The name comes from the fact that for centuries Europeans used the term "black swan" as synonymous with something that was impossible--until they got to Australia where black swans are common. Taleb uses it as an allegory for an improbable event that changes some aspect of our world drastically.
It's funny how when you learn a new concept it becomes a way to think about the world (some might say a "lense" that filters the world according to some bias, but that's a different matter). After thinking about this for a few days, I ran across a post on Thomas Barnett's blog that said (in part):
The presumption of "good" or "bad" intell can't really be proven per se. Some always ends up being "amazingly prescient," the rest is a load of hyperbolic crap.
When things work out, no one cares about all the "bad" intell. But when it goes badly (always for a host of reasons and decisions, or simply because the decisionmakers prefer the sub-optimal outcome to no action at all), then the "amazingly prescient" intell is inevitably touted as "proof" of the intell "failure" (I made this argument first in PNM).
Also inevitably, there will be calls for "reform," none of which can possibly overcome this essentially political decisionmaking process, nor will it stop the very same politicians from declaring their pet defense programs "crucial" because "we live in a world of COMPLETE UNCERTAINTY!"From That's not how intell works (Thomas P.M. Barnett :: Weblog)
Referenced Tue May 22 2007 16:42:46 GMT-0600 (MDT)
This is one of the key points in Taleb's work. In hindsight, we fool ourselves into thinking "we could have known, if only..." and this fallacy leads to wasted efforts and blindness that keeps us from real understanding.
Taleb proposes classifying activities into those belonging to "Mediocristan" and "Extremistan." Mediocristan activities are mundane, change very little, allow good planning, and, as a result, are not prone to "black swan events." Extremistan activities seem to go along a certain trajectory for a while, but a single event can change the outcome wildly. Startups live in Extremistan, as does foreign policy.
We can further classify Extremistan activities into those that are prone to good black swan events and those that are prone to bad black swan events. Startups are an example of the former. For relatively little risk overall, there can be a huge payout--that's why venture capital works. Foreign policy is an example of the latter. No news is good news, as they say. When something happens, its likely to be catastrophic.
All in all a useful idea and one we're not prone to think about often. We like to think we can be smart enough to predict the stock market, the outcome of a piece of legislation, or even the weather. But, alas, we cannot. Taleb's advice: don't trust the so-called expert in matters of black swans.