interprets the matchup between Hippomedon and Hyperbius, he says: “Hermes, by divine reason, has matched this pair (624).” Hermes, as Hecht and Bacon note, is invoked in his capacity as the god of luck and fortunate coincidence. Finally, the scout tells us after the brothers die that “they have shared out by lot (dievlacon) their full inheritance (1039).” The lottery image, along with the ship of state image, are the two dominant metaphors of this play. Because of all these lottery images, I’m convinced that a random process must be involved in how Eteocles assigns the defenders. After all, why would he say that “Hermes, by divine reason, has matched this pair” unless they were brought together under Hermes’ tutelage as the god of lots? And why would the scout say that the brothers “have shared out by lot their full inheritance” unless a lottery process was involved in the assignations?

 

I want to share with you that Seven was the first Greek tragedy I read. When I first read it, I thought for sure that Eteocles decides the assignations on the spot, during the shield scene itself. The scout would report and he would say: “Oh, I just have the right guy to neutralize him.” In hindsight, that’s a very modern reading as that’s probably how a general would decide today. But how would this fit in with the lottery images? It doesn’t. Later I read Zeitlin’s Under the Sign of the Shield where she points out that Eteocles clearly says he’s going to decide the assignations before he meets the scout.[2] But then I thought: “Eteocles decides?—then what’s the point of all the lottery and gambling images?” Then I heard Weckler and Wilamowitz’ argument that some assignations are done before, and some during. While this solves the problem of the tenses, as during the shield scene sometimes Eteocles says “I shall station,” and at other times “He has been chosen,” it seems unnecessarily complicated. Because of the lottery references, I was ready to say that Eteocles decides by lot before he meets the scout. But when I recently read Herrmann’s conjecture, I was immediately convinced: he conjectures that Eteocles decides by lot during the shield scene itself.[3] Herrmann’s conjecture is brilliant. When Eteocles says that he’s going to assign the men before the scout comes, he’s putting their names in the helmet. As for the tenses, as he picks up the lot he can be saying “I will appoint” or “He has been already appointed.” Furthermore, Herrmann’s conjecture gives Eteocles something dramatic to do during the shield scene and, what is more, it means that, the defender assignations, like the attacker assignations, are random.

 

Could Aeschylus and his audience have worked out that the worst-case scenario is averted 48 out of 49 times? No. Sambursky, a historian of science, finds that the lack of both algebraic notation and systematic experimentation held the Greeks back from discovering the laws of probability.[4] The laws of probability would not develop until Cardano starts counting up the number of throws possible with dice two millennia later. But we know that the Greeks were able to understand the concept, if not the math of combinatorial analyses. Xenocrates, for example, mistakenly calculates that, by mixing together the letters of the alphabet, 1,002,000 unique syllables are possible.[5] Despite not being able to compute the exact odds, Aeschylus and his audience would have recognized that the odds of the brothers meeting at the highest gate was an exceedingly low-probability affair.

 

Besides the objective remoteness of the worst-case scenario, what subjective cues give Eteocles hope things will go his way? First, there’s the enemy’s disarray. Their morale is so low that they’re already dedicating memorial tokens to send back home. One of their captains says outright that he’s going to die. They also attack before their seer gives the signal. And there’s infighting between their captains. Contrast this with the improving morale of the chorus of Theban women, who function as a barometer of morale within the city: they start off in panic, but by the first stasimon, Eteocles wins them over. Many indications give Eteocles subjective hope.

 

The surest indication that things will go his way comes in the shield scene. In the shield scene, the scout describes, gate by gate, the attacking captain’s appearance, demeanor, and shield device. Eteocles, in turn, draws the lot to determine the defender and interprets the tale of the tape. Since chance is a reflection of god’s will, you can tell from the random matchups which side heaven favours. In the game of knucklebones, for example, rolling the Aphrodite throw (1, 3, 4, and 6) was considered a propitious sign from the goddess. So, to make up an example, if the bad guy carries a brutal monster on his shield, and your guy happens to be carrying a shield depicting a peasant farmer, that’s heaven telling you: “Your guy’s going to die.” So, how do the matchups work out? Well, in aggregate, the matchups overwhelmingly favour Eteocles. For example, the attacker at the fourth gate sports a Typhon device and he happens to be matched up against the defender bearing the Zeus shield: in myth Zeus had tamed Typhon. Or, as it happens, the attacker at the first gate who shouts out impieties is matched up with a defender who just happens to be “a noble man who honours the throne of Reverence (503).” So, gate by gate, as Eteocles sees the matchups unfolding, he grows more confident.

