The Black Swan: The Impact of the Highly Improbable

I hope I’ve sufficiently drilled home the notion that, as a practitioner, my thinking is rooted in the belief that you cannot go from books to problems, but the reverse, from problems to books. This approach incapacitates much of that career-building verbiage. A scholar should not be a library’s tool for making another library, as in the joke by Daniel Dennett. Of course, what I am saying here has been said by philosophers before, at least by the real ones. The following remark is one reason I have inordinate respect for Karl Popper; it is one of the few quotations in this book that I am not attacking.

The degeneration of philosophical schools in its turn is the consequence of the mistaken belief that one can philosophize without having been compelled to philosophize by problems outside philosophy. … Genuine philosophical problems are always rooted outside philosophy and they die if these roots decay. … [emphasis mine] These roots are easily forgotten by philosophers who “study” philosophy instead of being forced into philosophy by the pressure of nonphilosophical problems.

Such thinking may explain Popper’s success outside philosophy, particularly with scientists, traders, and decision makers, as well as his relative failure inside of it. (He is rarely studied by his fellow philosophers; they prefer to write essays on Wittgenstein.)

Also note that I do not want to be drawn into philosophical debates with my Black Swan idea. What I mean by Platonicity is not so metaphysical. Plenty of people have argued with me about whether I am against “essentialism” (i.e., things that I hold don’t have a Platonic essence), if I believe that mathematics would work in an alternative universe, or some such thing. Let me set the record straight. I am a no-nonsense practitioner; I am not saying that mathematics does not correspond to an objective structure of reality; my entire point is that we are, epistemologically speaking, putting the cart before the horse and, of the space of possible mathematics, risk using the wrong one and being blinded by it. I truly believe that there are some mathematics that work, but that these are not as easily within our reach as it seems to the “confirmators.”

The Bishop and the Analyst

I am most often irritated by those who attack the bishop but somehow fall for the securities analyst—those who exercise their skepticism against religion but not against economists, social scientists, and phony statisticians. Using the confirmation bias, these people will tell you that religion was horrible for mankind by counting deaths from the Inquisition and various religious wars. But they will not show you how many people were killed by nationalism, social science, and political theory under Stalinism or during the Vietnam War. Even priests don’t go to bishops when they feel ill: their first stop is the doctor’s. But we stop by the offices of many pseudo-scientists and “experts” without alternative. We no longer believe in papal infallibility; we seem to believe in the infallibility of the Nobel, though, as we saw in Chapter 17.

Easier Than You Think: The Problem of Decision Under Skepticism

I have said all along that there is a problem with induction and the Black Swan. In fact, matters are far worse: we may have no less of a problem with phony skepticism.

a. I can’t do anything to stop the sun from nonrising tomorrow (no matter how hard I try),

b. I can’t do anything about whether or not there is an afterlife,

c. I can’t do anything about Martians or demons taking hold of my brain.

But I have plenty of ways to avoid being a sucker. It is not much more difficult than that.

I conclude Part Three by reiterating that my antidote to Black Swans is precisely to be noncommoditized in my thinking. But beyond avoiding being a sucker, this attitude lends itself to a protocol of how to act—not how to think, but how to convert knowledge into action and figure out what knowledge is worth. Let us examine what to do or not do with this in the concluding section of this book.

Part 4: THE END

Chapter Nineteen: HALF AND HALF, OR HOW TO GET EVEN WITH THE BLACK SWAN

The other half—Remember Apelles—When missing a train can be painful

It is now time for a few last words.