“The Black Swan” by Nassim Taleb
After 3 years of owning the book, I finally made the effort and read the book from cover to cover. It was hard to start off, but then went in a free-flow. There are many reviews on the Internet, so I won’t go on about the book at length, only mention a few things which touched me personally and professionally. There are five points that I take from this wonderful and insightful book.
Life is bloody unpredictable
First of all, the prevalence of contingency in social reality, to an extent when planning and knowledge have very serious limitation. The bottom line is not to dismiss planning or knowledge and resort to mysticism or sufism, but to take it as a relative activity and being humble in the face of unpredictable reality. A good example given by Taleb is a turkey who is killed one day. The turkey, based on previous experience, and very rationally so, thinks it will continue being fed, but, alas, is killed one day. Such events are always unexpected.
How NOT to do research
Secondly, about the way to conduct research, not from theory to data, but from data to theory. And that empirical data is absolutely necessary, and is a starting point of inquiry. This makes sense, but is much harder to achieve in real life. Unfortunately, this is not how we are rewarded in academia, we are rewarded for a number of publications in high impact journals, and not by the distinction between empirical and non-empirical work. Taleb’s points to the institutional limits of academia.
How to live on this (sinful) Earth
Thirdly, that living like a stoic may be a good idea. That is, releasing ourselves from the tyranny of things, being ready to lose them, even if we enjoy their utility at this present moment. Seneca, a Roman would raise up every day with the knowledge that he may lose everything at any point, and he got himself accustomed to be free from things to a point of not caring, and being robust. That resonates with me, although may be seen as nihilistic. And it is also Dude-ism from The Big Lebowsky.
Want to get lucky? Get ready first!
Fourthly, about exposure to black swans (low probability/high impact events) — how it can help to be exposed to good black swans and protected from the bad ones. Taleb spells out the “80/20″ (or 50/1 as he names it) strategy on how to invest money to maximise one’s exposure to good ‘black swans” and to avoid behaviour which looks OK, but is full of exposure to black swans (bad ones). For example, taking an academic job in some non-western country that has no intellectual tradition or is isolated from the mainstream academia may look like a robust option, but when funding dries up, or the time passes by and a scholar does not publish in such a place, vulnerability to great shocks becomes huge. That is exposure to vulnerability (bad black swans) and zero exposure to good black swans.
Why it’s better be a hooker than a chess-player
Finally, the useful distinction between the scalable and non-scalable professions, and the unexpected choice for non-scalable professions in one’s choice of profession. A good example is what is more likely to be successful — being a chess-player or being a hooker. The chess-player is a scalable profession, if you get lucky, you get the non-proportional benefits as opposed to other chess-players which are not all that much worse than you as players. But if you do not get lucky, you will end up struggling in making a living. But if you are a hooker, demand is there, and by doing your job well (arguably), you will make your living. Now, i am not saying that be a hooker, I am saying that be aware of the risks when you choose to become a chess-player!