Thursday, May 01, 2008

The Black Swan

I recently read The Black Swan: The Impact of the Highly Improbable. That was an interesting book. The author Nassim Nicholas Taleb is an intellectual with many interests who seems to have read an incredible number of books and papers. Some of his ideas are quite interesting, including the parts about silent evidence.

Silent evidence is all around if you think to look for it. Consider Britney Spears; or Ellen Page for that matter (how many people reading this have actually seen Juno). Britney parlayed modest musical talent, looks, self marketing, and attention-seeking skills into incredible fame and fortune. She might seem special but there are thousands of Britneys working today at Hooters and crowded nightclubs. We just don't hear about them because they didn't make it. They have the same characteristics as Britney, they just weren't lucky.

We like to think that things are proceeding in an orderly way. That the prosperous country you live in will always be prosperous. The government has things under control. The pension money is safe and managed by professionals. House prices never go down. The current problems in the financial markets and ABCP will be resolved this year with minimal disruption in the everyday lives of most people. The world won't run out of oil or food in our lifetimes.

It seems that in fact the future cannot be reliably predicted. Some unforeseen things (like 9/11 , the sudden rise of the World Wide Web, or Google) will happen which will "change the game" in ways we can't anticipate today. What seems a comfortable steady state can be very suddenly rocked for better or possibly worse. In the first version of his book "The Road Ahead", Bill Gates somehow failed to mention the Web; incredibly it didn't seem important to him. This book was written by Bill Gates in the late 1990s. It just shows that even "experts", those with the most experience and information can be totally blindsided even in their own areas.

The book is a challenging read but worth getting through. I like to more or less alternate heavy reading like The Black Swan with light reading like Stephen King. I have a few books both heavy and light lined up to read in the coming months.

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