5 ms·

"Nassim Nicholas Taleb is “irritated,” he told Bloomberg Television on March 31st, whenever the coronavirus pandemic is referred to as a “black swan,” the term

by pella 6y ago

"Nassim Nicholas Taleb is “irritated,” he told Bloomberg Television on March 31st, whenever the coronavirus pandemic is referred to as a “black swan,” the term he coined for an unpredictable, rare, catastrophic event, in his best-selling 2007 book of that title. “The Black Swan” was meant to explain why, in a networked world, we need to change business practices and social norms—not, as he recently told me, to provide “a cliché for any bad thing that surprises us.” Besides, the pandemic was wholly predictable—he, like Bill Gates, Laurie Garrett, and others, had predicted it—a white swan if ever there was one. “We issued our warning that, effectively, you should kill it in the egg,” Taleb told Bloomberg. Governments “did not want to spend pennies in January; now they are going to spend trillions.” read more : NewYorker:"The Pandemic Isn’t a Black Swan but a Portent of a More Fragile Global System" ( April 21, 2020 ) https://www.newyorker.com/news/daily-comment/the-pandemic-isnt-a-black-swan-but-a-portent-of-a-more-fragile-global-system https://www.newyorker.com/news/daily-comment/the-pandemic-is...

notahacker 6y ago
Have to say I'm struggling to see the difference between the pandemic and the financial crisis. Both were utterly predictable as things which could happen but difficult to time [if anything, the financial crisis was much more predictable] and both were exacerbated because systems and economies were built around assuming such scenarios were unlikely in the immediate future and inherently self-limiting
- PoachedSausage 6y ago
  I don't see much difference either. Maybe one factor in something being a Black Swan is just how widely or not the predictions are believed. There were plenty of whisperings on the internet about a potential problem with sub-prime mortgages way before 2007. I even had a lecturer at university talking about Kondratiev waves[0] and how we were possibly nearing the end of one. [0]https://en.wikipedia.org/wiki/Kondratiev_wave https://en.wikipedia.org/wiki/Kondratiev_wave
- retube 6y ago
  agreed
- quicklime 6y ago
  Given the quote talks about spending money in January, I believe it’s referring to testing and contact tracing (and manufacturing PPE). If this had been done early on, it would’ve been easy to time outbreaks, and we could’ve had more targeted lockdowns.
- strgcmc 6y ago
  Not to fully justify it myself (I'm not sure I believe it either), but more to provide a devil's advocate perspective: - A key part of the financial crisis is that, collectively the group of auditors and risk evaluators and experts who are supposed to understand/evaluate/quantify risk, generally failed to properly price in the risk of mortgage-backed securities failing en masse (they basically said, the chance of this happening is astronomically low, and were wrong by many orders of magnitude). Taleb's point was that, for certain events, it is surprisingly difficult to accurately assess their true probability, and even very advanced, highly-paid experts (with a strong vested interest in getting it right), can fail (and fail spectacularly). One of the lessons here is, to not place too much mis-placed confidence in certain kinds of estimates, and to be skeptical of gambling on certain probabilities which are fundamentally non-verifiable or hard to verify (even though they might look like regular probabilities and come packaged with lots of nice documentation and fancy equations and backed by lots of PhDs who tell you how wonderful their models are... we still need to be skeptical). When the weatherman tells you there's a 40% chance of rain, you can be sure that even though he might be wrong, he is very unlikely to be wrong by orders of magnitude (i.e. that the actual chance of rain is 4% or 0.004% or 100%); when a quant at an investment bank tells you that a AAA-rated MBS will fail with probability 0.00001%, you probably shouldn't trust that number in the same way, even though both are probabilities and both come with models and equations to support them. - With COVID-19 and pandemics in general, it's not clear that the relevant public health experts failed to price in the risk or to accurately estimate/approximate the risk. What seems more likely is that our governments and businesses failed to heed their advice (i.e. that pandemics are inevitable, that they will happen with some regularity e.g. every 10-30 years, that in a globally connected world they will spread more rapidly than ever, etc.), and failed to act on the advice they were given (or in the case of the US, almost literally threw out the pandemic response handbook and ignored it). This makes it less of a "black swan" problem, and more of a regular (though still spectacular) failure of governance. I might argue however that, there is perhaps a general tendency to incorrectly categorize such things as "black swan" events, which is an interesting phenomenon in and of its own (i.e. why do people want to take white swans and paint them black or to simply pretend as if they were black when they are not).
bartread 6y ago
> Governments “did not want to spend pennies in January; now they are going to spend trillions” Based in the UK here, and this is what I find particularly galling. If governments, including ours, had imposed travel restrictions in January people would have kicked up about it, and the travel industry would have been slammed, but thousands of lives would have been saved, and we would not now be in our deepest economic slump in over 40 years. Sadly, as with various other countries, it's hard to avoid the conclusion that the people at the highest levels of government and civil service here are utterly incompetent[1]. [1] Yes, I know their jobs are incredibly difficult but, as pointed out already, this was an entirely predictable set of circumstances. This is also not a partisan comment: our Conservative government have done an extremely poor job, but the Labour party are so useless they handed the them an easy landslide at the last general election, and the Lib Dems aren't even worth the bother of talking about.
- Angostura 6y ago
  > Sadly, as with various other countries, it's hard to avoid the conclusion that... ... hindsight is 20/20. Nobody was suggesting travel restrictions in January.
  - bartread 6y ago
    I get that, but that's sort of the point, and in the UK we didn't do anything of substance until the end of March, which was far too late. On 28th January I organised a DR drill, where everyone in our Cambridge office plus others in tech from other offices worked from home. This ran on 5th February. A week or two later I unofficially asked everyone on my team to stop all travel between offices, and requested key stakeholders not visit us in Cambridge. This was officially confirmed company-wide at the beginning of March. We shut all our offices and required all staff to work from home full-time 10 days before the government mandated lockdown began. I'm not even holding this up as "we did a great job" because we were far too slow to act ourselves, but it's certainly not just 20/20 hindsight. I hear that trope far too often, and it's tiresome. I jolly well expect everyone in positions of leadership (including me) to have learned lessons from these events and do much better and act much more quickly next time around. Again, let me reiterate that this situation was entirely predictable, and in fact was predicted by numerous experts, including Bill Gates.

