The Black Swan: A Book Review

June 1, 2009

I recently finished The Black Swan – The Impact of the Highly Improbable by Nassim Nicholas Taleb. Over all, an excellent book. (I introduced it with a question here)

Dr. Taleb argues that  Black Swans are events that are unpredictable, or unknown and unknowable and cannot be planned for in concrete, measured terms. and he argues that the most we hope for is to plan our reactions to these events.

One Quibble Off The Top!

One issue that I have is Dr. Taleb’s emphatic proclamations of his Levantine background – being a subset of our (rather arbitrary) geo-political boundaries. With that being said, Dr. Taleb’s liberal use of the term America – well; last time I checked, of the dozen plus countries in the geo-political boundaries of the Americas, only one chose to use it in their name.

Back theTopic

Anyway back the topic, the text introduces, Dr. Taleb’s concept of the Black Swan, then takes some strolls down the sidelines of philosophy, economics (he takes a good swipe at the insularity of economic thinking – most other disciplines are open, and derive theories from other fields of research)and mathematics.

I don’t completely share Dr. Talebs purely empiricist (skeptical empiricism) background, so there are points that I agree with completely, but others that I don’t think pure empiricism evaluates properly.

In the first instance, the randomness, and plain luck that brings each and every one of us to the here and now to me is without question. My Anglo-Saxon family tree includes Scots, Irish, English and Welsh. It was not too long ago that if they were not trying to kill each other – they sure weren’t talking to each other.

For the second, Dr. Taleb refutes the old tenet of  that which doesn’t kill you makes you stronger, empirically – experimentation in deprivation shows general and consistent weakening of the subject – not strengthening. In Corpora, this may be true, but Anima? My argument would be to point to the noted Admiral Stockdale or Alexander Solzhenitsyn.

Dr. Taleb also points out our fallacy on attempting to predict the future based on the past. Now this I could not agree with more. Every day media and texts use the terms; “‘Based on past business cycles…” “Based on past conflicts…” Or in your business; “Based on last years numbers…” What that does not take into effect is either a tipping point or an innovation. A decade ago, the Alta Vista or Webcrawler search engines could assume that “Based on last years numbers our market share will be……” When in fact a tipping point that is unknown and unknowable is just beginning to fire up Google. Before you argue that maybe you should have seen it coming, one of Dr. Talebs key attributes of Black Swans is that they are retroactively explainable (hindsight is always 20-20 !)

Although I think that one genuine argument of this 20-20 hindsight idea is outside of empiricism, that is the less measured skill and strategy of the human mind. The text uses the Apple Macintosh vs. Wintel PC (think the I’m a PC, I’m a Mac advertisements) – having been in the tech business for decades, I know that luck was not Bill Gates’ only asset.

We are then introduced to the concept of unknowledge and G.L.S. Shackleton. Which Dr. Taleb refines as epistemocracy. Regular readers of this blog will note (taking this concept out of pure philosophy) that this is something I have written about several times. (eg Peter Druckers Enter In Ignorance)

For business owners & managers – you cannot predict the futrure based on historical events (although god knows we try) be flexible, learn to dance  As Dr Taleb says;

infinite vigilence is not possible

So rather than waste resources trying to predict the future, use your resources to bend like a grass in the breeze, and move with the wind.

Footnote: Full disclosure, I am not;

a) a mathemetician

b) a philosopher, or;

c) an economist

So I enter in my own ignorance!

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