The Black Swan of Cairo

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Contributors

Ferdi, Iris, Kees Notenboom

Authors: N. N. Taleb, M. Blyth

Publication Year: 2011

Source: http://www.heinonline.org/HOL/Page?handle=hein.journals/fora90&collection=journals&set_as_cursor=0&men_tab=srchresults439&id=439

Journal: Asian Affairs

Title: The Black Swan of Cairo

Categories: Information Management


Abstract

Surprise seems a recurring condition for the U.S. political and economic elite. The authors illustrate this with the implosion of the global financial system and the Middle East turmoil. They make clear that the suppression of normal volatility invokes out-of-sight high risks. Political and economic leaders tend to stabilize their systems by inhibiting fluctuations; the result tends to be the opposite. Their actions only lead to deferring a crisis. And the longer it takes for the blowup to occur, the worse the results are. There is also a tendency to blame the wrong factors: failing intelligence, failing political and financial interventions etc. Ultimately the system is responsible, not the components or the last visible factor leading to a collapse. They make a plea to stop intervening, as well as to stop blaming; because collapses are inherent to complex systems. What is needed is a system that can limit the harm done, not one that tries to eliminate flaws. Humans must try to resist the illusion of control and of prediction. At the end they state: “… there is no freedom without noise –and no stability without volatility.”

Contributors

Ferdi, Iris, Kees Notenboom