The Black Swan
A short while ago I attended a meeting of a social and discussion group I've been part of for 20 years or so. For this meeting we were asked to state what has most surprised each of us over our working lives. My answer, after some reflection, was Nobody Knows Anything.
My group buddies all tended to agree in varying levels with me, and were surprised that this statement isn't more often stated. Well, here is Nassim Taleb writing The Black Swan: The Impact of the Highly Improbable, a surprise best seller saying more or less the same thing. I guess I should have rushed into print as soon as I had this thought.
Both the author and I have the greatest respect for people who DO know things -- everyone from dentists to carpenters and even now and then a consultant. But many people in power, business, politics, and the enormous advice business all around us, really can't know what they claim they do know.
Dr. Taleb has a Ph.D. in math, and has had much success as a trader, mainly in currencies. He is a true original. I have never read a book quite like this one, and neither have you. Not even his first volume, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets, has quite the panache and bite of this volume. It is full of odd and interesting things, all informed by Taleb's passionate dislike of most business executives, almost all economists, and many other prognosticators.
The book states that luck plays a huge role in all of life -- both in one's personal life and in the huge events, natural and man-made, that assail us. Predictions are pointless in the face of life's nonlinear structure and one should just try as best as possible to look clearly at facts. His motto could be the old Dragnet line, "Just the facts, ma'am."
Taleb feels, as do several behavioral economists whom he favors, that humans naturally distort facts through their natural love of narrative. They can't help but make up causal stories to explain the sheer randomness of things. This, in turn, trips them up when they try to understand things and also gives rise to all those who make a good to great living offering just such explanations.
The author has many passions, contradictions, stories, and a very intriguing background. The book is written as a first person polemic, with darts and arrows aimed at most anyone who believes they know things about the future (or even the past). I encourage all of you to at least look through it. The book itself is a black swan: a rare, unusual, and oddly lovely thing.
RECOMMENDED READING:
The Black Swan: The Impact of the Highly Improbable (Hardcover)
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Larry Prusak is a researcher and consultant and was the founder and Executive Director of the Institute for Knowledge Management (IKM). He currently co-directs 
Comments
Larry -- Interesting that Taleb thinks that "predictions are pointless in the face of life's nonlinear structure." Paul Ormerod, an economist an author of "Why Most Things Fail" makes a similar point in an interview in the June HBR. He says "Executives overestimate the control they have over the fate of their organizations" and adds "Companies should embrace the inherent randommess that drives success and failure and that no amount of cleverness and information can overcome." If Taleb and Ormerod are right, organizational outcomes are more the result of chance than carefully devised strategy. If that's true, it suggests that companies should devote more energy to random experimentation and less to strategy development.
- Posted by Gardiner Morse
June 20, 2007 10:28
Larry - I agree with you completely about the "Black Swan". It is a totally mesmerizing work that has my head swimming both day and night. The main ideas are as slippery as they are enticing. The more deep my attempt to fully understand and apply these ideas the more they seem to slip away. This, too, is a confirmation of the ideas in the book that we are hardwired to not think about and understand uncertainty in the ways suggested by Taleb.
I would love to be involved with an actual discussion group about this book, to delve deeply into each chapter. So far I have not found any such thing. Please let me know if you are aware of any such group.
As an aside, the title of your upcoming book seems interestingly related to the “Black Swan”. I would like to know more about it, too.
- Posted by James S Reed
August 16, 2007 15:44
After finishing the book and having written a note on the book myself, I set out to read various reviews on Black Swan. What strucks me most is that people whose daily lives are affected by randomness tend to see a kindred spirit in Taleb while most professional book reviewers tend not to recognise the signifcant of Taleb's thesis and points to other much less relevant point such as the book's lack of clear structure.
- Posted by Y Zhang
November 25, 2007 06:30