Black Swans

The Urban Dictionary defines a black swan as an event, positive or negative, that is deemed improbable and results in massive consequences. A black swan is unpredictable, carries massive impact, and after the fact, we make up an explanation that makes it appear less random and more predictable than it actually was. The success of Microsoft, Google, and Facebook are all contemporary examples of black swans. So was 9/11... and 1914 and Hitler and the fall of the Berlin Wall and Islamic fundamentalism and of market crash of 1987. Nations dissolve into anarchy, wars start, unknown people suddenly become famous - all examples of black swans. In fact, black swans can be said to underlie nearly everything about our world, from the daily events of our lives to the formation of entirely new ideologies, yet we remain largely blind to their random occurrence.

Before the New World was discovered by the Old World everyone knew and accepted that all swans were white. When ornithologists spotted their first black swan in Australia they were shocked. An unassailable, completely authenticated belief, confirmed by observation for thousands of years, was invalidated by the confirmed sighting of the first black swan. If there is a lesson in this it is that it illustrates the severe limitation to our learned knowledge that is strictly derived from observation and experience; and that all knowledge, no matter how solidly believed and confirmed, remains fragile.

Count the significant events, the tech advances, and inventions of convenience that you have experienced since you were born. Compare them to what was forecast, predicted by the "experts". How many of these sprung up out of an anticipated plan or notion? Most of the events in our lives that have profound and lasting impact were not predicted. They are Black Swans. Since very little is the result of design and planning, perhaps we all need to rely less on managed top-down planning and focus more of our energies on spontaneous tinkering and preparedness for the unexpected. The social science followers of both Karl Marx and Adam Smith fail to understand that the reason free markets and a free society work so well is because they allow people to be lucky, thanks to serendipitous trial and error, not by issuing rewards for skill. We should all tinker more and not focus so much on what we think we know, always preparing for the random unpredictability of the world we live in.