The Black Swan: The Impact of the Highly Improbable

The central premise of the book is that there are certain unpredictable events— Black Swans—that change the course of history. Taleb argues that the improbable nature of Black Swan events increases their impact and power. If a society were to be prepared for its inevitable Black Swans, simply by acknowledging the existence of randomness, its members would perhaps be able to function more effectively once the unpredictable occurred.

According to Taleb, as the world becomes more intricate due to technological advances and evolving geopolitical developments, our collective ability to make predictions decreases, which only gives more power and weight to unpredictability. As Taleb argues, "the gains in our ability to model (and predict) the world may be dwarfed by the increases in its complexity—implying a greater and greater role for the unpredicted" (136). Taleb questions the ability of experts to make accurate predictions, given the fact that experts rely on what they already know rather than fully acknowledging not only what they don't know, but that some things are unknowable.

The true power of the unpredictable lies not in mathematical improbabilities, but in the way that they cause people to question their core beliefs. The stock market crash of 1987 for example caused many people to shift their perception about the American economic system. Taleb provides several analogies around calculating odds, including games of chance and financial investments, while acknowledging that they are faulty. When the truly unpredictable occurs, no one is expecting it to happen. When institutions or governments either initiate or allow unprecedented events to occur, the question is often: "Did you have any idea that this could have happened? Could we have stopped it?"

Taleb anticipates these questions: "I know that history is going to be dominated by an improbable event, I just don't know what that event will be" (154). Life is unpredictable, and nothing can or will stop this reality.

In Taleb's view, instead of understanding history through objective study, we rely on confirmation bias far too often. Taleb offers the example of a diplomat who uses their past list of achievements to prove that their work has been effective. When this happens, according to Taleb, past instances that corroborate claims or theories are treated as evidence. This lies at the heart of the white swan/black swan dynamic, in which a thousand consecutive white swans renders the black swan sighting virtually impossible. The danger of relying on confirmation bias to explain history is that the analysis is shallow and incomplete.

As an empiricist, Taleb values and prioritizes facts and scientifically proven observations, regardless of their implications. Objective analysis without bias leads to sounder conclusions. Furthermore, a lack of objective analysis leads to overly simplistic interpretations. As Taleb argues, "mistaking a naive observation of the past as something definitive or representative of the future is the one and only cause of our inability to understand the Black Swan" (42).

According to Taleb, interpreting events through confirmation bias perpetuates the delusional notion that the world operates in a regular and steady way. This prevents us from understanding the nonlinear nature of historical events, most notably with Black Swans, such as market crashes or international wars. If the world operated in a linear, predictable fashion, cause-and-effect relationships would explain daily phenomena.