The Black Swan by Nassim Nicholas Taleb



The Black Swan is an Iconoclastic masterpiece. I can honestly say I’ve never encountered a book like it. I found myself reading, rereading, reflecting, and re-reflecting. I’m still digging back into sections for insight and illumination. For someone who thrives on Inquiry this book is a sumptuous feast. In fact, once I finished reading it, I resolutely decided that I should: No must, go and buy copies for all the intellectuals I know and respect. If you’re an intellectual whom I know, and are wondering why you haven’t received a copy, don’t worry it’s on it’s way!


To summarize, the book examines with all the precision of an electron microscope, “our blindness with respect to randomness, particularly large deviations”. That’s quite a mouthful. But I realize, I’ve rambled on about how great this book is without describing one, small detail… What does Taleb mean by Black Swan? Taleb describes a black swan as a positive or negative event that’s improbable but has a massive impact. So, little things like the rise of the Internet or on the other side of the spectrum, “911”.


The black swan covers a few large arguments and within each argument Taleb elaborates with numerous inquiries and suggestions to contemplate. For example, “how do we predict something?” Well, we generally look back to what we’ve experienced and then make assumptions based on the past. Taleb relates this to a turkey problem: “Consider that the turkey’s experience may have, rather than no value, a negative value. It learned from observation, as we are all advised to do (hey, after all, this is what is believed to be the scientific method). Its confidence increased as the number of friendly feedings grew, and it felt increasingly safe even though the slaughter was more and more imminent. Consider that the feeling of safety reached its maximum when the risk was at the highest!” Taleb also uses this point to prove that black swans are subjective: What’s a surprise to the turkey isn’t a surprise to the butcher. He emphasizes that you should avoid being the turkey!


Taleb makes a fascinating case for our inability to predict. Our knowledge and thinking process is based on a very finite scope of the world. Think about when you have to make a decision, say, whether or not to touch an electric fence a 3rd time? You’ll probably draw back and consider… I’ve been shocked twice already. Do I really want to get shocked again? We can surmise then, that we draw conclusions and hypothesis from past experiences. The real world is far too complex for us to truly understand though. Taleb points out that “a single butterfly flapping its wings in New Delhi may be the certain cause of a hurricane in North Carolina.” Now factor in the millions of trillions of trillions of little factors that work into these complex systems. It makes it virtually impossible to predict anything moving forward. Assumptions from the past don’t apply to irregular situations.


I can’t help but find myself agreeing with Taleb on his argument about experts and empty suits. As I read the section, I couldn’t help grinning and nodding my head as Taleb asserts that the truth behind science is limited to certain areas and methods, even despite those presenting academic degrees or claiming to be scientists. Taleb even attacks nobel laureates and the whole institution of the Nobel prizes. Over and over again, this has made me rethink many of the scientific claims I’ve heard and many of the claims made by so called experts in general.


On the topic of experts, we seem to have quite a few of them in our society. Actually this book got me thinking, we have experts in pretty much every field. But do all of them deserve the title? Well… Taleb probes this fascinating conundrum. The problem with experts is that they have a sense (quite a large sense) of epistemic arrogance in that, well, they think that they know everything. This can be damaging to society… Especially when the people who we are relying on in society are not valid. Like relying upon an Italian Lancia, we flock towards these “so called experts”, who wear titles like ‘financial forecaster’. The results of trusting these “experts” can be cataclysmic. You see, however, Taleb does not mean to say that all experts are not valid. I mean, “a plumber will almost always know more about plumbing then a stubborn essayist and mathematical trader.” Taleb urges us to question the error rate of experts and question the confidence of the expert. Taleb states that, “simply things that move and therefore require knowledge do not usually have experts, while things that don’t move seem to have some experts.” He elaborates with “Experts are narrowly focused persons who need to tunnel”.


Taleb’s largest and most complex point relates to the limits of human knowledge. As, I consider Taleb’s assessment, I find myself reluctantly but inevitably agreeing. The epistemic limitations of humans in areas of decision-making is a two headed beast: One head is philosophical, the other empirical. Philosophically, Taleb is spot on when he states that there’s a decrease in knowledge when rare events or “outliers” are thrown into the party, since they’re not visible in the past and would require a strong priori, or maybe an extrapolating theory. Now accordingly, you can imagine that predictions of events depend more on theories when their probability is small. In the forth quadrant, Taleb describes knowledge as both uncertain and having large consequences, so they need a wee bit more robustness. I could go on all day about this, but for the assumption that you have a life (or don’t want me to spoil the entire book.)


I do believe this is one of those rare texts that one can go back to over and over. I would recommend it highly to anyone who is curious about statistical anomalies and the meaning of life. And I would love to have a discussion about the content with a group who have finished reading it and have thoughts or questions.


If you’re on my list, please enjoy!

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