{"id":4579,"date":"2019-11-22T07:50:00","date_gmt":"2019-11-22T11:50:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=4579"},"modified":"2022-03-11T16:29:43","modified_gmt":"2022-03-11T20:29:43","slug":"black-swan-fallacy","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/black-swan-fallacy\/","title":{"rendered":"Black Swan Fallacy: Why You See What You Want to See"},"content":{"rendered":"\n<p>What is the <a href=\"https:\/\/www.shortform.com\/blog\/black-swan-theory\/\">black swan<\/a> fallacy? How is it most famous today?<\/p>\n\n\n\n<p>The black swan fallacy is the tendency of people to ignore evidence that contradicts their beliefs and assumptions. This fallacy can also refer to the tendency to believe that things they&#8217;ve never witnessed don&#8217;t exist.<\/p>\n\n\n\n<p>We&#8217;ll cover the roots of the black swan fallacy and look at modern-day, black-swan-fallacy examples.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\">The Black Swan Fallacy<\/h2>\n\n\n\n<p>For millennia, it was universally accepted that all swans were white. In fact, this truth was so incontrovertible that logicians would often use it to illustrate the process of deductive reasoning. That classic deduction went like this:<br><\/p>\n\n\n\n<ol class=\"wp-block-list\"><li>All swans are white<\/li><li>The bird is a swan<\/li><li>The bird is white<\/li><\/ol>\n\n\n\n<p>But in 1697, Willem de Vlamingh, a Dutch explorer, discovered black swans while on a rescue mission in Australia\u2014and, in an instant, a universal, incontrovertible truth was shown to be anything but.<br><\/p>\n\n\n\n<p>After Vlamingh\u2019s discovery, philosophers used the term \u201cblack swan\u201d to describe a seeming logical impossibility that could very well end up being possible. This is the black swan fallacy.<br><\/p>\n\n\n\n<p><a href=\"https:\/\/www.shortform.com\/blog\/nassim-nicholas-taleb\/\">Nassim Nicholas Taleb<\/a>, however, offers a new spin on the term &#8220;black swan fallacy.&#8221; <strong>He uses it to describe specific historical events with specific impacts<\/strong>. These events have three salient features:<br><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>They are \u201coutliers\u201d (that is, they are <em>statistically <\/em>insignificant);<\/li><li>They have profound real-world impacts; and<\/li><li>Despite (or perhaps because of) their extreme unpredictability, they compel human beings to account for them\u2014to explain <em>after the fact<\/em> that they were<em> <\/em>in fact<em> <\/em>predictable.<\/li><\/ul>\n\n\n\n<p>Some <a href=\"https:\/\/www.shortform.com\/blog\/what-is-a-black-swan-event\/\">examples of Black Swan events<\/a> include World Wars I and II, the <a href=\"https:\/\/www.shortform.com\/blog\/importance-of-the-fall-of-the-berlin-wall\/\">fall of the Berlin Wall<\/a>, 9\/11, the rise of the Internet, the stock-market crash of 1987, and the 2008 financial crisis.<\/p>\n\n\n\n<p>Taleb\u2019s thesis is that Black Swans, far from being insignificant or unworthy of systematic study, comprise the <em>most significant <\/em>phenomena in human history. We <em>should<\/em> study them, even if we can\u2019t predict them. Thus, counter-intuitively, we would be better served by concentrating our intellectual energies on what we <em>don\u2019t<\/em>\u2014nay, <em>can\u2019t\u2014<\/em>know, rather than on what we <em>do <\/em>and <em>can <\/em>know.<br><\/p>\n\n\n\n<p>Taleb also claims, also counter-intuitively, that <strong>the more our knowledge advances, the more likely we are to be blindsided by a Black Swan<\/strong>. This is because our knowledge is forever becoming more precise and specific and less capable of recognizing generality\u2014for example, the general tendency for earth-shattering events to be completely unforeseen (which, of course, is <em>why <\/em>they\u2019re earth-shattering).<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>The Black Swan Fallacy, Turkeys, and Other Problems with Induction<\/strong><\/h2>\n\n\n\n<p>The black swan fallacy is often considered a problem with inductive reasoning. Let&#8217;s look at an inductive reasoning example like the black swan fallacy.<\/p>\n\n\n\n<p>Picture a turkey cared for by humans. It has been fed every day for its entire life by the same humans, and so it has come to believe the world works in a certain, predictable, and advantageous way. And it does&#8230;until the day before Thanksgiving.<br><\/p>\n\n\n\n<p>Made famous by British philosopher Bertrand Russell (though, in his telling, the unlucky bird was a chicken), this story illustrates the problem with <em>inductive reasoning<\/em> (the derivation of general rules from specific instances). <strong>With certain phenomena\u2014marketing strategy, stock prices, record sales\u2014a pattern in the past is no guarantee of a pattern in the future<\/strong>.<br><\/p>\n\n\n\n<p>In Taleb\u2019s words, the turkey was a <em>sucker<\/em>\u2014it had full faith that the events of the past accurately indicated the future. Instead, it was hit with a Black Swan, an event that completely upends the pattern of the past. (It\u2019s worth noting that the problem of inductive reasoning <em>is <\/em>the problem of Black Swans: Black Swans are possible because we lend too much weight to past experience.) This is a version of the black swan fallacy.<br><\/p>\n\n\n\n<p>Another example of faulty inductive reasoning, this time from the world of finance, concerns the hedge fund Amaranth (ironically named after a flower that\u2019s \u201cimmortal\u201d), which incurred one of the steepest losses in trading history: $7 billion in less than a week. Just days before the company went into tailspin, Amaranth had reminded its investors that the firm employed twelve risk managers to keep losses to a minimum. The problem was that these risk managers\u2014or suckers\u2014based their models on the market\u2019s <em>past performance<\/em>.