by pella 6y ago

notahacker 6y ago

Have to say I'm struggling to see the difference between the pandemic and the financial crisis. Both were utterly predictable as things which could happen but difficult to time [if anything, the financial crisis was much more predictable] and both were exacerbated because systems and economies were built around assuming such scenarios were unlikely in the immediate future and inherently self-limiting

PoachedSausage 6y ago
I don't see much difference either. Maybe one factor in something being a Black Swan is just how widely or not the predictions are believed. There were plenty of whisperings on the internet about a potential problem with sub-prime mortgages way before 2007. I even had a lecturer at university talking about Kondratiev waves[0] and how we were possibly nearing the end of one. [0]https://en.wikipedia.org/wiki/Kondratiev_wave https://en.wikipedia.org/wiki/Kondratiev_wave
retube 6y ago
agreed
quicklime 6y ago
Given the quote talks about spending money in January, I believe it’s referring to testing and contact tracing (and manufacturing PPE). If this had been done early on, it would’ve been easy to time outbreaks, and we could’ve had more targeted lockdowns.
strgcmc 6y ago
Not to fully justify it myself (I'm not sure I believe it either), but more to provide a devil's advocate perspective: - A key part of the financial crisis is that, collectively the group of auditors and risk evaluators and experts who are supposed to understand/evaluate/quantify risk, generally failed to properly price in the risk of mortgage-backed securities failing en masse (they basically said, the chance of this happening is astronomically low, and were wrong by many orders of magnitude). Taleb's point was that, for certain events, it is surprisingly difficult to accurately assess their true probability, and even very advanced, highly-paid experts (with a strong vested interest in getting it right), can fail (and fail spectacularly). One of the lessons here is, to not place too much mis-placed confidence in certain kinds of estimates, and to be skeptical of gambling on certain probabilities which are fundamentally non-verifiable or hard to verify (even though they might look like regular probabilities and come packaged with lots of nice documentation and fancy equations and backed by lots of PhDs who tell you how wonderful their models are... we still need to be skeptical). When the weatherman tells you there's a 40% chance of rain, you can be sure that even though he might be wrong, he is very unlikely to be wrong by orders of magnitude (i.e. that the actual chance of rain is 4% or 0.004% or 100%); when a quant at an investment bank tells you that a AAA-rated MBS will fail with probability 0.00001%, you probably shouldn't trust that number in the same way, even though both are probabilities and both come with models and equations to support them. - With COVID-19 and pandemics in general, it's not clear that the relevant public health experts failed to price in the risk or to accurately estimate/approximate the risk. What seems more likely is that our governments and businesses failed to heed their advice (i.e. that pandemics are inevitable, that they will happen with some regularity e.g. every 10-30 years, that in a globally connected world they will spread more rapidly than ever, etc.), and failed to act on the advice they were given (or in the case of the US, almost literally threw out the pandemic response handbook and ignored it). This makes it less of a "black swan" problem, and more of a regular (though still spectacular) failure of governance. I might argue however that, there is perhaps a general tendency to incorrectly categorize such things as "black swan" events, which is an interesting phenomenon in and of its own (i.e. why do people want to take white swans and paint them black or to simply pretend as if they were black when they are not).

bartread 6y ago

> Governments “did not want to spend pennies in January; now they are going to spend trillions” Based in the UK here, and this is what I find particularly galling. If governments, including ours, had imposed travel restrictions in January people would have kicked up about it, and the travel industry would have been slammed, but thousands of lives would have been saved, and we would not now be in our deepest economic slump in over 40 years. Sadly, as with various other countries, it's hard to avoid the conclusion that the people at the highest levels of government and civil service here are utterly incompetent[1]. [1] Yes, I know their jobs are incredibly difficult but, as pointed out already, this was an entirely predictable set of circumstances. This is also not a partisan comment: our Conservative government have done an extremely poor job, but the Labour party are so useless they handed the them an easy landslide at the last general election, and the Lib Dems aren't even worth the bother of talking about.

Angostura 6y ago
> Sadly, as with various other countries, it's hard to avoid the conclusion that... ... hindsight is 20/20. Nobody was suggesting travel restrictions in January.
- bartread 6y ago
  I get that, but that's sort of the point, and in the UK we didn't do anything of substance until the end of March, which was far too late. On 28th January I organised a DR drill, where everyone in our Cambridge office plus others in tech from other offices worked from home. This ran on 5th February. A week or two later I unofficially asked everyone on my team to stop all travel between offices, and requested key stakeholders not visit us in Cambridge. This was officially confirmed company-wide at the beginning of March. We shut all our offices and required all staff to work from home full-time 10 days before the government mandated lockdown began. I'm not even holding this up as "we did a great job" because we were far too slow to act ourselves, but it's certainly not just 20/20 hindsight. I hear that trope far too often, and it's tiresome. I jolly well expect everyone in positions of leadership (including me) to have learned lessons from these events and do much better and act much more quickly next time around. Again, let me reiterate that this situation was entirely predictable, and in fact was predicted by numerous experts, including Bill Gates.