The Black Swan: The Impact of the Highly Improbable

analyses. I am fond of literary history. Ancient history satisfies my desire to build my own self-narrative, my identity, to connect with my (complicated) Eastern Mediterranean roots. I even prefer the accounts of older, patently less accurate books to modern ones. Among the authors I’ve reread (the ultimate test of whether you like an author is if you’ve reread him) the following come to mind: Plutarch, Livy, Suetonius, Diodorus Siculus, Gibbon, Carlyle, Renan, and Michelet. These accounts are patently substandard, compared to today’s works; they are largely anecdotal, and full of myths. But I know this.

History is useful for the thrill of knowing the past, and for the narrative (indeed), provided it remains a harmless narrative. One should learn under severe caution. History is certainly not a place to theorize or derive general knowledge, nor is it meant to help in the future, without some caution. We can get negative confirmation from history, which is invaluable, but we get plenty of illusions of knowledge along with it.

This brings me back once again to Menodotus and the treatment of the turkey problem and how to not be a sucker for the past. The empirical doctor’s approach to the problem of induction was to know history without theorizing from it. Learn to read history, get all the knowledge you can, do not frown on the anecdote, but do not draw any causal links, do not try to reverse engineer too much – but if you do, do not make big scientific claims. Remember that the empirical skeptics had respect for custom: they used it as a default, a basis for action, but not for more than that. This clean approach to the past they called epilogism[39]

But most historians have another opinion. Consider the representative introspection What Is History? by Edward Hallett Carr. You will catch him explicitly pursuing causation as a central aspect of his job. You can even go higher up: Herodotus, deemed to be the father of the subject, defined his purpose in the opening of his work:

To preserve a memory of the deeds of the Greeks and barbarians, “and in particular, beyond everything else, to give a cause [emphasis mine] to their fighting one another”.

You see the same with all theoreticians of history, whether Ibn Khaldoun, Marx, or Hegel. The more we try to turn history into anything other than an enumeration of accounts to be enjoyed with minimal theorizing, the more we get into trouble. Are we so plagued with the narrative fallacy?[40]

We may have to wait for a generation of skeptical-empiricist historians capable of understanding the difference between a forward process and a reverse one.

Just as Popper attacked the historicists in their making claims about the future, I have just presented the weakness of the historical approach in knowing the past itself.

After this discussion about future (and past) blindness, let us see what to do about it. Remarkably, there are extremely practical measures we can take. We will explore this next.

Chapter Thirteen: APPELLES THE PAINTER, OR WHAT DO YOU DO IF YOU CANNOT PREDICT?[41]

You should charge people for advice – My two cents here – Nobody knows anything, but, at least, he knows it – Go to parties

ADVICE IS CHEAP, VERY CHEAP

It is not a good habit to stuff one’s text with quotations from prominent thinkers, except to make fun of them or provide a historical reference. They “make sense”, but well-sounding maxims force themselves on our gullibility and do not always stand up to empirical tests. So I chose the following statement by the uberphilosopher Bertrand Russell precisely because I disagree with it.

The demand for certainty is one which is natural to man, but is nevertheless an intellectual vice. If you take your children for a picnic on a doubtful day, they will demand a dogmatic answer as to whether it will be fine or wet, and be disappointed in you when you cannot be sure. …

But so long as men are not trained [emphasis mine] to withhold judgment in the absence of evidence, they will be led astray by cocksure prophets … For the learning of every virtue there is an appropriate discipline, and for the learning of suspended judgment the best discipline is philosophy.

The reader may be surprised that I disagree. It is hard to disagree that the demand for certainty is an intellectual vice. It is hard to disagree that we can be led astray by some cocksure prophet. Where I beg to differ with the great man is that I do not believe in the track record of advice-giving “philosophy” in helping us deal with the problem; nor do I believe that virtues can be easily taught; nor do I urge people to strain in order to avoid making a judgment. Why? Because we have to deal with humans as humans. We cannot teach people to withhold judgment; judgments are embedded in the way we view objects. I do not see a “tree”; I see a pleasant or an ugly tree. It is not possible without great, paralyzing effort to strip these small values we attach to matters. Likewise, it is not possible to hold a situation in one’s head without some element of bias. Something in our dear human nature makes us want to believe; so what?

Philosophers since Aristotle have taught us that we are deep-thinking animals, and that we can learn by reasoning. It took a while to discover that we do effectively think, but that we more readily narrate backward in order to give ourselves the illusion of understanding, and give a cover to our past actions. The minute we forgot about this point, the “Enlightenment” came to drill it into our heads for a second time.

I’d rather degrade us humans to a level certainly above other known animals but not quite on a par with the ideal Olympian man who can absorb philosophical statements and act accordingly. Indeed, if philosophy were that effective, the self-help section of the local bookstore would be of some use in consoling souls experiencing pain – but it isn’t. We forget to philosophize when under strain.

I’ll end this section on prediction with the following two lessons, one very brief (for the small matters), one rather lengthy (for the large, important decisions).

Being a Fool in the Right Places

The lesson for the small is: be human! Accept that being human involves some amount of epistemic arrogance in running your affairs. Do not be ashamed of that. Do not try to always withhold judgment – opinions are the stuff of life. Do not try to avoid predicting – yes, after this diatribe about prediction I am not urging you to stop being a fool. Just be a fool in the right places.[42]

What you should avoid is unnecessary dependence on large-scale harmful predictions – those and only those. Avoid the big subjects that may hurt your future: be fooled in small matters, not in the large. Do not listen to economic forecasters or to predictors in social science (they are mere entertainers), but do make your own forecast for the picnic. By all means, demand certainty for the next picnic; but avoid government social-security forecasts for the year 2040.

Know how to rank beliefs not according to their plausibility but by the harm they may cause.

Be Prepared

The reader might feel queasy reading about these general failures to see the future and wonder what to do. But if you shed the idea of full predictability, there are plenty of things to do provided you remain conscious of their limits. Knowing that you cannot predict does not mean that you cannot benefit from unpredictability.

The bottom line: be prepared! Narrow-minded prediction has an analgesic or therapeutic effect. Be aware of the numbing effect of magic numbers. Be prepared for all relevant eventualities.