99 comments on Geopolitical Feedback Loops in Peak Oil
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Because “robustness tests bury the most important variance.”
In other words, Black Swans are seen as outliers to
be dismissed.
The Power of Power Laws
http://edgeperspectives.typepad.com/edge_perspectives/2007/05/the_power_...
...But it is not just social scientists who fall prey to this temptation to adopt a Gaussian (think Bell Curve here) view of the world. Business executives also are drawn to a Gaussian world. At one level it is much simpler – there is a meaningful “average consumer” that can be used to scale products and operations around – and it is a much more predictable world. In many respects, the history of Western business in the twentieth century represents an effort to build scalable operations through standardization designed to serve “average consumers”.
Arkansaw of Samuel L Clemens
Err, one of the main characteristics of a black swan is it shouldn't be seen at all, before the event that brings it to prominence.
It's not that people ignore the outliers, its that they cannot conceive of it as credible within their mental models. An effect that is erroneously ascribed too low a probability of occurrence isn't a black swan - its a risk assessment failure. There are plenty of those, but black swans are much more disruptive.
For instance, a space shuttle disaster was assessed in risk terms incorrectly, but it was not a black swan (eg even O ring and tile damage risks were known). However the space shuttle pilot taking control and smashing the craft into the White House as a hypervelocity missile would be a black swan, since most people wouldn't ever conceive of it as a risk.
Equally an oil consuming bacteria that spread across the globe, eating all of our remaining supplies would be a black swan; Saudi not telling the truth in reserves would not.
In short, to qualify it has to sound totally, weirdly extreme to the majority of peers in the field.
If we constrain ourselves to the definitions offered by Taleb it would be a Grey Swan, but the point is still well taken.
“robustness tests bury the most important variance.”
I'll disagree.
A Black Swan is something not seen by the overwhelming majority and anyone like, say, Taleb or Mandelbrot,
who point out that Black Swans are inevitable once the Fat Tail of the J Curve has been reached are sidelined.
Only when the Black Swan -Subprime Crisis, anyone,
as part and parcel of PO- is revealed does CW
acknowledge that, yes, it was there.
"Platonic 'maps' based on (Gaussian) bell-curve probability/statistical distributions (what Taleb calls the "Great Intellectual Fraud (GIF)") are like Guillaumet's map; they are (as Kapuscinski would have put it) 'map-mementos.' Platonic maps are too devoid of detail, too vapid, to serve as a useful guide when navigating a world shaped by extreme, catastrophic risk; those maps exaggerate non-dangers (like Guillaumet's 'giant' orange trees and the platoon of 'fearsome' sheep) while totally ignoring (or severely discounting) very serious dangers (like the actual mountains and platoons of hostile natives that Saint-Exupery was really worried about)."
Again. I'm saying a Black Swan is hitting us now.
We've gone over the top of the Gaussian Hubbert's Curve and it's usefulness fades with each passing day.
Because Power Law states that once we enter the Fat Tail
of the other side of the Apostosis, a non linear event-another name for Black Swan IMHO is inevitable.
To wait for it and then react will put us behind the Collapse Event.
as you Jeff should know-
"Thanks primarily to Jeff Vail’s recommendation, I have recently finished Joseph Tainter’s Collapse of Complex Societies."
"a civilization is a society which adopts increasing complexity as a general strategy."
We know that a Black Swan is coming.
Arkansaw of Samuel L Clemens
Thanks, I was not familiar with this concept of "black swan" before. Though it does remind me a lot of Iain M. Banks idea of an "Outside Context Problem". (He used the concept in one of his novels, "Excession").
Here's a description of an OCP in Bank's own (brilliant) words: