The Black Swan

Market crashes! Fads! 9/11! Fashion changes!
The quick demise of the Soviet Empire!
Epidemics! Viagra, a Success! Harry Potter, a Phenomenon!

Why are things so surprising?

Every so often, a book comes along that:

1. Forces you to question your basic assumptions about how human knowledge is created;
2. Reaffirms your skepticism about experts and their opinions and prognostications; and/or,
3. Is highly entertaining in its varied use of stories, examples, and anecdotes.

Nassim Taleb's new book, The Black Swan: The Impact of the Highly Improbable, happily and systematically delivers on all three counts.

I had read Taleb's Fooled By Randomness, and enjoyed it. But "The Black Swan" is a much deeper and well thought-out exploration of the "unexpected" in our lives.

While Taleb's style is fun (and sometimes rude), personal, and engaging, the book itself (because of its subject matter) is not easy to plow through. My strategy was to read 10-15 pages a night for three weeks. My reward: a fresh perspective of some basic epistemological concepts.

The two main points are the book are: 1) the future is unpredictable; and, 2) we humans try to concoct stories to convince ourselves that the world is more predictable than it actually is.

Taleb defines a "black swan" as having these three characteristics: 1) it's an outlier: something outside the realm of regular expectations; 2) it carries an extreme impact; and, 3) it can be explained after its occurrence but can't be predicted beforehand. There you have it: rarity, extreme impact, and retrospective (though not prospective) predictability.

Much of the book consists of an exploration of 1) our blindness to randomness — particularly the big deviations— and 2) what Taleb calls "Black Swan Logic." Taleb is especially hard on Plato (and his intellectual descendants), categorical thinking, and the "Bell Curve" of expectations.

The more you summarize, the more order you put in, the less randomness. Hence the same condition that makes us simplify pushes us to think that the world is less random than it actually is . . . .

. . . Black Swan Logic makes what you don't know far more relevant than what you do know. Consider that many Black Swans can be caused and exacerbated by their being unexpected.

Taleb has a different background from most philosophers: he grew up in Lebanon and came of age during their civil war; he studied at Wharton and was a successful Wall Street trader who made a killing during the market crash of 1987; and he seems at home throughout the world with friends and business associates from many different industries. All of this feeds the many diverse examples he shares throughout the book.

There area lot of juicy morsels in this book. After discussing several civil wars and the fall of the Soviet Empire, he muses:

The studious examination of the past in the greatest of detail does not teach you much about the mind of History; it only gives you the illusion of understanding it. History and societies do not crawl. They make jumps. They go from fracture to fracture.

Here's his take on elite thinkers vs. cabdrivers (in their ability to predict events):

I noticed that very intelligent and informed people were at no advantage over cabdrivers in their predictions, but there was a crucial difference. Cabdrivers did not believe that they understood as much as learned people — really, they were not the experts and they knew it. Nobody knew anything, but elite thinkers thought they knew more than the rest because they were elite thinkers, and if you're a member of the elite, you automatically know more than the non-elite.

Another gem (based on his observations about Aristotle Onasis, and a psychology study investigating  information and problem-solving):

The more information you give someone, the more hypotheses they will formulate along the way, and the worse they will be [in their ability to solve the problem]. They see more random noise and mistake it for information.

Taleb believes that as the world becomes increasingly more complex, the sources of Black Swans have multiplied beyond measure. Thus, we need to clean up our thinking about just what is possible in the real world. Taleb's book, The Black Swan, is an excellent first step. I recommend it.

Here is a video of Taleb on the Colbert Report.

Comments

[Stephen Denny]

Roger: I think you and the Black Swan just debunked global warming.

[Roger von Oech]

Stephen: That is a subject on which I'm a professed agnostic. But I will say this: while I was reading "The Black Swan," the Global Warming Cassandras were among the first people I thought of whose ideas and predictions about the future were no more valuable than cabdrivers' predictions. As Taleb puts it: "The future is unpredictable, but we humans try to concoct stories to convince ourselves that the world is more predictable than it actually is."

[Joel]

Brilliant! I can't wait to pick up a copy. The idea of history and societies moving from fracture to fracture is the same as the punctuated equilibrium theory of evolution. Kurt Vonnegut once quoted a former teacher of his, who pointed out that during the Decline and Fall of the Roman empire, the Romans were not running around saying, "We're delining! We're falling!"

[Tom Haskins]

Thanks for this tantalizing synopsis, Roger. Before I get started reading "The Black Swan", I've been finishing some books in applied neuroscience. They suggest that our propensity for categorical reasoning and imaginary control of the unpredictable comprise a viable cognitive strategy. We experience our unconscious mind as wildly untamed with unpredictable mood changes, urges, fantasies and re-enactments of trauma. We develop our denial of "the inner black swan" to control our own outbursts and disappearances.

The change Taleb is proposing seems very similar to the change in cognitive strategies when we begin to work with our unconscious mind: finding talents within or getting creative with unforeseen inspirations, intuitions and insights that "came out of the blue". We learn from experience to stop predicting which design scheme will be the one used, which small change will play out as a major turning point in the design process, and which big problem will turn out to be no problem at all.

[Valeria Maltoni]

Roger,

A very enjoyable review. I agree with your statement that the book needs to be taken in small doses. That's why I made my post about one chapter only vs. trying to get to everything. You have done well doing that, though. Complimenti! And one bit of trivia on Taleb, he speaks some Italian.

[Roger von Oech]

Joel: If like studying history, you'll enjoy Taleb's take on history and what we can learn and not learn from it.

Tom: Always a treat when you stop by! What neuroscience and cognitive studies books and/or links can you recommend?

Valeria: Your review several months ago was one of several to persuade me to pick up the Black Swan. As I said on your site, I had enjoyed Taleb's previous book, "Fooled By Randomness." I liked the current work more.

[Tom Haskins]

"Hare Brain Tortoise Mind" by Guy Claxton relates the most to creativity (Twyla Tharpe recommends it in her "The Creative Habit")

"Strangers to Ourselves" By Timothy D. Wilson is the best one so far about how well we function unconsciously and ought to work with this unknowable dimension to our minds.

[David]

Roger - thanks for announcing this book to me... it is highly synchronistic with what I've been thinking in the last few days. Namely: that models (such as last year's and probably this year's hurricane forecasts) won't work predictively IF one or more main formative ingredients has changed. Humanly constructed models are always based on the historical record. Thus if something quite different enters the equation, then the model will be inaccurate.

However, the author of Black Swan is incorrect, it seems to me, in a couple regards:

1) The future CAN be predicted fairly well, if the nature of elements interacting is as before. Only when a major shift of input elements occurs (a quantum leap or whatever) does the future appear as unpredictable.

2) The author apparently speaks of this as randomness... but that would not necessarily be so. The new input MIGHT not be random... it could be intentional. Depending upon one's world view, one may say that "God's hand reached in" or "enough humans believed differently" or...?

3)Relevant to 2) above, is an insight I had just a couple days ago:
from the viewpoint of a particular human state of understanding, something of "a higher order" might not appear as an order, but rather as a chaos. In other words, from the lower ordered state, the higher order might not appear meaningful or ordered at all... in fact, this higher order might be entirely imperceptible from the lower order.

The dangling question: "If personal, or world history, were to actually come to an end... that is: the historical record was no longer a driving force, what would be there, what would happen?"