 

Objectively, the worst-case case scenario is buried deep in the odds. Subjectively, everything’s going his way. He’s unified the city. The matchups look better and better. But what’s happening? The odds of the worst-case scenario go up gate by gate each time the brothers’ lots don’t come up. At the first gate, the worst-case odds are 1:49. At the second gate, they go up to 1:36. By the sixth gate, they’ve escalated to 1:4. See what’s happening? Paradoxically, as he becomes more confident, he’s actually in greater danger, till the point when he’s most confident, at that point he’s in the greatest danger. That’s the genius of Seven: even as the situation becomes subjectively better, objectively things are becoming much worse. At the sixth gate, with his cheeks flush with the glow of wine and his hair all but adorned in ivy, as he dispatches Lasthenes to confront Amphiaraus, he seals his own doom in a stunning twist of fate. When the scout announces Polyneices stands at the seventh gate, the low-probability, high-consequence event comes to pass. The event was objectively low-probability because the odds that it happens is 48:1 against. The event was subjectively low-probability because everything was going his way. By combining subjective and objective probabilities, Aeschylus spring loads the low-probability event so that when it takes place, we feel its impact.

 

I think these low-probability, high-consequence events are commonplace all over tragedy. Take Sophocles’ Oedipus rex. Like Eteocles, Oedipus has played his hand well. Everything’s going his way. “Don’t worry,” says the Corinthian messenger, “you’re really not from Corinth. You’re going to be king of two cities.” At the point of maximum confidence, the low-probability, high-consequence event happens and Oedipus loses all. Or take Shakespeare’s Macbeth. Like Eteocles, Macbeth has played his hand well. “Nothing can harm you,” say the witches. At the point of maximum confidence, the low-probability, high-consequence event unfolds: Birnam Wood. Can you see a general trend?—at the point of maximum confidence, an unexpected, low-probability event unfolds with high consequences.

 

This way of looking at tragedy I call risk theatre. Tragedy warns us, that at our point of maximum confidence, we are, paradoxically, in the gravest danger. I think that tragedy speaks to our confident age, an age of both great risk and great reward. While I was writing this, an article appeared in Wired magazine on November 16 on gene editing.[6] Here in the US the entomologist Akbari is working on a gene drive, a way to supercharge evolution by forcing a genetic modification to spread through an entire population. With the gene drive, he can take flight away from mosquitoes and vanquish malaria—promising, of course, minimal disruption to ecosystems. And on November 17, USA Today reported that in Italy, Doctor Canavero was getting ready to do the world’s first head transplant on a human being.[7] What could go wrong?—they had already done one on a dog. Akbari and Canavero are confident, and have the best-laid plans. But so did Oedipus, Eteocles, and Macbeth. I look at tragedy as a theatre of risk because such an interpretation speaks to our technological age of manufactured risk. In such an age, I believe that we have a moral obligation to come to terms with low-probability, high-consequence events. And what better place to explore these than through drama? We emerge from risk theatre with eyes wide open. And I think, if you look at tragedy as a theatre of risk, it will guide you well because you’ll be better apprised that the things that hurt you come where you least expect. I’ll finish by saying that I’ve written a book on risk theatre and that I’m in high-level talks with theatres in Victoria, Canada to produce new tragedies based on this exciting concept. The goal to start a new art movement in tragedy. Thank you for listening, and I welcome your feedback on risk theatre, the theatre that guarantees low-probability outcomes, every time.

 

Edwin Wong

2018-01-05

[1] Roisman, Hanna M. “The Messenger and Eteocles in the Seven against Thebes,” in L’antiquité classique, vol. 59, 1990, 22.

