Black Swans

Nassim Taleb’s theory of the black swan has now entered my list of major planning principles, after having just read his book by the same name. A black swan is an event that is a) completely out-of-the-blue unexpected b) has an extreme impact and c) is something that we tend to concoct all sorts of explanations for after the fact. 9/11 is a classic example of a black swan, as is the success of Harry Potter. (The term “a black swan” in ancient times was used to refer to an impossibility, since all swans were known to be white. This conception had to be revised when Europeans got to Australia in the 17th century, and discovered actual black swans.) Taleb’s thesis is that black swans play far more of a role in history, whether at an individual or a grand scale, than we are accustomed to think about.

A paradox of black swan theory is how does one carry out planning in a world dominated by black swans, since they are by definition completely unpredictable. Taleb’s field is finance, and he is quite critical of the traditional concept of financial risk, the theory of which is centered around bell curve-shaped probability distributions, rather than extreme events. But examples are to be found everywhere. Just because people hold the professional title of being planners doesn’t mean that they aren’t wont to focus on business-as-usual. How many land use and transportation planners have thought about peak oil? And have run the scenario of $8 plus per gallon of gas through their transportation models? A lot of cars will be off the road then, as driving trends in the past year suggest.