&nbsp;Again, this is the black swan fallacy.<br><\/p>\n\n\n\n<p>In order not to be suckers, we must (1) cultivate an \u201c<strong><a href=\"https:\/\/www.shortform.com\/blog\/empirical-skepticism-philosophy\/\">empirical skepticism<\/a><\/strong>\u201d\u2014that is, a skepticism steeped in fact and observation\u2014and (2) remain vigilant against the innately human tendencies that leave us vulnerable to Black Swans.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">The Black Swan Fallacy and Confirmation Bias<\/h2>\n\n\n\n<p>The black swan fallacy can also refer to a type of <a href=\"https:\/\/www.shortform.com\/blog\/confirmation-bias-definition-2\/\">confirmation bias<\/a>. All too often we draw <em>universal<\/em> conclusions from a <em>particular <\/em>set of facts. For example, if we were presented with evidence that showed a turkey had been fed and housed for 1,000 straight days, we would likely predict the same for day 1,001 and for day 1,100.<br><\/p>\n\n\n\n<p>Taleb calls this prediction the \u201cround-trip fallacy.\u201d <strong>When we commit the round-trip fallacy, we assume that \u201cno evidence of <\/strong><strong><em>x<\/em><\/strong><strong>\u201d\u2014where <\/strong><strong><em>x <\/em><\/strong><strong>is any event or phenomenon\u2014is the same as \u201cevidence of no <\/strong><strong><em>x<\/em><\/strong><strong>.\u201d<\/strong><br><\/p>\n\n\n\n<p>For example, in the turkey illustration, we might assume that \u201cno evidence of the possibility of slaughter\u201d equals \u201cevidence of the impossibility of slaughter.\u201d To take a medical example, if a cancer screening comes back negative, there is \u201cno evidence of cancer,\u201d not \u201cevidence of no cancer\u201d (because the scan isn\u2019t perfect and could have missed something).<br><\/p>\n\n\n\n<p>In addition to drawing broad conclusions from narrow observations, we also have a tendency to <em>select<\/em> evidence on the basis of preconceived frameworks, biases, or hypotheses. For example, a scientist conducting an experiment may, often unconsciously, discount evidence that disconfirms her hypothesis in favor of the evidence that confirms it. Taleb calls this habit \u201cnaive empiricism,\u201d but it\u2019s more commonly known as \u201cconfirmation bias.\u201d Some people call it the black swan fallacy.<br><\/p>\n\n\n\n<p>Taleb\u2019s solution to naive empiricism\/confirmation bias is <em>negative empiricism<\/em>\u2014the rigorous search for disconfirming, rather than corroborating, evidence. This technique was pioneered by a philosopher of science named Karl Popper, who called it \u201cfalsification.\u201d The reason negative empiricism\/falsification is so effective is that <strong>we can be far more sure of wrong answers than right ones<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Black Swan Fallacy and the Ludic Fallacy<\/strong><\/h2>\n\n\n\n<p>A repercussion of the Distortion of <a href=\"https:\/\/www.shortform.com\/blog\/silent-evidence\/\">Silent Evidence<\/a>, an element of black swan fallacy, \u201ctunneling\u201d describes the natural human tendency to favor <em>knowns <\/em>and <em>known unknowns<\/em> rather than <em><a href=\"https:\/\/www.shortform.com\/blog\/unknown-unknowns\/\">unknown unknowns<\/a><\/em>. In other words, <strong>our understanding of uncertainty is based almost exclusively on what <em>has happened<\/em> in the past rather than what <em>could have happened<\/em><\/strong>.<br><\/p>\n\n\n\n<p>The primary practitioners of tunneling are those Taleb calls \u201cnerds\u201d\u2014academics, mathematicians, engineers, statisticians, and the like. Nerds are those who think entirely \u201cinside the box\u201d; they Platonify the world and can\u2019t perceive possibilities that lie outside their scientific models and academic training.<br><\/p>\n\n\n\n<p>Nerds suffer from the \u201cludic fallacy.\u201d (\u201cLudic\u201d comes from the Latin word <em>ludus<\/em>, which means \u201cgame.\u201d) That is, they treat uncertainty in real life like uncertainty in games of chance, for example roulette or blackjack. <strong>The problem with this approach is that, unlike games of chance, <em>real life has no rules<\/em><\/strong>.<\/p>\n\n\n\n<p><br>Nerds aren\u2019t the only ones guilty of the <a href=\"https:\/\/www.shortform.com\/blog\/ludic-fallacy\/\">ludic fallacy<\/a>, however; average people indulge it as well. For example, most people think casino games represent the height of risk and uncertainty. In truth, casino games hail from Mediocristan\u2014there are clear and definite rules that govern play, and the odds of winning or losing are calculable. <strong>Unlike real life, the amount of uncertainty in a casino game is highly constrained<\/strong>. This is another version of the black swan fallacy.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is the black swan fallacy? How is it most famous today? The black swan fallacy is the tendency of people to ignore evidence that contradicts their beliefs and assumptions. This fallacy can also refer to the tendency to believe that things they&#8217;ve never witnessed don&#8217;t exist. We&#8217;ll cover the roots of the black swan fallacy and look at modern-day, black-swan-fallacy examples.<\/p>\n","protected":false},"author":4,"featured_media":4594,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21,9],"tags":[60],"class_list":["post-4579","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-philosophy","category-psychology","tag-black-swan","","tg-column-two"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Black Swan Fallacy: Why You See What You Want to See - Shortform Books<\/title>\n<meta name=\"description\" content=\"The black swan fallacy is the tendency to ignore evidence that contradicts your assumptions. 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