I heard about ‘Black Swan’ from someone who read the book, but couldn’t remember its full name, or that of the author. I smart-Googled the term there and then, and found a book named “The Black Swan: The Impact of the Highly Improbable“. It turned out to be a brilliant read.
The author, Nassim Nicholas Taleb (aka NNT), describes himself as “an essayist, belletrist, & researcher only interested in one single topic, chance (particularly extreme & rare events…a post trader, he mainly derives his intuitions from a 2-decade long and intense practice of derivatives trading (“nondull” activities with plenty of randomness).”
Taleb’s website tells the rest of the story — which is in itself as fascinating as his book.
The person who introduced ‘Black Swan’ to me was not exaggerating, the concept has a massive pedigree. John Stuart Mill the classical economist, said: “No amount of observations of white swans can allow the inference that all swans are white, but the observation of a single black swan is sufficient to refute that conclusion.” Got it? We may watch millions of white swans, yet, we be sure that all swans are white. But observing a single black swan will be enough for us to know for certain that not all swans are white. This statement has a historical connotation: for years, the term ‘white swan’ defined things people knew to be certain, because all swans ever observed were white.
In 1696 Willem de Vlamingh sailed to Australia on an epic mission to find survivors of a Dutch East India Company ship that disappeared there a few years back. He didn’t find the sailors, the ship or its cargo, but he did find a large number of Black Swans . He was so impressed by the gorgeous birds, that he renamed the place Swan River (Zwaanenrivier).
An idiom (‘certain as a white swan’ maybe?) was lost and, years later, a powerful concept was born instead: Taleb offers an argument against the tendency to assign meaning to events after the fact (‘post-hoc’.) Some events, according to Taleb, are rare, earth shatteringly significant and predictable only in retrospect. These events, which he calls “black swans” caught us unaware, yet, we have no problem coming up with ‘post-hoc’ explanations showing how inevitable they really were. Disasters like 9/11 prove that we live in a world that is “dominated by the extreme, the unknown and the very improbable.”
Taleb’s strongest argument is against our tendency to use historical data in order to try to predict the future. Historians, he says, have failed time after time to predict major events, such as World War I, for example, before they happened. All they have is an ability to concoct a story (‘narrative’) aimed to explain an event after it happened in order to ‘prove’ its
Black Swans are not the domain of historians only, there’s also art. Think about Harry’s author: the story about JK Rowling’stransition from an unemployed single mother who writes her anonymous book in small coffee shops because she can’t pay for food or heating, the manuscript being rejected again and again, and then, the sudden success, the story is in itself potential fodder for one or more movies in the future.
But the question remains – how could anyone foresee the phenomenal success of the series? Harry Potter is a Black Swan, as are Vincent Van Gogh’s paintings. How could someone looking at one of his paintingsin 1886, guess that it will sell for 82 million Dollars, 100-odd years later? There’s also technology: the Internet, the Web, Google and Microsoft – are all black swans. The iPod is a black swan, as was the Apple Mac. Sport Black Swans are found daily. We have personal black swans, too — do you remember your classmate Rodendah Pffischer? She used to be as plain as a pencil and is now a world class model. If only you’d invited her to your 14th birthday!
Black swans have an accidental streak in them, they can therefore not be predicted, only explained post-hoc. Forbes has an interesting take on the issue, in defence of American intellectual capabilities, the piece is worth quoting: occasionally, Americans “hear a snotty European presenting his stereotypes about Americans, he will often describe them as “unintellectual,” “uneducated,” and “poor in math,” because, unlike European schooling, American education is not based on equation drills and memorization. Yet the person making these statements will likely be addicted to his iPod, wearing a T-shirt and blue jeans, and using Microsoft Word to jot down his “cultural” statements on his Intel-based PC, with some Google searches on the Internet here and there interrupting his composition. If old enough, he might also be using Viagra. America’s primary export, it appears, is trial-and-error, and the innovative knowledge attained in such a way.”
So are we forever barred from trying to understand the future? Not at all. On his brilliant blog, John Sener offers interesting applications to Taleb’s views. For example – we can imagine what the future would look like, we can remember that “random tinkering is the path to success,” we can also try to identify “positive black swans” from the past and – crucially, we can explore ideas as to what is ‘possible’ and what is worth exploring.
The future, as they say, is not what is used to be.