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The Black Swan
The Impact of the Highly Improbable
- Read in 15 minutes
- Audio & text available
- Contains 9 key ideas
The Black Swan (2010) offers insights into perceived randomness and the limitations we face in making predictions. Our over-reliance on methods that appeal to our intuition at the expense of accuracy, our basic inability to understand and define randomness, and even our biology itself all contribute to poor decision making, and sometimes to “Black Swans” – events thought to be impossible that redefine our understanding of the world.
Key idea 1 of 9
“Black Swans” are events thought to lie outside the realm of possibility, and yet happen anyway.
As human beings, we are particularly good at turning all of the stimuli from our environment into meaningful information. This is a talent that has allowed us to create the scientific method, philosophize about the nature of being and invent complex mathematical models.
But just because we’re able to reflect on and order the world around us doesn’t necessarily mean we’re very good at it.
For one thing, we’re inclined to be narrow-minded in our beliefs about the world. Once we have an idea about how the world functions, we tend to cling to it.
But because human knowledge is constantly growing and evolving, this dogmatic approach makes no sense. Just two-hundred years ago, for example, doctors and scientists were supremely confident in their knowledge of medicine, yet today their confidence seems ludicrous: just imagine going to your doctor complaining of a common cold, and being given a prescription for snakes and leeches!
Being dogmatic about our beliefs makes us blind to those concepts that fall outside the paradigms we’ve already accepted as true. How, for example, is it possible to understand medicine if you’re not aware that germs exist? You might come up with a sensible explanation for illness but it will be flawed by a lack of crucial information.
This kind of dogmatic thinking can result in huge surprises. We’re sometimes surprised by events not because they’re random, but because our outlook is too narrow. Such surprises are known as “Black Swans,” and they can prompt us to fundamentally reconsider our worldview:
Before anyone had ever seen a black swan, people assumed that all swans were white. Because of this, all their depictions and imaginations of the swan were white, meaning that white was an essential part of “swanness.” So, when they discovered their first black swan, this fundamentally transformed their understanding of what a swan could be.
As you’ll see, Black Swans can be as trivial as learning that not all swans are white, or as life-changing as losing everything because of a stock market crash.