The Black Swan Problem

Prologue

MY FIRST INTRODUCTION TO Black Swan thinking did not come from the famous book by Nicholas Nassim Taleb published in 2007.¹ It came well before that, courtesy of my instructor as I was training to get a driver's licence for motorcycles. We had stopped at an intersection, when the arrow turned green and I just rode off onto the highway in a nice left turn. The instructor immediately told me to pull over. Once we did, he started lambasting me for having made the turn without looking even once to my right. He was visibly upset, or at least played his part well. ‘But the arrow was green,’ I meekly responded, ‘so the others must stop.’ In my worldview, that was how it worked. My experience, while not exactly extensive, supported that notion. In fact, nothing had ever suggested otherwise. ‘Do you think,’ he yelled, ‘that you can trust others to do what they are supposed to do? Never assume that!’ The penny dropped. By operating on a very naïve assumption about how the world worked, based on a handful of observations, I had managed to make myself a sucker. I was setting myself up, unnecessarily, for a highly improbable major calamity.

The deeper meaning of the Black Swan idea is not to be paranoid and develop trust issues. Rather it is to resist the temptation to base our course of action on pristine ideas and models of how the world ought to be. Especially dangerous is our inclination to form expectations of a benign world based on recent observations that all seem to indicate ...