History is there to become a lesson for humans to not
repeat the same mistake and learn from their successes.
The fact is that no success can be repeated a second
time because that would be copyright infringement.
What is even worse is that we have to learn
from past incidents, major financial crisis,
and disasters that put the economy on halt while sending half of
the mass into a panic state and the other half out on the street.
Experts in economics and financial analysts, as well as historians,
combine their opinions into explaining why those things happened.
Those reasons gave birth to people who think that there are so
many ways for the people to avoid the crisis and yet, here we are.
“Let’s learn from our mistake” is what they believed to be
the right way and until today, it’s what we are still doing.
We think that the people of that time were blinded by greed, by the comfort
of their home and peace that they could not see the impending danger.
We think that people were so locked onto their current state; they
did not see the potential of computer and the internet of things.
We bring our current thinking process that is
not that of the live observer but as someone
who sees things from the history’s point of view and pointed out where they went wrong.
This retrospective way of reasoning is the intellectual
fraud that Nassim Nicholas Taleb is warning people of.
We do not have the ability to create precise and accurate weather prediction all the
time and yet, we have been predicting the
economic rise and down for more than 30 years.
We look at the past pattern and think that things in the future
will not be able to deviate too far from the statistics.
The Americans looked at stock exchange on Wall
Street and they saw Dow Jones index number
is rising so fast, so they did what seemed to be the logical action: they invested.
The mass, especially the middle-class investors, began to
invest in large numbers and even use credit to ‘play’.
They adopted a new way of life, a luxurious one, and the country saw one of its most
glorious days with cars everywhere and men in working suits working day in and day out.
It only took three weeks for the country to see one of the darkest days
ever as people saw their money gone within hours as the market crashed.
This is the Black Swan of America, which was also known as the
Great Depression, an event that was beyond everyone’s imagination,
its impact so huge that everyone’s life changed in a few weeks and months, unemployment
reached its peak at 25%, and now, people are making up reasons and explanations for it.
It’s fine to figure out where people went wrong and learn of the cause, but what
people make mistake at is to act as if it was something that could be avoided.
And today, people think we can learn from history to avoid big scale war,
to avoid financial crisis and to rely fully on the system of things.
Because the system of this world that was built upon “practical
solutions” that was driven from a thorough study of the “history”,
it seemed to be a legit reason to rely fully on
that the world will not reach a crisis anymore.
Because fool me twice, shame on me.
However, the dynamics of events is showing us
that it is practically impossible for human
beings to predict the course of the future and
know what it’s going to be like in the future.
We did not know that the first computer will become the ancestor of the slim notebooks
we are using nor did they know that calculus functions are easily done on calculators.
They did not know that art is going to be so appreciated so many people are worshipping
and displaying artworks of dead people, analyzing its content and meaning.
It is practically impossible for one to think he knows how the world is going
to end up like or at least create a boundary of how the world may end up like.
Disregarding the outliers has become the downfall of civilization and Taleb is
warning that this behavior may become the cause of the next Great Depression
which will impact the whole world on a much bigger scale.
Nobody knows if slime, squishy and ice-bucket challenge is
going to be recorded in history much like Mona Lisa is.
We are here and living right now at this very
moment and it is virtually impossible for us to
know what it was like during the Great Depression
or what it’s going to be like in the future.
This is the content of the first book of Black Swan by Taleb.
On the second book, Taleb discusses of the principals that we need to
implement to prevent Black Swans from happening and even if they do,
how we can prepare ourselves to minimize the impact of
Black Swan and stop repeating the history over and over.
His principals of a robust society involve simplifying processes to
ensure that the failure of one will not mean the failure of everything.
Begin by stop relying on experts in finance and economists from telling
you the economic forecasts because they have failed countless times.
Be someone who objectively provides rewards but
also punishments to the people who deserve
it because we are not to leave our mistakes and aftermaths for your future generation.
These are also people who shouldn’t be given the chance to refute or fix
their mistakes because they have failed to prove that their system is just.
And this is what the Black Swan Theory is about.