Nassim Nicholas Taleb has written a now famous book¹ about the highly improbable and its impact on us. He also directly addresses many of the same cognitive flaws that are explored in Daniel Kahneman’s Thinking Fast and Slow² and Hans Rosling’s Factfulness³. He goes further to tie these flaws to our propensity to downplay risks and engage in wishful thinking.
A Black Swan event, according to Taleb, has three characteristics: “First, it is an outlier, … outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.” (pg. xviii)
So defined, he proceeds to argue that these events punctuate history, indeed are the key movers of history, yet are improperly understood and minimized or rationalized.
To introduce us to his own experience of Black Swans, Taleb writes about growing up during the Lebanese civil war of the early 1980’s that put an end to 1300 years of peaceful coexistence between Christians and Muslims in the Levant. He observed that most of his friends and relatives assumed the war would end quickly and that things would return to normal. Pundits and journalists seemed to share this view as well. But, of course, it was not to be. The war has dragged on endlessly with no end in sight. People did not have the ability to imagine an unexpected event with huge effects outside their experience and instead they strove to rationalize or explain it.
Taleb uses the metaphor of Umberto Eco’s library, which contained 30,000 books to introduce the concept of the unknown. He states that the great writer took people to task for wondering about the books he had read; instead, what was important was the books he hadn’t. These unread books are “anti-knowledge” — what he didn’t yet know, or the known unknowns. Black Swans appear to be an even more exotic species: the unknown unknowns, first made famous by Donald Rumsfeld.
He also introduces us to a fictional character, Yevgenia Krasnova, who has breakout success by publishing a book that no one thought would be a bestseller. He…