Was Covid-19 A Black Swan Event? Or As Nassim Taleb Insists, A White Swan?
Nassim Taleb famously came out very early during the pandemic to proclaim that Covid-19 was in fact a ‘White Swan’ and not the Black Swan people insisted it be categorised. Taleb complained that the Black Swan diagnoses had become a cliche for pretty much any bad event. Just because something unexpected happens doesn’t make it a Black Swan.
There are specific hallmarks that define a Black Swan. Does Covid-19 fit all of them?
- They are an extreme event. 9/11, Coronavirus, 2004 Indonesian Tsunami…
- They have an extreme impact. Colonisation of Latin America, the invention of Penicillin…
- They are only explicable after the fact. The election of Donald Trump, the catalyst of WW1 (28/7-1914)
The Nassim Taleb & Incerto Podcast
The Problem Of Predicting Future Events
“There are great inconsistencies at trying to predict the future given knowledge of the past”Nassim Taleb
As much as we think we otherwise, we are incompetent at predicting future events.
People are pricing oil seasons in advance as a heuristic variable to an investment. Meanwhile, in reality, we consistently can’t even get tomorrow mornings price right.
The point of the Black Swan is realising that just because something has never happened is not evidence that it can never happen.
If you lived in New York on the 10th of September 2001, you had no idea how much your life was going to change the following day.
So, Whilst the Covid-19 pandemic is not your traditional completely unforeseen Black Swan event, there are elements of the Black Swan to this virus.
Was Covid-19 A Black Swan?
It is an extreme event (whether that be unholy between a penguin and bat, or an accident or otherwise leak from a lab) and it has clearly made an extreme impact making 2020 one of the most significant years in memory. However, is covid-19 only explicable after the fact?
This is where I think Taleb corrects the masses in asserting this is not a black swan event.
6 years ago, Bill Gates, of unfairly characterised as enemy of the people fame, made a ted talk pretty much play booking exactly what a pandemic virus would look like from transmissibility, death rate and what the effect would be on society, government and the economy. So how explicable is a pandemic virus in hindsight? Pretty much the same as we look into the future to whatever the next virus is.
You can make the argument that any virus that is truly a pandemic is always only going to be explicable in hindsight. Which is the say we might know the ingredients of the next pandemic but we won’t know where it will spawn, how contagious it will be? When it will spawn? All of these unknowns in the future of infinite possibilities exist.
So technically, everything will always only be explicable after the fact, but that shit gets nihilistic quickly and also rather semantic and boring. When it happened, how it happened, the effect it had, the timeline. All of this is always only explicable in hindsight.
Finally, Taleb Defining The Coronavirus As A White Swan.
So I agree with Taleb. Covid is not a Black Swan equivalent to something like 9/11 or when Hernan Cortes breached the ports of Veracruz or The khans sacking Kabul, etc.
It fulfils two out of the three hallmarks that define a Black Swan event.
- Covid-19 had an outsized impact – clearly.
- Covid-19 is an extreme event – clearly.
- Covid-19 is only explicable in hindsight – I think not.
White Swan event.
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