What is a Black Swan event?
Necessary and sufficient conditions
|Jørgen Veisdal||Sep 6, 2019|
“Why is surprise the permanent condition of the political and economic elite?”
The above (somewhat abbreviated) question is how Nassim Taleb and author Mark Blyth open their essay The Black Swan of Cairo, published in the May/June issue of Foreign Affairs in 2011. The essay takes note of the then-recent turmoil in Egypt, Tunisia and Libya (now know as “the Arab spring”), where suddenly and seemingly out of nowhere, highly suppressive political regimes came tumbling down. The essay describes the 2011 events as prototypical examples of what happens when complex systems that have been artificially suppressing volatility “become fragile, while at the same time exhibiting no visible risks”. Taleb in particular made his career by describing such “black swan” events, which quote, “come as a surprise”, “have a major effect”, and “are often inappropriately rationalized after the fact with the benefit of hindsight” (Taleb and Blyth, 2011). Continue reading