Summary
In The Black Swan, Nassim Nicholas Taleb is working the same territory as Daniel Kahneman in Thinking, Fast and Slow. Both of them have us investigating our thinking. For Kahneman, it’s to make us own up, while Taleb has more direct emphasis on avoiding disaster.
Taleb wants us to realize that we overuse normal-curve thinking, which makes us minimize risk and have no expectations out of the ordinary: like the turkey whose entire experience goes to show how human beings love and care about him and prove it by feeding him–until Thanksgiving day arrives and he’s dinner.
The normal curve tells us that the further out from the mean we go, the rarity of unusual events rapidly increases. This approach is great when it works. We are not going to meet any 20-foot tall people or anyone living to 150 years old. But the normal curve often doesn’t apply. We can’t predict which books will be best sellers or how how the sales count will go on one of them. We can’t predict when a war will occur or just how one will transpire.
The consequence of applying the bell curve in every situation is that we underestimate the probability of very rare events. While these rare events (black swan events) have a very low probability of occurring, their occurrence would also result in an extreme impact.
When we think normal curves apply but they don’t, we are confusing what the world is like with how we would like it to be. We are shoving reality into the Procrustean bed of our idealized thinking. That distorts our vision of reality. Taleb suggests keeping an open mind, so that at least we won’t be walking blindly into risk. We can’t prevent the unexpected, but we can at least expect such events and maybe even turn the black swans into grey swans.