Black swan events change the world


Imagine you are a cow.

You live on a farm with other cows and happily graze in the fields. As the days go on you see other cows taken away into a big brick building, never to be seen again. Realizing whatever what happens to the cows who are taken away can’t be good you hope to not be taken away. Times passes and you wonder why you have not been led to the brick building yet, maybe the farmer has taken a liking to you and wants to keep you around. The months pass and you are lulled into a sense of security.

One day as the sun is rising the farmer comes over to you and begins to lead you towards the brick building. Panic fills your heart as you fully realize the fate that lies in wait for you. As you are being turned into steak a certain sense of betrayal is realized. You and the farmer did not have a special bond you were just another piece of his stock.

An actual black swan
An actual black swan

This is an example of a black swan event. These events are a metaphor that are used to describe an unusual event that comes as a surprise and promotes major change in the surrounding area. Black swans are a rare sight and so are these situations.

The theory was developed by Nassim Nicholas Taleb in 2001. There are three things that need to happen in order for an event to be classified as a black swan event.

  • The event needs to come as a surprise to the observers. (The cow never expected to be lead away.)
  • The event has to create major change. (The cow will lose its life.)
  • When the event first takes place, it is rationalized that it could have been expected. (The probability of the cow being killed was never zero.)
Terrorist attacks of 9/11

A real-world black swan would be an event like 9/11. In this case the observers were Americans. No one could ever have imagined what would go down on that day. When the strikes happened, everyone was in shock. 9/11 caused major change to airport security and flying all together in the United States. It could be said that it was inevitable for an attack like this to happen after the Persian Gulf Wars. 9/11 checks all the boxes to be a black swan event.

No one could have predicted the rise of the internet.

But black swan events aren’t always a bad thing. The rise of the internet was an unpredictable event that changed the entire world and made instant communication easy and more accessible. Even just five years before the internet few people could ever imagine a place quite like it.

Black swan events can also take the form of natural disasters. One second everyone is living life as normal then an earthquake or some other disaster hits inflicting damage to the surrounding areas changing the lives of those affected.

Bodies of those trapped at Pompeii.

Some natural disasters are not black swans. If something like a hurricane is being tracked and is known where and when it will hit before it happens then because it does not come as a surprise it is not a black swan. An event like Pompeii would be a black swan because it did come as a surprise along with fitting the other of the criteria of being a black swan.

It is possible for black swans to happen on a smaller scale based in everyday life. Depending on the context, random job loss, rent going up unexpectedly, and even inflation can be classified under black swan events.

Black swan events are a reminder that change is prevalent, and nothing is permanent. Life as we know it can be disputed at any time and everyone should, in some regard, be expecting change. Remember that what you have today you may not have tomorrow. Live every day you have to its fullest because tomorrow is never guaranteed. Black swan events are inevitable, but so is change. In a way these events push the world and our lives forward. Without change nothing would ever be accomplished.