Black Swan: The Impact of the Highly Improbable – Nassim Nicholas Taleb at the Jaipur Literature Festival 2015

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Nassim Nicholas Taleb in conversation with Abhimanyu Radha Singh

As the crowds gather in the front lawns, they gaze curiously at Nassim Nicholas Taleb’s face. For those who aren’t familiar with his works, this session could have very well been just another debate and discussion concerning the 2012 movie. As the session commences, Abhimanyu Radha Singh begins by introducing Nicholas Taleb. But even before he does so, he rather amusingly clarifies that Taleb’s works “have nothing to do with the movie”. The audience lets out a little laugh.

Singh continues by defining to the audience what a ‘black swan’ event is. “A black swan is an event that is highly improbable,” says Singh. “And Nicholas here came to be known as the man who can predict black swan events,” he continues looking at Taleb. A man predicting an event that is almost unpredictable? Oh the irony!

Taleb begins by telling the story of his 2007 book- The Black Swan. He tells the audience about the extreme impact of certain kinds of rare and unpredictable events, “A domain called extremeistan is where the effect will matter”, says Taleb. “My idea of black swan is that you have to specify the domains in which extremes matter a lot.” Taking an example of Thanksgiving to demonstrate the ‘Black Swan Theory’, Taleb says, “What may be a black swan event for a turkey, will not be a black swan event for the butcher.” The butcher is prepared for the ultimate slaughter, the turkey, far from oblivious. What a simple example, yet what an effective way of putting forth an idea to a novice. “Random events are very hard to predict. It is very hard to forecast events that become an exception that matters” says Taleb to put substantiate his example even more. The audience gazes on intently. “People cannot forecast. Because unless you forecast the rare events, you’ve done nothing.” The audience now finally starts grasping the idea of the ‘Black Swan Theory’- we humans have a blindness with respect to randomness, particularly large deviations.

1Taleb continues, explaining to the audience –“If you look back, every war was preceded by tension, if you look forward, every tension was not succeeded by war.” Predicting the unpredictable seems to be the rule of the game. Taleb gives yet another example of a ‘Black Swan’ event-“9/11 was not ‘Black Swan’ for the terrorist though it was ‘Black Swan’ for the people in the tower”

Abhimanyu Radha Singh then directs the conversation to talk about Taleb’s next book Antifragile. “I wrote Antifragile so people would not skim the book and actually understand it,” Taleb comments on the importance he gives to detail in his books which are often completely missed by the reader. Taleb continues by explaining the difference between ‘organic events’ and ‘engineered events’. Organic events are quite simply those that occur naturally and the engineered events are those that are perpetuated by man. Man in all his wisdom tries to control organic events but sometimes “protecting organic events accelerates random events,” Taleb states in a matter of fact way, “You have to understand that some systems need variability, chaos, uncertainty and life.” “You have more to gain from a random event than to lose from it”, Taleb attempts to make us understand yet again.

As the session comes to a close, the audience has gone from baffled to enlightened, Nassim Nicholas Taleb’s theories finally begin to make sense and we now fully understand the perplexities of them and how vital they are to our routine existence.

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A black swan is a highly improbable event with three principal characteristics: It is unpredictable; it carries a massive impact; and, after the fact, we concoct an explanation that makes it appear less random, and more predictable, than it was. The astonishing success of Google was a black swan; so was 9/11. For Nassim Nicholas Taleb, black swans underlie almost everything about our world, from the rise of religions to events in our own personal lives.

Why do we not acknowledge the phenomenon of black swans until after they occur? Part of the answer, according to Taleb, is that humans are hardwired to learn specifics when they should be focused on generalities. We concentrate on things we already know and time and time again fail to take into consideration what we don’t know. We are, therefore, unable to truly estimate opportunities, too vulnerable to the impulse to simplify, narrate, and categorize, and not open enough to rewarding those who can imagine the “impossible.”

Buy your copy of The Black Swan-The Impact of the Highly Improbable by Nassim Nicholas Taleb here:

http://bit.ly/1Hk5RIw

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