The structural issue with the academy is that progression is achieved through novel ideas that are judged to be clever ideas. Those are not necessarily the best or most useful ideas when attempting to model reality. The first paper written on the World Wide Web was rejected because the ideas were not considered novel and the system was too simple. The academy was trying to write papers, not solve an engineering problem.

The moderating force on the academy is the need to teach. Unnecessary complexity is harder to teach than stuff that is simple and elegant.

That said, I really wish that we did not have to watch that idiot from Harvard who almost sunk the world financial system with his ‘Long Term Capital Management’ hedge fund lecturing us all on why the bailout is unnecessary. You can win the Nobel prize and still be a dangerous crank. At the very least I would like to see equal mention given to his connection to LTCM as his Nobel prize. And as Taleb points out, there was nothing Long Term about that particular hedge fund.

Man has always suited himself to his envioroment. His greatest strength is versatility. Due to the nature of our craniums and the problem solving they allow, man has been able to adapt to almost any situation. So to say that man is wired more “extremist” today doesn’t really reside with me well.

To be fair, not only is it subject to plenty of counterargument, it is, like most evo-bio or evo-psych talk on the internet, little more than a plausible just-so story. The only evidence behind my story is the well-documented inadequacy of current human brains that it purports to explain. That certainly exists. How it came to be so, I honestly have no idea. My story is merely one, possibly testable hypothesis that represents my internal composite of stories I’ve heard around this particular brain misfeature from various writers I respect.

I haven’t read TBS, only bits and pieces of Taleb’s articles and blog posts, but my initial presumption is that he, like others, is thinking of an ancestral environment like I describe, one in which “black swans” aren’t worth devoting resources to analyzing, rather than one in which they do not exist or are dramatically rarer than today. For evolutionary purposes, they are equivalent.

Are blockbuster movie black swans to be therefore filed under the heading of: ” one good speculation is worth a life-time of investments?”

The sort of people already aware of the “ubiquity of bell-curves in an emergent world”
quit reading Newsweek after High School.

“Am I totally wrong?” No.

Authors of air plane books are required to make a ritual sacrifice at the altar of Darwin.

Species address the extreme event problem with r-selected, not K-select strategies, right?

The distinction between extremistan and mediocristan is about the slope of the distribution in log-log space. It’s always been, always will be, an extremely skewed distribution. But like the distribution of wealth the point isn’t that it’s skewed; it’s how it trends.

His analysis of the effect of the Paramount anti-trust action and the break-up of the studios is interesting, especially when read against Coase on the nature of the firm.

FWIW, Taleb blurbed the book: “If you want an exposition of the “wild” type of uncertainty, this is the book. I know of no better text to understand kurtosis, the contribution of the very small to the very large, the dynamics of rare events. The value of this book lies beyond the film industry. In addition it is written with great clarity and does not use anything beyond intuitive mathematics.”

Because that’s when Taleb hints things were different. If he’s wrong about paleolithic life, he’s probably not right about any more modern period. It’s not as though there’s much plausibliity to the hypothetis that were born in Extremistan, moved to Mediocristan for a couple thousand years, then moved back to Extremistan. Either we’ve always lived with about as many black swans as we have now, or else it’s a case of modern life becoming increasingly susceptible to them.

Since my background and preconceptions are rather different from most of the other commentators, I wonder why the opposition to the present age, be it moderate or extreme, is some generalization about peasant cultures or the paleolithic. Looking over the the Mediterranean world from 500 BC to 500 AD (sorry about the abbreviations, old habits die hard) with the perhaps tendentious exception of Gibbon’s beloved Antonine Age I can think of no time where rapid, and for many disastrous, change, what I understand as a black swan in this discussion, wasn’t the norm.

Perhaps connected is the notion that over that millenium it may not ever make sense to speak of “policy” as we might use the word; and only in the time of effective Roman emperors was there a real decision making process.

You’d think he could have checked…”

In fairness to Taleb, this is exactly how he presents it. Black swas are surprising until you go to Australia and see one. He did check, that is.

Since every crisis can be predicted after the fact, it’s always true that the crisis occurred because people didn’t listen to the nay-sayers. In other words, Black Swans are events that are unpredictable enough in people’s minds that they can’t pay attention to them.

Take a crisis that hasn’t happened yet: Agriculture based on monoculture. Lots of people, whom we are all ignoring, are warning that we’re vulnerable to some disease that could substantially drop world yields leading to world-wide starvation and anarchy.

If it occurs, is this a Black Swan?

The answer, despite it’s theoretical predictability, is yes, because as humans, we’re simply incapable of taking that sort of risk seriously and suffering the competitive disadvantage against the rest of the world that continues to reap the productive benefits of monoculture.

In other words, there are going to be whole classes of theoretically predictable events that are going to be Black Swans in any realistic use of the term.