An Epicurean Skeptic Assesses the Swan Pool of Life

THE BLACK SWAN: THE IMPACT OF THE HIGHLY IMPROBABLE
By Nassim Nicholas Taleb
Random House, 366 pages, $26.95

Nassim Taleb knows the good life: weekends in Venice, excellent wine, helicopter-flying lessons and a host of other luxuries that are easy to afford if, like him, you’re the founder of a private investment firm. In his latest, often autobiographical book, The Black Swan, he poses as a contemplative bon vivant. But Mr. Taleb is no Epicurean. He is a Skeptic, and he thinks a dose of his philosophy can make you, too, a bit wiser, a bit richer and maybe even a bit more debonair.

What Mr. Taleb knows best is financial markets. Or, rather, he knows that he doesn’t know them. During his career on Wall Street, he made a name for himself by developing an elaborate theory of risk management predicated on the assumption that one simply could not reliably predict the behavior of stocks. Recently, he’s begun to apply his trading philosophy to broader subjects, clearing a niche for himself as a critic of certainty in all its forms. His first book, Fooled by Randomness (2001), argued that much of what we attribute to skill—whether it’s business success, political office or literary stardom—is usually more the result of dumb luck.

Now he’s back with a fresh bundle of insights into human ignorance. The black swan is an old chestnut in philosophic circles, dating back to the 18th century, when the discovery of a real black swan in Australia disproved the long-held belief that all swans were white. In Mr. Taleb’s variation, the black swan is a cataclysmic event that can’t be predicted—though we later may say we should have seen it coming. Sept. 11 was a black swan; so was the meteoric rise of Harry Potter. We’re wired, he argues, to expect that the future will look like the past, and to discount the possibility of the unknown—sometimes with catastrophic effects.

As Mr. Taleb sees it, “our world is dominated by the extreme, the unknown, and the very improbable.” It’s time we started treating the unexpected as “a starting point,” not “an exception to be pushed under the rug”—especially because black swans seem to be multiplying. Technology and scientific progress promote an illusion of control over fortune. And as our economies, politics and communications become more interconnected, the impact of big events is getting bigger.

Mr. Taleb is on to something here, and it would be nice if he argued the point more systematically. But sustained argument is not his style. He prefers urbane, learned digressions, ranging from his beloved skeptics (Karl Popper, David Hume and Sextus Empiricus are his favorites) to historiography, pithy thought experiments and the treacheries of the bell curve. These set pieces are always sprightly, sometimes brilliant, but ultimately repetitive. Rather than build on one another, they articulate, again and again, a single thesis: Expect the unexpected.

By his own admission, Mr. Taleb is a “single-idea” man. But it’s an intriguing idea, and so armed, he makes serious philosophical and mathematical concepts accessible and relevant. Better yet, he gives these ideas a classy aesthetic. Wearing deep thoughts, Mr. Taleb wants to look chic. And he does.

Justin Reynolds is a Fellow at the Center for the Study of the Presidency in Washington, D.C.

An Epicurean Skeptic Assesses the Swan Pool of Life