The Black Swan: Nassim Nicholas Taleb

Professor Nassim Nicholas Taleb summarizes his book early on in the prologue thus.

… in this (personal) essay, I stick my neck out and make a claim, against many of our habits of thought, that our world is dominated by the extreme, the unknown, and the very improbable (improbable according to our current knowledge—and all the while we spend our time engaged in small talk, focusing on the known, and the repeated. This implies the need to use the extreme event as a starting point and not treat it as an exception to be pushed under the rug.

If the world is dominated by the extreme, what is it an extreme of? We need the boundaries defined in the first place, don’t we?

If the world is dominated by the unknown, don’t we need to first articulate the known so we can then hope to progress towards the unknown?

If the world is dominated by the improbable, then, as a certain Sherlock Holmes would have said, “Once you eliminate the impossible, whatever remains, no matter how improbable, must be the truth.” So how do you eliminate the impossible?

While the author does not truly consider these, the book is not totally disappointing either. The idea of the black swan is intuitive, though not particularly original. It is not dissimilar to the management principle that exhorts organizations to define processes to identify their blind spots. Theodore Levitt’s concept of marketing myopia is perhaps on the same lines. Carl Jung, in The Undiscovered Self, suggests that the real picture consists of nothing but exceptions to the rule, and that, in consequence, absolute reality has predominantly the character of irregularity. Of course, Karl Popper introduced the original black swan to define the idea of falsifiability. Yes, we’ve known for some time now: Life happens in the fringes.

Standing as he does on the shoulders of such giants, you wonder why Nassim Taleb seems so defensive about his idea. Why denounce the entire worlds of statistics (except Benoît Mandelbrot’s work), economics (Friedrich Hayek’s thoughts and ideas seem to meet with Nassim Taleb’s approval though), and any other discipline that is involved in forecasting? If the idea of the black swan is so self-explanatory (and it certainly does seem to be), then surely it does not need to establish itself by rubbishing everything else? To quote the bard, Nassim Taleb doth protest too much, methinks.

The Nobel Prize for Economics! Yes, it is something that draws more flak than the Prize in any other discipline, and there does seem to be some basis for that. But surely Nassim Taleb is a bit too vitriolic? So much so that at one stage, he blames the Nobel Committee for not checking with people like him before awarding the Prize in a certain year! Why does the term “sour grapes” suggest itself?

Authorial presence is something you particularly don’t expect to see in non-fiction of the non-memoir variety. But NNT (as the author refers to himself whenever he tires of using the perpendicular pronoun) is present in almost every page, in almost every paragraph. While one does not dispute the approach of using personal examples, experiences, and beliefs when someone is presenting a new idea, it’s rather unfortunate that the book has more of the author than of the idea.

Then there are the tiresome neologisms, probably created with the hope that they would become buzzwords. Like platonicity, in a pejorative usage referring to our tendency to mistake the map for the territory, to focus on pure and well defined “forms.” Or the two worlds of Mediocristan (which all of us inhabit) and Extremistan (where Nassim Taleb lives, presumably with some company).

While some of the examples in the book are good, quite a few are glib. The competitive advantage of one company cannot be a black swan for another, can it? And the turkey-before-thanksgiving example is, even allowing for the fact that it was just an exaggeration to illustrate a point, quite glib and shallow. Some of the other examples are good and relevant though.

At the end of it, I wonder: Is the concept of a black swan really a black swan?