Black Swans

Black Swans

I was in Starbucks doing a little work this morning when I ran into a well read and very bright friend who has great insights into economic issues, and dabbles in philosophy. In the course of our conversation somehow the Black Swan Events came up and he says, “What do you mean it’s nonsense!!!! Its brilliant!” and he was serious.

The Black Swan Events or theory was created by Nassim Taleb. When I read about it I just assumed Taleb was having fun, it was all a big practical joke. After all, the idea of a Black Swan really has no tangible definition. It’s an event, that has a big consequence that some observers didn’t predict. It can be anything that in your opinion has a big consequence.

I think Taleb continues to have fun. In an interview less than a year ago, he says “my definition of randomness is as follows: incomplete understanding or incomplete information.” Come-on, how can you not see the joke there. Some people hold the philosophical argument that nothing is random (ie there is a cause for everything even if you don’t know the cause at the moment). Then, in a disingenuous twist, say that when they use the word random to describe an event, they mean they don’t know it’s cause. It is taking an ontological concept and pretending its epistimological. It's amateur philosophy. It is funny, sloppy almost circular thinking that Taleb is having fun with.

He also says things like “Consider Freakonomics one of the few works in empirical economics that is robust to consequential observation errors.” It’s wonderful, you get the illusion that something meaningful is being said, when it isn’t. He’s having fun because people actually take the nonsense seriously.