The Black Swan: The Impact of the Highly Improbable

I received helpful comments from the voracious intellectual Paul Solman (who went through the manuscript with a microscope). I owe a lot to Phil Rosenczweig, Avishai Margalit, Peter Forbes, Michael Schrage, Driss Ben Brahim, Vinay Pande, Antony Van Couvering, Nicholas Vardy, Brian Hinch-cliffe, Aaron Brown, Espen Haug, Neil Chriss, Zvika Afik, Shaiy Pilpel, Paul Kedrosky, Reid Bernstein, Claudia Schmid, Jay Leonard, Tony Glickman, Paul Johnson, Chidem Kurdas (and the NYU Austrian economists), Charles Babbitt, plus so many anonymous persons I have forgotten about[64] . . .

Ralph Gomory and Jesse Ausubel of the Sloan Foundation run a research funding program called the Known, the Unknown, and the Unknowable. They offered their moral and financial help for the promotion of my ideas—I took the invaluable moral option. I also thank my business partners, coauthors, and intellectual associates: Espen Haug, Mark Spitz-nagel, Benoît Mandelbrot, Tom Witz, Paul Wilmott, Avital Pilpel, and Emanuel Derman. I also thank John Brockman and Katinka Matson for making this book possible, and Max Brockman for his comments on the draft. I thank Cindy, Sarah, and Alexander for their tolerance. In addition, Alexander helped with the graphs and Sarah worked on the bibliography.

I tried to give my editor, Will Murphy, the impression of being an unbearably stubborn author, only to discover that I was fortunate that he was an equally stubborn editor (but good at hiding it). He protected me from the intrusions of the standardizing editors. They have an uncanny ability to inflict maximal damage by breaking the internal rhythm of one’s prose with the minimum of changes. Will M. is also the right kind of party animal. I was also flattered that Daniel Menaker took the time to edit my text. I also thank Janet Wygal and Steven Meyers. The staff at Random House was accommodating—but they never got used to my phone pranks (like my trying to pass for Bernard-Henri Levy). One of the highlights of my writing career was a long lunch with William Goodlad, my editor at Penguin, and Stefan McGrath, the managing director of the group. I suddenly realized that I could not separate the storyteller in me from the scientific thinker; as a matter of fact, the story came first to my mind, rather than as an after-the-fact illustration of the concept.

Part Three of this book inspired my class lectures at the University of Massachusetts at Amherst. I also thank my second home, the Courant Institute of Mathematical Sciences of New York University, for allowing me to lecture for three quarters of a decade.

It is unfortunate that one learns most from people one disagrees with—something Montaigne encouraged half a millennium ago but is rarely practiced. I discovered that it puts your arguments through robust seasoning since you know that these people will identify the slightest crack—and you get information about the limits of their theories as well as the weaknesses of your own. I tried to be more graceful with my detractors than with my friends—particularly those who were (and stayed) civilized. So, over my career, I learned a few tricks from a series of public debates, correspondence, and discussions with Robert C. Merton, Steve Ross, Myron Scholes, Philippe Jorion, and dozens of others (though, aside from Elie Ayache’s critique, the last time I heard something remotely new against my ideas was in 1994). These debates were valuable since I was looking for the extent of the counterarguments to my Black Swan idea and trying to figure out how my detractors think—or what they did not think about. Over the years I have ended up reading more material from those I disagree with than from those whose opinion I share—I read more Samuelson than Hayek, more Merton (the younger) than Merton (the elder), more Hegel than Montaigne, and more Descartes than Sextus. It is the duty of every author to represent the ideas of his adversaries as faithfully as possible.

My greatest accomplishment in life is to have managed to befriend people, such as Elie Ayache and Jim Gatheral, in spite of some intellectual disagreements.

Most of this book was written during a peripatetic period when I freed myself of (almost) all business obligations, routines, and pressures, and went on meditative urban walks in a variety of cities where I gave a series of lectures on the Black Swan idea.[65] I wrote it largely in cafés—my preference has always been for dilapidated (but elegant) cafés in regular neighborhoods, as unpolluted with persons of commerce as possible. I also spent much time in Heathrow Terminal 4, absorbed in my writing to the point that I forgot about my allergy to the presence of strained businessmen around me.

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