The Black Swan, by Nassim Nicholas Taleb

The Black Swan, by Nassim Nicholas Taleb

This is a book that offers the opportunity of an education. There are so many interesting tangents — they’re a bit like hyper-links that’ll take you into another world, the world of someone who has thought deeply and has experienced a life that’s anything but average. And to be sure this book is not about what’s average.

Nassim Nicholas Taleb argues that history is dominated not by the predictable but by the highly improbable. Before Europeans discovered the black swan in Australia, the world in the northern hemisphere believed there were only white swans. In fact, the expression “it’s a black swan” was a way to make a point about something being impossible. However, improbable and consequential events do exist outside our normal spheres of reference. Understanding the kind of impact these events can have on your plans, for good or bad, and being prepared is the central argument of this book. Taleb offers good advice.

This book also has a big personality: Taleb’s. He’s opinionated, but I’m reminded of an 18th century English literature professor who responded to a comment I made in class about Samuel Johnson. I commented that Johnson was rather opinionated. He responded that it only matters that you distinguish between informed and uninformed opinion. Taleb’s opinions are mostly informed. However, I was amused by the comments of one reviewer on Taleb’s website who remarked that if Taleb had published this book in an earlier era he would have been executed. He pulls no punches. His favorite targets are historians (who fool themselves and others by reconstructing history to fit a theory), economists/bankers/money traders (who pretend they can make predictions in-spite of overwhelming evidence to the contrary), and numerous other professionals whose theories won’t stand up to negative empiricism, the method that underpins scientific advances. And he takes quite a few swipes at risk managers; humility is useful in risk management when it promotes more investigation and thinking.

This is not a book that’s been written with regulation in mind. However, as society’s risk managers regulators clearly confront black swans. Taleb’s examples include monster regulation challenges like the British physician Dr. Harold Shipman, dubbed to be the world’s most prolific serial killer; and many observation on black swans facing financial market regulators. This is an important book.


1 thought on “The Black Swan, by Nassim Nicholas Taleb

  1. Pingback: Risk Management in Regulation » Veiled truths

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