I hope you have all enjoyed a bit of a holiday in the past week or so - I've been using my break as an opportunity to catch up on some reading. One of the books I have on the go, however, is causing my brain to explode a little bit.
That book is The Black Swan, by Nassim Taleb. I realize that I'm late to this particular party: Taleb's book was published in 2007 and has been widely read and discussed (the book's publisher even took out full-sized ads in the London Underground, a spot usually reserved for bad television ads and the latest Victoria Beckham ghostwritten word vomit). But for anyone else who is behind the curve, I highly recommend this book. Not because you will enjoy it, but because it will make you uncomfortable.
The book's tagline reads "The Impact of the Highly Improbable," but it is much more than a collection of vignettes about unlikely events that have shaped human history. In fact, it is an exploration on the limits of human knowledge and our systematic failures to both interpret past events and predict events of the future. Actually, it's not so much of an exploration but an all-out assault on what it is that we think we know. He's particularly hard on those who claim to be experts in areas of fundamental unpredictability: political scientists, economists, historians, business executives, bureaucrats, risk analysts and just about everyone working in the financial industry (which includes Taleb). Like I said, this book will make you uncomfortable.
I don't agree with all the arguments that Taleb makes in this book. For instance, he distinguishes between the damage caused by forecasting errors made by governments and those of large corporations. Unlike governments, "corporations can go bust as often as they like, thus subsidizing us consumers by transferring their wealth into our pockets.... As individuals, we should love free markets because operators in them can be as incompetent as they wish." Well that's obviously not the case: the recent string of bankruptcies in the financial industry has not transferred wealth into, but out of, our pockets.
Rather than undermining his argument, however, I think the above example serves to reinforce the fundamental point of his book: Taleb has attempted to create a neat distinction, but the reality of the system is much more complex than he realizes at the time of writing. His misreading of history has led him to make an incorrect prediction about the future value of bankruptcies. In other words, he has unintentionally reinforced his own arguments about why we suck at predicting things. (For yet more evidence, see the FAIL list below).
I cannot possibly do justice to this book in a short blog post, so I will merely repeat my earlier recommendation to "read this book." Despite the heavy philosophical content, this is an accessible and easy-to-read (even funny) way to totally mess with your head.
