I have the opposite impressions. Science should embrace causality more and do it better. And as a layman term it should be refined so that we stop talking about the causes of any event as a cake where each slice has a name and only one name.
I find it hard to summarize why, at least right now, but my view is sorta similar to Pearl’s (though I don’t totally like how he puts it). Hopefully later I’ll re-read this more attentively and comment something more productive (if no one has done a strictly better job already).
Why is it that riskier investments should give higher expected returns?
I ask not because I don’t get that the avg person would rather invest on something safe than something unsafe, all else being equal. I get that. I ask because I imagine that investors could bring their total risk down through diversification without harming the expected returns, so big money would prefer the higher expected returns even if they are risky, and in doing that, they’d bring down the extra returns from the riskier investments.
Is it because investments options are so correlated that diversification isn’t enough to bring the risk of a portfolio down to acceptable levels? Or some other reason?