A ‘Black Swan’ is the occurrence of high-impact, hard-to-predict and rare events beyond normal expectations
A ‘Black Swan’ is the occurrence of high-impact, hard-to-predict and rare events that are beyond the realm of normal expectations. Despite our hard work and successes, we have already seen the black swans overhead. We will see them again before the next election.
I’m pleased to hear that Roy is reading The Black Swan. It’s a good book in which Taleb argues that markets are chaotic systems prone to unpredictable catastrophic failure – I’d be interested in how Roy squares this with the ACT philosophy that markets are perfectly efficient systems that should govern every aspect of our society.
I don’t think Taleb’s theories about the epistemology of chance apply to politics. To use his terminology, political events occur in the realms of mediocristan not extremistan. Political parties do not appear out of nowhere and capture 99.9% of the vote, they don’t disappear overnight, voters respond (fairly) rationally to broad social and economic trends, not unpredictable changes in technology or market conditions.
It might seem to politicians as if their world is subject to extreme, unpredictable events – just ask Phil Heatley – but at a macro level politics is subject to known probabilities. Taleb has made himself a huge amount of money hedging against unpredictable events in the financial markets, but for a politician or a party to try and build a policy platform around unpredictable or statistically unprobable events would be clinically insane.
(So maybe it’s a pretty good fit for ACT after all.)