TRUSTING MOST FORECASTERS
AND MOST FORECASTING TODAY IS LIKE BELIEVING IN THE TOOTH FAIRY

The dolphinthinker understands that humans sail highest and farthest under the flag of abundance even though, for many, scarcity is too often the transport du jour. For this reason alone, it has never more important to find out what isn’t working, fix what is broken and opt for the solutions, conditions, synergies and alliances that dolphinthinking can bring. Yet, as the imitable Yogi Berra cautions us, “It’s tough to make predictions, especially about the future.”

For my money, some of the best insights on all this have come from the swashbuckling intellectual trader/philosopher, Nassim Nicholas Taleb, who in any number of ways is a superb example of dolphinthinking. You can find many provocative, idol-breaking ideas in his books, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets, The Black Swan: The Impact of the Highly Improbable and Antifragile: Things That Gain from Disorder. We believe that he’s spot on with most all of his criticisms of the consequences we face from having lived so long in the shadows and under the influence of (in our dolphinthink terminology) “the Certainty Attractor.”

If you have read The Black Swan, you will remember that a Black Swan is Taleb’s metaphorical name for an event that comes wrapped in uncertainty. (It is named after the rare black swan of the bird world, thought not to exist for centuries until it was finally spotted in Australia.) More specifically, to be one of Taleb’s electrifying Black Swan events, a happening must (1) Be an outlier—something nobody was expecting. (2) Have extreme impact; it must truly shake things up. Finally, (3) be something that we (humans being humans) rush belatedly to make “explainable and predictable”—concocting explanations for its occurrence after it happens.

In his book, Taleb labels such events as the rise of the Internet, the invention and spread of the personal computer, World War I and 9/11 as being Black Swans. To that list, the argument can be made that the Indian Ocean tsunami, hurricane Katrina, the Haiti earthquake, the Eyjafjallajoekull volcano eruption and the BP oil spill not to mention the Lehman Brothers bankruptcy, the subprime mortgage crisis and late-2000s mega-recession and the following European sovereign debt crisis should be added (although it isn’t always crystal clear that Taleb’s required triplet of rarity, extreme impact and retrospective predictability is satisfied by each of these).

Taleb observes:

A small number of Black Swans explain almost everything in our world, from the success of ideas and religions, to the dynamics of historical events, to elements of our own personal lives. Ever since we left the Pleistocene, some ten millennia ago, the effect of these Black Swans has been increasing. It started accelerating during the industrial revolution, as the world started getting more complicated, while ordinary events, the ones we study and discuss and try to predict from reading the newspapers, have become increasingly inconsequential…. The central idea of this book concerns our blindness with respect to randomness, particularly the large deviations [the Black Swans]. Why do we, scientists or nonscientists, hotshots or regular Joes, tend to see the pennies instead of the dollars? Why do we keep focusing on the minutiae, not the possible significant large events, in spite of the obvious evidence of their huge influence?

With uncertainty coming at us at ever greater speeds, Taleb wants us to be aware of the lessons available to us from our new understandings about uncertainty. Some of the things he wants us to acknowledge and act on are these (although the words that follow are not necessarily his exact words):

• Our vaunted forecasting tools aren’t very dependable at predicting uncertainty in the real world. Usually, they don’t work any better than astrology.

• What you know often tends not to hurt you. (If you know something is likely, you can take precautions.)

• What you don’t know, and what nobody else does either, is where “the next big killing” lies. It will come from where almost no one is looking.

• Our inability to predict “outliers” (Black Swans) means we can neither predict historical events nor change the course of history. (And yet, we don’t even bother to notice the magnitude of our forecasting errors.)

• Wars are fundamentally unpredictable, and we don’t notice that either.

• The best way to protect yourself from Black Swans is antiknowledge—positioning yourself to benefit from what you don’t know and you may not even know that you don’t know.

• The future is going to be increasingly less predictable. And both our own “human nature” and the nature of many so-called experts in the knowledge professions are going to continue to try and hide this from us.

There’s one question that is never far from Nassim Nicholas Taleb’s awareness in his brilliant “rewrite” of how the world of human knowing actually works and how much knowing we can depend on. How do we deal halfway intelligently with the fact that we live on such an ever-changing, ever-surprising slippery slope of reality? Especially when our own brain is designed to convince us of just the opposite. And especially now that we are moving ever-faster under the aegis of the Anti-Certainty Attractor, all at a time when our worldviews, systems, cultures, institutions, leaders and most of our brain programming has been designed and perfected to deal with the consequences of the Certainty Attractor?

More than any other question, this is the issue that has given rise to the entire dolphinthinker model. I brought that question to the research and writing of my latest book, LEAP! How to Think Like a Dolphin & Do the Next Right, Smart Thing Come Hell or High Water. And I’ll be honest with you: it is a question that the human species is going to be grappling with long after books like mine are forgotten. But it is also a question that we dare not ignore. We will learn to deal better with the Anti-Certainty Attractor issue or we’ll pay dearly and often for our neglect in the hours, days and years immediately ahead.

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21 Comments

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