Though many have become familiar with the term in the past couple decades, Black Swan dates back to the second century, when it had a very different meaning. At the time it was believed that black swans didn’t exist, and the Roman poet Juvenal used it as a metaphor for something that was impossible. This meaning held until the late 1600s when a European spotted a black swan for the first time while in Australia. The term then began conveying that something previously thought impossible could be disproven later.
In 2007 Nassim Nicholas Taleb published the book The Black Swan and brought the term into its current usage. The book explores how rare and unpredictable events have an extreme impact on the world. Taleb describes Black Swan events as having three key characteristics:
- They’re outliers and not predictable based on the precedent of past events
- They have an outsized impact
- People try to paint the event as predictable after the fact
Taleb uses the rise of the internet and 9/11 as examples of Black Swans. He suggests that the goal shouldn’t be for society to become better at predicting Black Swan events, but to build more robust systems better able to weather them. The book’s popularity was partially due to Taleb identifying banks and trading firms as being particularly vulnerable to Black Swan events prior to the financial crisis.
In a recent interview with The New Yorker, Taleb stated that Covid-19 was not a Black Swan, since many prominent people like Bill Gates and author Laurie Garrett had long been sounding the alarm that such an event was predictable and we weren’t adequately prepared. Taleb clarified that a Black Swan isn’t just, “any bad thing that surprises us.” He explains a similar problem taking place—that too many people consulting bell curves are too focused on the fattest part of the curve and not concerned enough with the tails.
The takeaway is that our predictive models, even the simple ones in our heads, often over emphasize more probable outcomes and we willfully disregard other outcomes and their potential consequences, often because we don’t like them. The lesson here is that we can’t just guard against the last bad thing that happened, we need to prepare as best we can for any bad that could happen, even if it’s never happened before. That may sound difficult, but it’s mostly a matter of shifting your perspective. Don’t assume you know more than you do about the future, and ask yourself if you can do anything to improve your resilience today.