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Thursday, April 09, 2009

Nobody knows anything

I won't pretend to have read Nassim Nicholas Taleb's book "The Black Swan: The Impact of the Highly Improbable" but I do like his Ten Principles for a Black Swan-proof World. I've got particular sympathy for his point that "complex derivatives need to be banned because nobody understands them and few are rational enough to know it". Just as the most important three words in a marriage are "you were right", the most important three words in business are the three you rarely hear - "I don't understand."

The area I work in doesn't have the potential to decimate your pension, even if it's really badly run, but nonetheless in my working life I've seen the media morph from a business whose processes were largely transparent to one that has grown increasingly opaque. For a couple of years after the widespread adoption of what was then known as Desk Top Technology I used to half-heartedly suggest that we set aside one day a year when we would put together a magazine in "the old way", just to reassure ourselves that we still knew how to do it. That seems ridiculous now. But what applies to business practices also applies to business models. For instance, I find it hard to believe that there is anyone at the top of any of our big media organisations who really understands how web advertising and marketing really works. I suspect they're glad that nobody ever asks them.

If Taleb is looking for an eleventh principle, I'd suggest a rather broader point. I use it to bore and occasionally encourage my children. It's this. "Cleverness is overrated."


  1. Synchronicity Theory:
    DH, you have just cheered me up at a very bleak moment, having been involved in an absurd discussion with an absurd man about what constitutes “common usage” in the English language. The absurdity was sharpened no end by the fact that said man does not speak English as his mother tongue.

    I have read large parts of Taleb’s book, but in the end it beat me. The only bit that I could really grasp was the bit you seem to have picked up immediately. One thing I would say about The Black Swan is that Taleb really needed someone of his understanding to edit the book. I can imagine people at the publishers pushing it around, saying – “You tell him. I’m not getting involved” – when it came not to what he was saying, but the way he was saying it.

    And cleverness? Overrated, indeed. I had no chance in the common usage argument with the non-native speaker – why? He’s a Communications Director.

  2. If you don't like The Black Swan, try his previous one Fooled by Randomness. I think they are pretty brilliant, close to a philosophy of living, and boy, does he think journalists are useless!