A mind is like a parachute
It might save your life,
but you have to know how to use it first.

Saturday, May 11, 2013

Is that a Black Swan or Just a Dark Grey One?

If transformative events that can't be predicted are Black Swans, what do you call the transformative events that some folks could see coming?  The tongue in cheek term "Grey Swan" has been applied to these events, and it is meant to acknowledge that these are not true Black Swan events, but they nevertheless deliver a surprising shock to the system.

The Credit Crunch of 2008 and the Great Recession that followed is sometimes called a Black Swan by folks who misunderstand the phrase.  This may be partially because it was the first earth shattering event that took place after the publication of Nassim Taleb's book.  But Taleb himself suggests the Credit Crunch was no Black Swan.  Many folks (including Taleb) saw the danger building in the financial system and had been warning about it for years.  It may have been a devastating and rare event, but it was not really out of the blue.

Still, when determining what qualifies as a Black Swan, we may run into problems, especially as technology gets increasingly sophisticated and communication gets increasingly powerful.  We already said that just because one nut-job fantasized about some event does not disqualify it from being a Black Swan because it would still be an inconceivable surprise to most people.  But what of the increasing reach of hypotheticals in our lives?  Could our increasing understanding of all the whacky things that can take place in our lives lead to a decrease in events that we would rightly describe as "inconceivable"?

For example if a huge asteroid hit the earth in 1820 and killed millions of people, it would have undoubtedly been a Black Swan.  But what if it happened in 2020?  Can we really say that this would be an inconceivable disaster?  The fact is that scientists have been spending the last couple of decades educating us about Earth's long history of being pummeled from space.  It would seem by our modern understanding that being hit with an asteroid is a when and not an if.  Still, if the asteroid were large enough, it would result in such a devastating chain of events for our planet that it seems disingenuous to deny the event Black Swan status.

If your concern is about the well being of people on a day to day basis, the distinction is not relevant.  If it changed our lives and our assumptions about our own safety on what has till now been a very hospitable planet, the event could be among the most significant in history.  But for strict score keeping about whether it is a Black Swan or merely a dark grey one, the distinction would probably boil down to how seriously the possibility of the event was being considered.  Since we have clever folks tracking extra terrestrial objects this very moment (an international project called "Spaceguard"), mapping out which ones pose risk for potential collision, one could say this event, however devastating when it does finally occur, is not technically a Black Swan.

There is one possibility for Black Swan status associated with such an event, and that is some repercussion from the collision that was not anticipated.  If the collision had some freak side effect that scientists would not have even considered (such as reversing the rotation of the planet) then the event would certainly be a Black Swan.  But a scientifically well behaved natural disaster, however horrible, does not generally qualify as a Black Swan.

The arrival of Europeans in what is now South America would be a good example of a Black Swan, at least to the Myans, Incas, and Aztecs (and all the lesser known native peoples of the time).  It was something that they never spent any time worrying about and it completely shattered their way of life.  The European discovery of the Western Hemisphere some 40 years earlier was also a Black Swan (to the Europeans).  Since Columbus was basically an idiot, he thought he had circled the globe.  The idea that there was a land mass as large as the Americas between Spain and India was, at least to most Europeans of the time, inconceivable.

The proof by circumnavigation that the Earth was round was not, however, a Black Swan.  Even though the popular myth is that Columbus' whacky idea was that the Earth was round, in fact that idea had been well established since the 3rd century BC.  Columbus big idea was that the best trade route to India was to sail West and keep going.

[Aside: The reason I say he was an idiot was that the curvature of the Earth was provable, and most reasonable people knew the approximate size of the Earth.  Columbus contended the Earth was much smaller than people believed and that is why he was convinced that a Western route to India was practical.  Even late in life he denied the science and theorized that the Earth may be shaped like a woman's breast, smaller around the nipple than the other parts.  Seriously, this guy was nuts.]

In any case, over the course of the next few decades, his voyage did prove to be the spark of two major Black Swans, first for the Europeans and later for the indigenous people of the "New World".

And not to belabor the point, but that is how a Black Swan works.  One morning you are waking up to live your normal life and the next morning you are dying of a wound inflicted by a Spanish musket ball and a man you never dreamed existed using a weapon you had never imagined.  Black Swans are not simple surprises, they are game changers.

Grey Swans and Conspiracy Theories

We have established that any "Swan", whether black or grey, is a transformation event.  The assassination of John F Kennedy could not rightly be considered a Black Swan.  The man had Secret Service protecting him precisely because it is dangerous to be President.  Granted the security detail was quaint by today's standards, but the point is that it was not "inconceivable" that a President could be assassinated.  Three sitting Presidents had been assassinated before JFK (Lincoln, Garfield, and McKinley) with McKinley's death being just 62 years earlier.  Sixty two years is not exactly recent, but for comparison it has already been 50 years since JFK's assassination.  In 1963 McKinley was still part of living memory for many people.  So, no, the assassination of a President would not be "inconceivable".

This does not mean that it was not nearly unthinkable however.  The world had changed a great deal in the two decades since WWII and no doubt many people would have assumed that the combination of good will in a prosperous nation and modern police methods had made it highly unlikely that a President would be assassinated.  In any case it was a national shock and certainly a transformational event.  Maybe it didn't change the way each American lived his daily life, but the killing, along with those of Bobby Kennedy and Martin Luther King Jr., certainly changed society.  On the color scale, though, the event would have to be called a Grey Swan. It was simply not inconceivable enough to qualify as truly Black.

The same thing could be said for the 9/11 attacks.  They stunned many Americans.  An early phrase that was used in the first day of reporting was "A New Pearl Harbor".  It was a surprise attack which set everyone on edge and permanently changed the way Americans think.  In terms of lasting daily impact, the hoops we must now jump through to travel on a plane seems the most far reaching, but the impact on the psychology of the nation is not to be underestimated.  It may be hard to quantify beyond bureaucratic and legal responses such as the formation of the Homeland Security Department and the passage of the PATRIOT Act, but the change to America was immediate and far reaching.

Still, even though the notion of hijacked planes being flown into buildings was stunning, it was not really inconceivable.  The 9/11 attacks were quickly accepted as real things that might happen in the modern world.  So 9/11 was not really a Black Swan either. Grey, of course, but not black.

But here is an interesting feature of these and other Grey Swan events:  There are some people who reject that they took place at all, at least in the way that they are commonly described.  To these people, the so called "conspiracy theorists" there was a certain inconceivability to these events.  The events are so tragic and so hard to wrap our minds around that some folks can not accept them.  These people seek answers beyond the common explanation because the truth (or what is commonly accepted as the truth) sounds very wrong to them.  There is no debate that these events are just as transformational to conspiracy theorists as they are to the rest of the world -- in some sense they may be more transformational to them -- but there is some real difference in how willingly they are accepted at face value.

And that is a key connection between Grey Swans and conspiracy theories.  The fact of the matter is that Grey Swans create fertile ground for conspiracy theories.  I have said before that big events with large impacts create instability and a need for order and that this quest for order is what drives the narrative of conspiracy theories.  Well, we now have a framework for understanding what these "big events" are.  They are Grey Swans -- sudden events generally considered to be highly unlikely even if plausible.  The inability to accept the plausibility of such transformational events may be key to unlocking the origin of the explanatory conspiracy theory.

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