Book Review: The Black Swan by Nassim Nicholas Taleb
May 23, 2008
For Nassim Nicholas Taleb, a black swan is a social or economic or cultural event that has three characteristics:
1. It is unpredictable
2. It has a massive impact
3. It is explained as being predictable after it surprises everybody
- Taleb appears to be a polymath
- He has garnered lots of good reviews
- He is more style than substance
Taleb's logic is this: If a great negative event, like 9/11, could have been predicted it would have been prevented. But the facts contradict Taleb's logic. Pearl Harbor was predicted. So, actually, was 9/11. So were all the stock market crashes he claims were unpredictable. Each of these events was foreseen by people using a combination of insight and common sense to draw conclusions about the future. But these people were ignored.
So the question is not why can't we predict "surprising major events" but why do we ignore warnings when they are given?Taleb says, "What you don't know is far more relevant than what you do know," but this is just seductive poppycock. He cites two examples: September 11 and the "secret recipe to making a killing in the restaurant business." Of the former he says that had we known we would have prevented it; of the latter, "if it were known…then someone next door would have already come up with the idea and it would have become generic. The next killing in the restaurant industry needs to be an idea that is not easily conceived of by the current population of restaurateurs."
Again, reality refutes Taleb's theory: There are, in fact, secrets to running successful restaurants. People who run successful restaurant chains know them. How do you explain the fact that these chain restaurants are successful time and time again in all sorts of different markets? And, in fact, there are different secrets. There is one secret to run a successful Houston's and another to run a successful Applebee's and another to run a successful Don Schula's Steak House. There are universal secrets and particular ones. Each restaurateur knows them. That is why they continue to be successful.This is not true of the person who opens one restaurant and succeeds. He may or may not understand the secrets he needs to know. So many people who own a single, successful restaurant fail when they try a second. Those people were lucky in their first success. But they don't disprove knowledge or the predictability of knowledge. They merely show what we already know: that sometimes people succeed out of sheer luck.
Redeeming Pleasures: Notwithstanding its critical weakness (that its theme is just plain wrong), the book does have some mitigating pleasures:- It is full of ideas - from every corner of the world of knowledge – and is thus stimulating and challenging, if you want to try to keep up with it.
- He tells the story of Umberto Eco's 30,000-book library. When visitors saw it they reacted one of two ways. The great majority said, "Wow, Professor. What a library you have. How many of these books have you read?" A tiny minority got "the point that a library is not an ego-boosting tool but a research tool" and that "unread books are far more valuable than read books."
- It is full of itself - the author is a snob but he likes being a snob and that is sort of infectious.
- In mentioning Eco, he says, "Eco belongs to that small class of scholars who are encyclopedic, insightful and nondull."
posted by M. Masterson @ 9:25 AM,
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