adrian monck

Nassim Taleb’s Black Swan – a Turkey

I have just finished Nassim Taleb’s Black Swan. What a crock.

There is a lot wrong with Taleb’s book, not least the dismal neologism of the Black Swan. History is littered with less esoteric (i.e. banal) examples of Taleb’s restatements of the bleeding obvious – Montezuma’s reception of Cortes, anyone?

Still, let’s ignore the hackneyed theme and focus instead on one of the props Taleb employs to boost his word count – the narrative fallacy.

Taleb devotes a whole chapter to it (six), despite filling his book with irritating little “narratives” (parables, perhaps?).

He offers us the mundane insight that one of the ways we try and make sense of the world, and ourselves, is through telling stories. No, really! And guess what? These stories are unreliable means of predicting the future. Reading a couple of history books should set you straight. And you might learn more than Taleb has to offer.

So should we give up on story-telling? Don’t worry, Nassim hasn’t kicked the habit:

there may be a way to use a narrative – but for a good purpose. Only a diamond can cut a diamond; we can use our ability to convince with a story that conveys the right message…

The right message…

So, there you have it – the pathetic circular argument. Using “narrative” for “a good purpose” (can we not just call it preaching, and be done?) is fine as long as you are delivering (drum roll) … the right message!

Adrian Monck

14 responses to “Nassim Taleb’s Black Swan – a Turkey”

  1. Yep – it’s a stinker. Great marketing effort though. And he seems to have a rather large chip on his shoulder…

    Well done for making it to the end!

  2. I’ll leave it with you to apologise unreservedly to Mr Taleb for your (all too) obvious appreciation of systemic risk.
    ’nuff said

  4. You are very critical of the book. Your examples address issues of style, not substance. Currently we have an excellent example of the problem of misunderstanding risk management by financial institutions.

    Using narratives to explain narrative fallacy is not an oxymoron. Narratives are useful in education. What is important is that the narrative is just an explanation. The narrative helps to get a point across, but the narrative does not matter beyond its ability to explain. A bad narrative will mislead. In science, narratives will continually need to be updated to explain revised material. Narratives can also mislead when the metaphor is faulty. Clinging to the narrative is narrative fallacy. Giving more weight to the narrative, than to the material it is used to explain, is narrative fallacy. Mistaking the narrative for the material is narrative fallacy.

    You make it clear that you dislike the narratives he uses. You do not address the material being explained by the narratives.

  5. The search for certainty and the resultant dominance of the ego over the self has led many to the abyss without knowing their predicament.

    Taleb’s refreshing and vital truth is that certainty is a poor companion in out life’s journey and that the humility of living with ubiquitous uncertainty has a transformative power to transcend the need for knowledge and the ego’s wonderfully manufactured (and therefore temporary) illusion of certainty.

  8. Just read this post’s timing — early 2008. LOL how’d that turkey work out?

  9. The book is terrible. From not acknowledging Karl Popper as the originator of the Black Swan example to the rest of the dreadful exposition. If you ask me, Taleb probably got the idea from Colin McGinn’s Looking For A Black Swan …

    Incidentally, the idea that there will be present and future financial crises is what academics would call – a little patronizingly – trivial, hence not addressed in this post.

  10. I was surprised to see this old stuff resurrected. I think Adrian, that your world view is colored by your politics. As are mine. You don’t really address the substance of Taleb’s truths – that very successful money managers agree with. You are dealing with style and petty criticism. Sure, Taleb may not have been the first to connect chaos theory with the financial markets – or tries to – but his modern take was especially poignant given what is REALLY happening in the markets. In other words, Taleb is dealing with reality, which is otherwise known as “important.” According to Ayn Rand, another conservative rather hated by the left for obvious reasons. One is her question:

    What is important?

    Her answer: Reality.

    Somehow, my instincts tell me there is some truth to it.

    It is alike the response of a liberal pundit I spoke with who said Rand was a hypocrite because she lived on social security the last decade of her life. I explained that 1. SS is insurance that she was entitled to BECAUSE she paid into the fund her whole working life, and 2. her personal life has NOTHING to do with her ideas dealing with facts…

    Take our president who doesn’t live in reality; nor those who had voted for him.

    Numbers don’t lie. Neither do the markets.

    Nor do the millions of Americans who can’t find jobs or replace the value of their assets. They’ve – we’ve – been ruined. And Taleb explained why.

    Lastly, please unblock me from your SPAM. My answer to you via regular email was blocked.

    Andrew

  11. If you over-simplify the book, you can probably even find ways to blame Nassim Taleb for the current financial mess.

    If you read the book, you will find that he presents specific examples of excessive risk to the people taking these risks. As you ignore the message of this book, they ignored his message.

    You seem to take the approach of alternative medicine pushers – criticizing medicine as fatally flawed for any slight imperfection. Nothing is perfect.

    This is an excellent explanation of the way that banking crises repeat.

    Taleb is describing an error that people will continue to repeat. He is not saying that this is completely original. He even provides footnotes to help you find the original material.

    If Taleb did not spend much time on Karl Popper in The Black Swan, he did in fooled By Randomness, which was written before The Black Swan.

    .

  12. Taleb’s attempts to formalize his thoughts are scattered far and wide but represent an astonishingly low citation to download ratio. In Taleb’s case, few have been able to build upon what he has to say and nobody has been able to to so in a technical sense. The reason is simple: Taleb doesn’t make sense.

    True, many have quoted Taleb, referred to him in general terms, or intimated that there is some underpinning theory – and this vague anti-probability bandwagon is one of the more surprising post-crisis phenomena. But the element of surprise isn’t always enough. By necessity this populist crusade is a comedic battle pitched between important sounding prose and the terse but plainspoken language of mathematics: a verbal assault on one of the great abstract constructions, its relevance to the real world, and its role in financial calamity. Or if you prefer sporting analogies, recall the image of gymnast Brian Meeker overstepping the springboard and ploughing headlong into the pommel horse.

    http://quantapology.blogspot.com/2011/10/fuck-off-you-pelican-congress-shouldnt.html

    • Quant,

      You make a bunch of claims, but do not provide any evidence. Are you trying to provide a contrast?

      You claim that Taleb is anti-probability, but Taleb is actually the one who is pointing out the ways in which we ignore probability.

      .

  13. I think that Taleb’s critics miss what can be stated simply, as in K.I.S.S.

    Shiite happens even on a Sunni day.