[2] Zeitlin, Froma I., Under the Sign of the Shield, 45.

[3] Herrmann, Fritz-Gregor, “Eteocles’ Decision in Aeschylus’ Seven against Thebes, in Tragedy and Archaic Greek Thought, ed. Douglas Cairns, Swansea: Classical Press of Wales, 2013, 58ff.

[4] Sambursky, “On the Possible and the Probable in Ancient Greece,” Osiris 12 (1956) 35-48.

[5] Plutarch, Quaestiones convivales 733a.

[6] Molteni, Megan, “This Gene-Editing Tech Might be too Dangerous to Unleash,” Wired, November 16, 2017.

[7] Hjelmgaard, Kim, “Italian Doctor Says World’s First Human Head Transplant ‘Imminent’,” USA Today, November 17, 2017.

Society for Classical Studies 2018 Presentation

Passive Income Part Three – Risk

Passive Income Part Two – Costs ended on a cliffhanger: it addressed why costs are important, but did not get to how costs can be controlled. It.s actually easy: find low cost investment vehicles. To find the right low cost investment vehicles and put them together in a portfolio, an understanding of risk is useful.

What is Risk?

Some say risk is a four letter word. Others say it is the danger of loss. To some risk is that more things can happen than will happen. An economist will say the technical definition which is that risk is the portfolio’s standard deviation. Standard deviation quantifies the variance in annual profits and losses. Economists like it because it can be expressed as a number and being a number, can fit into their equations. It.s hard to quantify ‘shit happens’! The economists’ definition, however, is at odds with how the word is commonly used to express ‘danger of loss’. A portfolio whose returns varies from -1% to -2% each year by their reckoning is less risky than a portfolio whose returns varies between +5 to + 15% each year because the variance in the returns of the first portfolio is smaller. According to the common usage, the first portfolio is clearly ‘riskier’ because it is losing money each year!

For today, however, risk is your tolerance to loss and gain. The more risk tolerant you are, the greater chance you are willing to stomach big losses so that in other years you will have big gains. The less risk tolerant you are, the more you prefer small gains in good years so that losses in bad years are also smaller. This principle works because risk is related to return: the more risk you are willing to take on, the greater your return should be because you are exposed to greater danger. Think of different occupations. A linesman (those guys who connect power lines carrying tens of thousands of volts) makes more money than, say, a deli attendant at a supermarket. That.s because the most dangerous thing in the supermarket is the meat cutter or an irate customer. The linesman takes on more risk and should be compensated for taking risk. It.s the same in the stock market.

So decide whether you.re low risk, medium risk, or high risk investor. There.s actually no way to really figure out until you.re invested (and feel the thrill of making money and the dejection of losing money) so just go ahead and decide. Remember what you decide as we.ll come back to it in a second. Here.s some images to help assiduous readers make their selection.

If you require helmet, reflective gear, and lights to feel safe riding a bike, consider yourself low risk:

Bike Safety Nerd - Low Risk

Bike Safety Nerd – Low Risk

If you will go for the piece of cheese provided you have safety apparatus, consider yourself medium risk:

Safety Mouse - Medium Risk

Safety Mouse – Medium Risk

If you do vehicle repairs A-Team style, consider yourself high risk:

Road Repair - High Risk

Road Repair – High Risk

Classes of Investments

There.s two major classes of investments: stocks and bonds. With stocks, you are a shareholder in the company. You are a part owner, in other words. With bonds, you lend your money to a company. They will pay you back what you lent them plus a little something extra for your trouble. The nice thing with stocks and bonds is that they.re uncorrelated. That is to say, they do not move in tandem. If one.s going up, the other.s going down. Or if one.s going up, the other.s treading water or not going up quite as much.

Now guess which is riskier? If you guessed stocks, then you.d be right. They also return more than bonds (most of the time). But they are also more volatile. That.s why you also need bonds in your portfolio. Think of them as a ballast. When the storm.s brewing and you.re battening down the hatches, bonds are your best friend, not that diamond mine in Botswana.

