Tyler Cowen on The Black Swan

In Slate, Tyler Cowen reviews Nassim Taleb’s The Black Swan:

Before the discovery of Australia, it was generally assumed that swans were always white. Suddenly, black swans turned up, unsettling people’s expectations. In his new book, The Black Swan, Nassim Nicholas Taleb asks why this discovery seemed so surprising. And in response he argues that it is because we are hard-wired to find order in randomness, to turn scattered points into a coherent narrative, and to expect identified patterns to last forever. We become emboldened by our successes, and we think that we achieved control or at least can see what is coming next. The search for patterns and order can be a dangerous trap, distracting us from “the impact of the highly improbable,” to cite the book’s subtitle. Taleb, a long-standing financial analyst and investor, is the author of Fooled by Randomness, a book about our tendency to mistake luck for skill. In The Black Swan, he preaches a bracing sermon in favor of an angst-ridden, but socially beneficial, plunge into wrestling with the unknown.

The Black Swan works best as an advice book. In part, that’s because the unpredictable is most undervalued in our personal lives. Too many of us are caught up in routine, or a “status quo bias,” as it is labeled by economists and psychologists. We are afraid to move house or change jobs or even to imagine alternative paths. It is disquieting to think we might be making bad choices, so we close off options and we shut down self-critical reasoning, whether subconsciously or by active choice. For instance, we’re likely to buy certain commercial products simply because they are familiar and therefore comforting; that is why branding and advertising so influence consumers.