Why do things that once seemed unimaginable become, in hindsight, completely obvious? Why, in turn, do we believe what the experts predict when they're often off the mark? Nassim Nicholas Taleb, author of The Black Swan: The Impact of the Highly Improbable, talks to Jean about why we ignore the generalities of the world instead of focusing on the specifics.
Nassim says his metaphor of the black swan is based on the ancient belief that all swans were white—until the then-astonishing discovery of a black one. Thus, the black swan theory represents what is possible. Nassim says recent examples of such "black swans" are the September 11 terrorist attacks and the popularity of the Internet search engine Google. "Once you see one, you learn to expect to see it," Nassim says. After seeing it for yourself, he says, you find reasons to explain the occurrence. "We have to weave a narrative because our brains cannot accept the uncertainty of the world."
That lack of acceptance leads to incorrect and uninformed beliefs, Nassim says. "It's easier to produce a theory, even if it's wrong, than to accept no theory," he says. "It takes a lot more courage to say, 'I don't know.'"
These incorrect theories can lead to problems in areas where the expert is no expert, and their ability to predict outcomes is tenuous at best. Nassim says that so-called experts are not markedly better at predicting economic variables than a random observer with minimal knowledge of facts. But, if you listen to the expert, you're more likely to take risks. "My rule is, if the expert wears a suit and doesn't have to wear a suit, don't listen to him," Nassim says. He says such people, "pseudo-experts," dress up their stories to camouflage the wedge between what they know and what they think they know.