Now, since there are two classes of investments and when one zigs the other zags, it seems a good idea to have bits of both in the investment portfolio. Stocks are the engines that drive the portfolio.s growth during good years and bonds are the ballast that help you through the storm. How do we figure out how much of each?

Do you remember what type of investor you are from the previous section? If you.re the safety cyclist, a good starting point is a portfolio of 60% stocks and 40% bonds. If you.re the hungry mouse who will go for the cheese after putting on the necessary safety gear, a good starting point is 70% stocks and 30% bonds. If you.ll trust a 2×4 to hold up your truck while doing repairs underneath it, then a good starting point is 80% stocks and 20% bonds.

Wasn.t that easy?

Investment Vehicles

Which bonds and which stocks to I buy? That.s easy: buy them all! There are these investment products out there called exchange-traded funds or ETFs. They.re exchange-traded because they trade on the TSX (the stock market). They.re funds because they.re baskets of many individual holdings which together represent the total market. For bonds, I.d recommend Vanguard Canadian Aggregate Bond Index ETF. It has a MER (management expense ratio) of 0.19%. For something that holds around 600 different issues of bonds, it.s dirt cheap. Of it.s 600 or so issues, about three-quarters of its holdings are backed by the Canadian government (federal, provincial, and municipal) or government related entities. The remaining one-quarter are issued by companies, mainly investment grade banks and insurance companies.

For stocks, I.d recommend BMO Capped Composite Index ETF. It has a MER (management expense ratio) of roughly 0.1%. I say roughly because they just lowered it and their site frustratingly publishes the ‘Maximum Annual Management Fee’ (which is slightly less than the MER which includes trading costs and other things). I wish everyone would just publish the MER to make comparisons easier. This ETF holds around 230 of the largest companies in Canada: Royal Bank, Manulife, CNR, Valeant Pharmaceuticals, Blackberry, you name it, it.s in there.

In the following blogs I.ll discuss how to buy the bond ETF and the stock ETF. Once you.re set up, it.s a few keystrokes and clicks of the mouse. It.s that easy.

In today.s segment, I discussed risk and how knowing your risk tolerance helps you to put together a portfolio. I also recommended two investment vehicles: one for bonds and one for stocks. Notice how low their costs are: fractions of a percent. In Passive Income Part Two, the average cost of a mutual fund was flagged at 2.42%. The cost of a DIY portfolio with my two recommendation is in the neighbourhood of 0.15%. That is to say, by reading this blog, you save 94% off the posted retail price!

Stay tuned for Part Four of the Passive Income saga! Next time, the discussion will be on the burning question I.m sure all of you are asking: how do I open up an investing account? Well, that.s easy too!

Until next time, I.m Edwin Wong and investing has been how I was able to get out of the rat race to be Doing Melpomene’s Work. I hope others will be able to as well.

Tales of the Unexpected (the Happy Side of Risk)

Do you find most often people—or yourself—try to avoid the unexpected? People say: ‘become better educated’, ‘contain the risk’, ‘watch out for the downside’, ‘better to go with the devil you know’, and so on. There is in the unknown something of a bogeyman. Well that.s true. Especially from my perspective, since I write on tragedy and, well, in that art form, whenever the hero runs across the unknown or the unexpected, the distribution of outcomes is asymmetrically skewed to the downside: i.e. death and destruction! Well, sometimes the unexpected can be very good as well!

