22 November 2008

The lesson of the black swan...

...is that the world is governed not by ordinary and predictable events but by extraordinary and unpredictable ones.

The asteroid that wiped out the dinosaurs is an example of a black swan. The Internet is a good black swan, the crash of '08 a bad one. Except for one or two eccentric cranks, no one saw it coming.

Another lesson of the black swan is that expertise is useless. No one has a clue why the markets have gone down so far, or whether they'll go down more, or how long it will really take for the world to absorb China's three-year backlog of refrigerators.

You might as well ask the nearest cab driver. And if he tells you, "God only knows," he's giving you a more honest answer than the well-paid people in good suits who have devoted their careers to analyzing these matters.

Yogi Berra was right when he said it's tough to make predictions, especially about the future.