The Black Swan Theory or "Theory of Black Swan Events" was developed by Nassim Nicholas Taleb to explain: 1) the disproportionate role of high-impact, hard to predict, and rare events that are beyond the realm of normal expectations in history, science, finance and technology, 2) the non-computability of the probability of the consequential rare events using scientific methods (owing to their very nature of small probabilities) and 3) the psychological biases that make people individually and collectively blind to uncertainty and unaware of the massive role of the rare event in historical affairs. Unlike the earlier philosophical "black swan problem", the "Black Swan Theory" (capitalized) refers only to unexpected events of large magnitude and consequence and their dominant role in history. Such events, considered extreme outliers, collectively play vastly larger roles than regular occurrences.
Taleb's ten principles for a black swan robust world
Taleb enumerates ten principles for building systems that are robust to Black Swan Events:
1.What is fragile should break early while it is still small. Nothing should ever become Too Big to Fail.
2.No socialisation of losses and privatisation of gains.
3.People who were driving a school bus blindfolded (and crashed it) should never be given a new bus.
4.Do not let someone making an "incentive" bonus manage a nuclear plant – or your financial risks.
5.Counter-balance complexity with simplicity.
6.Do not give children sticks of dynamite, even if they come with a warning.
7.Only Ponzi schemes should depend on confidence. Governments should never need to "restore confidence".
8.Do not give an addict more drugs if he has withdrawal pains.
9.Citizens should not depend on financial assets or fallible "expert" advice for their retirement.
10.Make an omelet with the broken eggs.
Black swan theory
By letting oil and coal companies get rich while they pollute with impunity, and we scramble to repair the damage (or pretend it isn't happening) we socialize the loss, while the profits are going to private enterprise.
What would another Katrina do to New Orleans? Yet Louisiana's leadership is turning a blind eye to how vulnerable much of that state is to sea level rise.
Vitter of sea-rise-threatened Louisiana: “I do not think the science clearly supports global warming theory”
The international community does not have a word for this type of crime yet, but the international community should find a way of classifying extraordinarily irresponsible scientific claims that could lead to mass suffering as some type of crime against humanity.A New Kind of Crime Against Humanity?: The Fossil Fuel Industry's Disinformation Campaign On Climate Change