Assiduous readers will be sitting on the edge of their seats wondering how the Call for Art is progressing. Today I biked out to Sidney to distribute the flyers at the Island Blue Print and the galleries out there. By the say, Sidney is the best place in the world. People in Sidney just love to be in Sidney. They love to chat with other relaxed and smiley folks. So dropped off the flyer at the two galleries along the main strip. Got an art lesson on some of the new watercolours and oils that they were coming in. Some of these watercolour artists work on their pieces for months! They do three or four pieces a year that they.re absolutely happy with. Interesting work being a gallery buyer as well. Lots of artists coming in: so many works, so little room! Also found an art school by the water. The instructor had a lesson going on but had a prize pupil who she thought would be a perfect fit. There were samples on display and lots of these students are very talented! The only dangerous place in Sidney is the Safeway or I guess Save-on-Foods parking lot. That place has its own laws of driving which I haven.t figured out yet. I don.t think the drivers there have figured out either. But I was wondering if I.d bump into my old colleague Erik at the Starbucks there. He gets his afternoon coffee fix there and it was just about the right time. Lo and behold, he is there! We chat and I stop by the old office to see the boys. One thing I notice: nothing ever changes. The office is exactly the same. Collected 20 bucks on a bet I won from my old boss (we had placed a bet on what the stock price of Lucara diamonds would be New Years Day; he said above $3 and I said under). Also placed a new bet: New Years Day 2016 price of a barrel of oil, which is sitting at $58 today. I say $50 and he says $70. We.ll see! I guess as a patriotic Canadian hopefully he wins! Canada.s frighteningly resource dependent. But hey, maybe it will take a prolonged slump in oil prices to kickstart nascent industries.

But that was a big digression. Are you still with me? I was telling the story of how sometimes the unexpected is skewed towards the positive side. So, biking home (Sidney to downtown Victoria), I take the Galloping Goose. Wonderful. Avoid the highway with all the noise and hubcaps and body parts from all the cyclists who have been struck down on the highway.s shoulder (well, okay, that last part was an exaggeration. But this is what my imagination tells me if i take the highway route). The Galloping Goose takes me by Matticks Farm. Usually I proceed straight through. Actually, every other time I.ve done the ride I.ve gone straight through. But today I was thirsty. And feeling not in a rush. So I stop by and pick up a chocolate milk. Mmmmmm. Finding a place to sit down, I notice there.s a gallery right there! Well, looking at their display, it.s mostly abstract works and landscapes. But i thought, ‘Why not?’. Going in, i.m greeted by Sharon. I tell her about the project and she looks at the flyer. She thinks for a moment…the artists she knows don.t usually do this type of work. But she has a great suggestion: try Moss Street market on the weekend. It.s a little society of artists that would do this sort of thing. And then another great idea. This one I was hitting myself for not having thought of it myself. On the causeway by the Inner Harbour in downtown Victoria, there.s all sorts of activity once tourist season starts going (which is right around now). The patios fill up. There.s clowns, magic shows, musicians, and food stands. And also artists. They do quick portrait sketches. So they.re skilled at meeting someone and capturing the person.s psychology with a few quick strokes. And they work fast. So it wouldn.t cost a fortune. While she was saying this, I was thinking, ‘Good point!’. Okay, so I don.t have a budget (art.s one of those things it.s hard to set a price to and I.d prefer the artist to set a price for the commission they.re happy with), but at one of the galleries I was at, the artist they were suggesting is accustomed to charging in the vicinity of 10k for commissions! I like quality and this project means a lot to me, but 10k can buy a lot of things! So let.s see what happens! I know where to go this weekend on the trail of the Call for Art!–Moss street and the causeway. It.ll be fun to be part of the hubbub too. Writers tend to be in their own company for long periods. Good to go out.

So how does this tie into the unexpected and the upside? Well, i wasn.t planning on stopping at Matticks Farm. It just so happened that I was thirsty while riding by. You know, on the bell curve, they call the left and right ends the ‘tails’ of the curve. Those are the places where very unlikely things happen. And when people talk about them, they usually talk about catastrophes: the hundred year storm, the ‘big one’ (earthquake), and so on. Well, the tail on the right end gets less attention. That.s like the day you meet your future wife or the day the lottery goes with your numbers. These things happen too. To me, what happened today was a bit of good fortune. Not on the extreme right of the bell curve, but good enough to make me happy. Her recommendation was very good. So to me, it.s a reminder to expose yourself to all the things out there. Live life to the fullest or some other wooly expression like that. Deal with the bad when it happens. Because only by exposing yourself to risk can you get the ‘good’ side of risk.

Have a few leads now on the Call for Art. Meeting some more artists, hopefully soon someone can start working on ‘The Dead Man.s Hand’!