Alexandra Ma
Professor Yalovsky
BUSA 100
2 December 2015
The Black Swan
Individuals are encouraged to adopt long term planning, make decisions based upon factual knowledge, and predict future situations through analyzing similar past scenarios. However, according to NYU Professor Taleb’s bestseller, The Black Swan, even well-supported predictions are futile in the occurrence of a black swan event—one that is deemed highly improbable, but causes great consequences (Taleb). The Black Swan provides a philosophical analysis on the value of factual and historical knowledge, the fallacies associated with prediction and forecasting, and the role of serendipity in the advancement of society. Through anecdotes and examples, Taleb instructs readers to …show more content…
Taleb argues that “black swan logic makes what you don’t know far more relevant than what you do know” (Taleb, 2010, p.xxiii). However, it is impossible to formulate a plan of action to accommodate the unknown variables of a situation as the knowledge outside our realm of understanding is infinite-- similar to black swan events. Taleb recalls an unnamed financial institution he worked for and mocks the executives for formulating a five-year plan. He writes: “the notion was ludicrous; growth within the firm had been organic and unpredictable…yet I am confident that today their replacements are still meeting to work on the next ‘five-year plan’” (Taleb, 2010, p. 166). While it is true that future circumstances are unpredictable, this does not make their initial plan “ludicrous” because goal-setting provides companies with a vision and initial direction. It makes sense for leaders to use known variables in order to set a plan for the future, as it is futile to invest time and resources into events that are highly unlikely to occur. It is rational to invest in earthquake proof buildings in San Andreas, because there is substantial evidence that an earthquake will occur. It is irrational to invest in zombie proof houses, even though we cannot disprove the existence of zombies in the future. Statistics and theories are not always accurate, but they still provide more certainty than the unknown. Ironically, Taleb claims that “the black swans we imagine, discuss and worry about do not resemble those likely to be Black Swans. We worry about the wrong “improbable events” (Taleb, 2010, p.77). How could we possibly worry about the “right” improbable events when there is no way to predict which black swan events will occur? His claim contradicts his suggestion to rely on the lack of knowledge we possess as we cannot employ preventative measures
Professor Yalovsky
BUSA 100
2 December 2015
The Black Swan
Individuals are encouraged to adopt long term planning, make decisions based upon factual knowledge, and predict future situations through analyzing similar past scenarios. However, according to NYU Professor Taleb’s bestseller, The Black Swan, even well-supported predictions are futile in the occurrence of a black swan event—one that is deemed highly improbable, but causes great consequences (Taleb). The Black Swan provides a philosophical analysis on the value of factual and historical knowledge, the fallacies associated with prediction and forecasting, and the role of serendipity in the advancement of society. Through anecdotes and examples, Taleb instructs readers to …show more content…
Taleb argues that “black swan logic makes what you don’t know far more relevant than what you do know” (Taleb, 2010, p.xxiii). However, it is impossible to formulate a plan of action to accommodate the unknown variables of a situation as the knowledge outside our realm of understanding is infinite-- similar to black swan events. Taleb recalls an unnamed financial institution he worked for and mocks the executives for formulating a five-year plan. He writes: “the notion was ludicrous; growth within the firm had been organic and unpredictable…yet I am confident that today their replacements are still meeting to work on the next ‘five-year plan’” (Taleb, 2010, p. 166). While it is true that future circumstances are unpredictable, this does not make their initial plan “ludicrous” because goal-setting provides companies with a vision and initial direction. It makes sense for leaders to use known variables in order to set a plan for the future, as it is futile to invest time and resources into events that are highly unlikely to occur. It is rational to invest in earthquake proof buildings in San Andreas, because there is substantial evidence that an earthquake will occur. It is irrational to invest in zombie proof houses, even though we cannot disprove the existence of zombies in the future. Statistics and theories are not always accurate, but they still provide more certainty than the unknown. Ironically, Taleb claims that “the black swans we imagine, discuss and worry about do not resemble those likely to be Black Swans. We worry about the wrong “improbable events” (Taleb, 2010, p.77). How could we possibly worry about the “right” improbable events when there is no way to predict which black swan events will occur? His claim contradicts his suggestion to rely on the lack of knowledge we possess as we cannot employ preventative measures