In the main, I found “Black Swan” to be terribly disappointing: long-winded, poorly structured, unnecessarily acerbic, often embarrassingly childish, but above all of limited practical application. Author Nassim Taleb launches a frontal assault on social scientists of all stripes, but unleashes particular venom at economists, especially Nobel Prize winners who’s work is based on Gaussian standard distribution. As Gregg Easterbrook commented in a review of “Black Swan” in the New York Times, “Criticizing the accomplished is healthy; mocking them because they are accomplished is sophomoric.” I agree. One gets the sense that Taleb (or his editors) wanted to “punch this book up” in an effort to appeal to a wider, mainstream audience, the types of folks who scoop up “Freakenomics” at airport bookshops. If so, they overshot their goal by a country mile.
For all that I didn’t like about “Black Swan,” Taleb makes several critical points that are worth considering with care. Most of all, I found his warnings about the “narrative fallacy” to be most convincing. “We harbor a crippling dislike for the abstract,” he writes. We seek to fit life and observed experiences into crisp shapes, what he calls “platonicity,” in order to make better sense of the world. “We like stories,” he says, “we like to summarize, and we like to simplify.” The danger is when we confuse these tight and digestible stories with “the truth.”
My work experience at Intuit has confirmed this observation (note: Taleb warns, among many other things, of a “confirmation bias” where we readily accept arguments that confirm what we already believe). Intuit is always on the look out of for the secrets to deliver breakthrough product innovations and readily embraces new procedures and practices developed by other firms, such as Amazon’s “two pizza rule” (product teams need to be small enough to be fed by two pizzas) or “The Lean Startup” focus on leaps of faith hypothesis coupled with rapid prototyping and experimentation. These devices are almost all well-and-good, but they don’t explain why one product succeeds and another fails, at least I don’t think so. Reality is much messier than that. The difference between success and failure is more likely the collection of thousands, perhaps millions, of smaller decisions and actions that “escape the eye of history” as it were. There is no better – and certainly no more dramatic – articulation of this perspective than coach Tony D’Amato’s (played by Al Pacino) locker room pregame pep talk in the movie “Any Given Sunday”: “…the inches we need are everywhere around us!” Indeed, they are.
A foundational element of Taleb’s worldview is that we live, mainly, in a so-called Extremistan, where the “highly unlikely” occurs more often then we presume and which renders all other observations, certainly those based on a bell shaped distribution, completely invalid. Consider the modeling of height and wealth. In the first case, you take 999 randomly selected humans on planet earth and put them in an auditorium. The average (median) height is perhaps 5’7”. Next, for the 1,000th participant you include the tallest man on earth, a solid eight-footer. The median height of those 1,000 humans barely moves with this most extreme addition. Now consider wealth. The 999 randomly selected humans may have an average wealth of $50,000. And then you add Bill Gates for participant 1,000 and suddenly the “average” wealth per human shoots from $50K to $250M (or whatever it would be). Human height is from Mediocristan; wealth is from Extremistan. Taleb’s core argument is that we live in Extremistan, yet our statisticians and economists and elected leaders continue to behave as though we live in a completely different world, Mediocristan. Mediocristan is the world of platonicity (a frustrating part of this book is keeping straight all the corny names Taleb has made up, although he does include a helpful glossary in the back). “Platonic is top-down, formulaic, close-minded, self-serving and commoditized,” which is perfect for exploring Mediocristan. “A-platonic is bottom-up, open-minded, skeptical, and empirical,” and that’s what the author claims is necessary to navigate through Extremistan.
To make things worse, those platonic intellectuals investigating uncertainly have traditionally focused on games of chance, the most ill-suited analogy possible, according to Taleb. These games of chance – cards, slots, dice – are actually some of the most predictable things in life, he says. Where else can you get such mathematically clear outcomes for success and failure over multiple attempts? Far from being risky, they are more like testing average heights among humans. The tendency to promote classic gambling uncertainty to the “real world” is something that Taleb dubs the “Ludic fallacy,” another one of his corny creations.
In the end, what frustrated me most about “Black Swan” was what to do with his insights, most of which have real merit. Taleb implores us not to trust so-called experts, especially when they are making predictions about the future. These men and women of supposed great learning are “mere entertainers,” he sneers. They are like people “driving a school bus blindfolded” – incredibly dangerous and irresponsible. So what should responsible members of society do? What are the “lessons of the Black Swan”? Well, there really aren’t any, at least not so far as I could tell. Over nearly 400 pages of dense text, Taleb only shreds and tears down. The closest he comes to providing constructive, actionable feedback is this: “favor experimentation over storytelling, experience over history, and clinical knowledge over theories.” Fair enough, I suppose; but hardly much.
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