Black Swans

I started reading Nassim Nicholas Taleb’s The Black Swan today— it’s probably the most enjoyable non-fiction I’ve read in a long time. In the first paragraph of the book Taleb does an excellent job of summarizing his theory, with a historical example:

[pullquote]Before the discovery of Australia, people in the Old World were convinced that all swans were white, an unassailable belief as it seemed completely confirmed by empirical evidence. The sighting of the first black swan might have been an interesting surprise for a few ornithologists (and others extremely concerned with the colorings of birds), but that is not where the significance of the story lies. It illustrates a severe limitation to our learning from observations or experience and the fragility of our knowledge.One single observation can invalidate a general statement derived from millennia of confirmatory sightings of millions of white swans. All you need is one single (and, I am told, quite ugly) black bird.[/pullquote]

I’m really enjoying how unimpressed he is by Plato, and Platonicity: “mistaking the map for the territory,” as he calls it.

[pullquote]The Platonic Fold is the explosive boundary where the Platonic mindset enters in contact with messy reality, where the gap between what you know and what you think you know becomes dangerously wide. It is here that the Black Swan is produced.[/pullquote]

Because (by definition) a Black Swan can only occur outside of the realm of expectation, reducing the observable world into Platonic forms implies full predictability of future events— as soon as something comes along that doesn’t fit the form, you have a Black Swan.

I’ll leave you with one more criticism of Platonism/categorization:

[pullquote]If you want to see what I mean by the arbitrariness of categories, check the situation of polarized politics. The next time a Martian visits earth, try to explain to him why those who favor allowing the elimination of a fetus in the mother’s womb also oppose capital punishment. Or try to explain to him why those who support abortion are supposed to be favorable to high taxation but against a strong military. Why do those who prefer sexual freedom need to be against individual economic liberty?[/pullquote]

Micheal Lewis on the Greek Financial Crisis

[pullquote]The tsunami of cheap credit that rolled across the planet between 2002 and 2007 has just now created a new opportunity for travel: financial-disaster tourism. The credit wasn’t just money, it was temptation. It offered entire societies the chance to reveal aspects of their characters they could not normally afford to indulge. Entire countries were told, “The lights are out, you can do whatever you want to do and no one will ever know.” What they wanted to do with money in the dark varied. Americans wanted to own homes far larger than they could afford, and to allow the strong to exploit the weak. Icelanders wanted to stop fishing and become investment bankers, and to allow their alpha males to reveal a theretofore suppressed megalomania. The Germans wanted to be even more German; the Irish wanted to stop being Irish. All these different societies were touched by the same event, but each responded to it in its own peculiar way.[/pullquote]

Financial-disaster tourism. Sounds right up my alley.

-via Vanity Fair

Artists Make More Money in the File-Sharing Age

Norwegian School of Management students Anders Sørbo and Richard Bjerkøe recently published a thorough look at the impact the digitization (and inherent piracy) of music has had on the incomes of artists in Norway. The results are very interesting.

[pullquote]In the same period when the overall revenues of the industry grew by only 4%, the revenue for artists alone more than doubled with an increase of 114%. After an inflation adjustment, artist revenue went up from 255 million in 1999 to 545 million kronor in 2009.[/pullquote]

-Via TorrentFreak