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Richards Reviews Black Swan

Dr. Chet Richards gives his take links to a review by Robert D. Brown III. on The Black Swan: The Impact of the Highly Improbable ( my apologies to Mr. Brown):

The Black Swan: The Impact of the Highly Improbable

The scandalous malpractice, as Taleb shouts, is that the rules that apply to Mediocristan are too often misappropriated to understand and manage systems that don’t obey such laws, often at the expense of lives and immense fortunes. The most pointed cases involve applications of options and modern portfolio theory in which billions of dollars of investors’ fortunes are lost by the malpractice of Nobel “intellectuals” who should know better (anyone remember the tragedy of the Amaranth fund or the trading company Long-Term Capital Management?); the poignant disaster of the unsinkable Titanic; the current woes of Bear Stearns and the sub-prime lending industry; and, in Taleb’s case, the decade and a half long civil war in his centuries-long peaceful Lebanon, a war that he and all too many others sadly believed would end soon after it started.

How does understanding the black swan inform our understanding of maneuver conflict? Consider the martial arts version of the Ludic Fallacy offered by Mark Spitznagel.

Organized competitive fighting trains the athlete to focus on the game and, in order not to dissipate his concentration, to ignore the possibility of what is not specifically allowed by the rules, such as kicks to the groin, a surprise knife, et cetera. So those who win the gold medal might be precisely those who will be most vulnerable in real life. (Black Swan, pg. 127)

John Boyd leads us to understand that conflict is often a non-cooperative contest for limited resources by novelty generating agents. Novelty is the black swan of conflict. When we become convinced that our side will win on the basis of strength or numbers, when we believe that the other side will follow our rules of engagement, we will be exposed to cruel novelty. This is precisely what Chet Richards describes as a disease of orientation called fixation: “…attachments to appearances, conclusions, institutional positions, dogmas, ideologies – pretty much anything that keeps the people inside the organization from recognizing that the world is changing or being changed by competitors.”

2 Responses to “Richards Reviews Black Swan”

  1. robertdbrowniii Says:

    Thanks, zen.  I appreciate the commendation and the link.  I enjoy your site as well.

  2. zen Says:

    Hi Robert,
    Excellent review on your part. I am enjoying the section in Black Swan on "silent evidence" at present

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