The Black Swan
Before the discovery of Australia, people in the Old World believed that all swans were white. An unquestionable belief since it was confirmed by empirical evidence. The sight of a first black swan may have been interesting to a few ornithologists, but that is not the significance of the story. It demonstrates our severe limitations to our learning from observations or experiences and the common fragility of our knowledge.
In Disaster Management, Taleb describes a black swan as an event meeting 3 criteria:
1. It is an outlier, as it falls outside the realm of regular experiences.
2. It carries an extreme impact.
3. Human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.
Despite planning, strategizing and preparing for the unknown, many organizations are still taken aback and lead to harsh consequences. The Black Swan is an event that changes an individual, a community and the world that watches it unfold. Anyone who may have witnessed the event will never look at the world the same again.
A number of Black Swans explain almost everything in the world, from the emergence of religions, to the dynamics of historical events, to elements of our own personal lives. Black Swans have been significantly increasing since the Industrial Revolution, merely because of our tendency to depend on the more complicated. The combination of low probability and high impact is what makes The Black Swan a great puzzle. Consider the limits of our imagination with the rise of Hitler and the subsequent war? The spread of the internet? Or the consequences of the rise of Islamic fundamentalism? 9/11? Fukushima?
Taleb argues the only way to manage these events is to become anti-fragile and robust in order to become resilient to prediction errors and protected from such events. By identifying early warning signs indicating that some type of “Black Swan” event is to happen, it is suggested that proactive research and knowledge is to be obtained from these predictions to prevent or lessen the consequences.
Life is full of uncertainties. But rather than focusing on the usual, perhaps its time to divert our attention. If you want to get an idea on a friend’s temperament, ethics, and personal elegance, you need to look at him/her under severe circumstances, not under the regular glow of daily life. Similarly, we find ourselves understanding health substantially by examining what constitutes wild diseases and epidemics. The normal is often irrelevant, or rather, Great Intellectual Fraud.