The Idea
Contributed by @philhagspiel | Edited and curated by @philhagspiel
Rare events can dominate the course of history.
History usually is the best predictor of what we can expect to happen in the future. Historic trends often continue. However, exceptions to the rule happen. If these exceptions are completely surprising (to the observer) and have a major impact — both negative or positive — they’re referred to as Black Swans.
The term Black Swan originates from the (Western) belief that all swans are white because these were the only ones historically observed for millennia — until a 17th century Dutch explorer discovered black swans in Australia. This profoundly changed zoology.
The Black Swan Theory was formulated by statistician Nassim N. Taleb to describe how rare happenings can play a disproportionate, dominating role in the overall outcome of events. In other words, extreme outliers collectively play a vastly greater role than all regular and frequent events combined if you zoom out far enough.
Black Swan events can be found in history (wars), science (discoveries), technology (inventions) or finance (bubbles and crashes).
For example, the collective financial earnings of decades of regular economic activity (used as a predictor for future earnings) can be completely eradicated by one single stock market and economic crash.
Likewise, the rise of the internet as an unpredicted and surprising development changed the course of global culture in only a few years — compared to the historic trends that have been going on for hundreds of years. Similar arguments can be made about the smartphone, World Wars, or the invention of genetic modification.
The Black Swan Theory also is a useful concept to apply to individual lives. A rather macabre but illustrative example is that of an individual turkey who gets fed well every single day of the year (regular, frequent events used to predict what happens next) — only to be killed on Thanksgiving Day (Black Swan event completely unexpected from the turkey’s perspective).
We can look at our own past and see how certain unexpected events (jobs, health, relationships, acquaintances) have completely dominated the course of our life — and should thus expect the unexpected to radically change everything again in the future.
“The inability to predict outliers implies the inability to predict the course of history”
— Nassim Nicholas Taleb
“Human history is highly nonlinear and unpredictable.”
— Michael Shermer
“The correct lesson to learn from surprises: the world is surprising.”
— Daniel Kahnemann
Go Deep
- 🎥 Enjoy this beautiful and artistic Aperture video about The Black Swan Theory.
- 🎥 Watch Nassim Taleb give an introduction to his theory in this talk.
- 📝 For an overview of the concept and further links, check out Wikipedia.
- 📝 A coffeeandjunk article about the Ludic Fallacy — a closely connected concept.
Go Beyond
A few further resources you might like if you find above idea interesting:
- 📚 Nassim Taleb’s The Black Swan
- 📚 Nassim Taleb’s Fooled By Randomness
- 🎥 Nassim Taleb’s YouTube Channel
- 📝 The concept of Falsifiability
- 📝 MindVault: Amara’s Law
- 📝 MindVault: Via Negativa