Nassim Nicholas Taleb’s (NNT) The Black Swan is a “best seller,” and therefore may be having a certain influence on our thinking in many fields including Knowledge Management. From the viewpoint of KM, The Black Swan isn’t about what we know, or about what we know we don’t know, but rather is a book that focuses attention on the un- or ill-conceived, on what we don’t know we don’t know, Donald Rumsfeld’s famous “unknown unknowns.” And the concern of the book is how we can begin to think about “unknown unknowns,” and prepare and position ourselves for them, so that we live in a state that is more robust relative to their possible occurrence and impact.
In an earlier post, I gave NNT’s definition of Black Swans in terms of three attributes. First, they are events that are “outliers” in the sense that they fall outside of the realm of common expectations. Second, they carry an extreme impact. Third, even though they are outliers, after they occur human nature makes us formulate explanations for them so we make them explainable and “predictable” retrospectively.
While NNT doesn’t raise the issue explicitly, I think that the many examples of Black Swans given in the book make clear that he doesn’t view events as either expected, or outside the realm of common expectations. There is a third class of events that are at once unexpected and yet not “outside the realm of common expectations.” This is of interest, because according to Popper (Appendix), one of NNT’s favorite philosophers and a primary inspiration of his ideas about Black Swans, the need to formulate explanations to make unexpected events explainable and predictable, is a need that is awakened in response to any unexpected events, and not simply Black Swans. Also, any event that runs counter to our expectations, may or may not have great impact in the sense that it helps to bring about events that have extreme positive and/or negative value for people. So, in the end what really distinguishes “Black Swans” from other unexpected, impactful events? It must be that in addition to mere unexpectedness and great impact, Black Swan events must “fall outside the realm of common expectations,” and they must be viewed, as NNT makes clear as relative to our expectations, mental models, beliefs, and theories.
So then, what are “common expectations?” Well, this is not really clarified by NNT. It’s clear he’s not simply referring to majority or plurality of opinion about whether an event is a possibility. Nor is he referring to the existence of any recognition that an event is a possibility. If he meant that, he wouldn’t refer to World War I, or the crash of 1987, or the rise of Hitler, or the fall of the Soviet Bloc as Black Swan events. So where is the boundary between “the realm of common expectations,” and the realm of “uncommon expectations.” Again NNT doesn’t tell us where that boundary is, so it may be very hard to agree on whether something is a Black Swan event.
In the current context, is the Crash of 2008 a Black Swan event? Many predicted it, including Taleb, George Soros, and Nouriel Roubini. Moreover, others, who were warned of a possible crash, much before the event, certainly were forced to think of the possibility by those who warned them. Does their state of willful denial make the crash a Black Swan event? What about Hurricane Katrina. Forecasters in the New Orleans area had been warning the Federal Government of the possibility that a Hurricane could easily occur that would overwhelm New Orleans unless the Army Corps of Engineers reconstructed the city’s protective network. These warnings were ignored. Does that make Katrina a Black Swan event, or just an instance of the willingness of Federal decision makers to take foolish risks with a city that few of them lived in? Was the 9/11 attack a Black Swan event? There were published stories about terrorists seizing planes and using them as weapons, and American decision makers at the highest level who were warned about the intention of al qaeda to attack in the United States. After the event the Bush Administration continually claimed that no one could have anticipated 9/11. And certainly the highest level decision makers in the Bush Administration could not conceive of it. But given the fiction about it and the warnings received from outgoing members of the Clinton Administration were we really dealing with a Black Swan?
Now, in considering this question, and I think NNT might say this, does a crisp definition of the “Black Swan” really matter? After all, isn’t the important thing, just to be ever mistrustful of our existing knowns, and of our ideas about “known unknowns,” and to be ever-vigilant for the possibility of “Black Swans” that run counter to our expectations and “Black Swans” that reflect categories not yet even conceptualized by us? Or put another way, shouldn’t we be ever vigilant for the possibility that our theories or models will prove false, and/or that our very paradigms will prove to be inadequate as tools for formulating expectations that can survive reality?
And I agree that this is the most important lesson to be learned from the idea of “The Black Swan.” But I need also to ask, isn’t this what Popper’s work, and, more broadly, Critical rationalism, and Evolutionary Epistemology already teach us, and therefore isn’t “The Black Swan” image just a metaphor for bringing home the ideas of fallibilism and systematic doubt that arise from these bodies of thinking? Isn’t it, in the end, a popularization device for these ideas, which, however, doesn’t really advance their conceptualization? If this is correct, then the wisdom offered by The Black Swan has already been incorporated into Knowledge Management by those who are already using Evolutionary Epistemology as the foundation of their approach to Knowledge Management.