Black Swan Events and Covid-19
The term “Black Swan” was popularized by Nassim Nicholas Taleb, in his 2007 book of the same name “The Black Swan”. Essentially a Black swan event has three characteristics:
- First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility.
- Second, it carries an extreme 'impact'.
- Third, despite its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.
Continuing with the theory; Mr Taleb has referred to the following as Black Swan events:
The Internet, the personal computer, World War I, the dissolution of the Soviet Union, and the September 11, 2001. I will not debate the merits of whether these are Black Swan events.
Hindsight is a wonderful thing. You have the luxury if sitting back and analyzing events and contemplating the expectability or predictability of an event. Think about it. Was the collapse of the Soviet Union really a Black swan event? How many empires have collapsed over the millennia? The British Empire, The French, The Roman Empire, the Ottoman Empire; in fact, almost all continents would have their examples. The Soviet Union was a sophisticated name for the Russian Empire.
The internet connected the world in ways which were unimaginable even a decade earlier. Then what would one say of the telegram, Telephone cables? They too connected the world in a manner unimaginable earlier.
Does my thought process justify the third characteristic of a Black Swan event? I don’t believe so.
Take Covid-19, is it a Black Swan event? Yes and No. No in the essence that the spread of a pandemic is nothing new. History is replete with such events, the last being the Spanish Flus, of a century ago. The world has been getting several wake-up calls in the last decades. HIV-aids, Ebola in Liberia, Swine Flu, Sars.
The yes is the Economic Impact. Leadership in all countries have a choice. Save lives by keeping economic activity at a standstill by social distancing or keep economic activity open. The danger here is that in many parts of the world, people do not have social security. No work means no food on the table. So, its death by starvation or death by disease. There is only so much freebies and food distribution can do.
After that will kick in the supply chain issues, food security, power plants, water, garbage and sanitary issues, replacement of essential assets. The household repairs, utilities. How long can you practically keep an effective lockdown in place?
Then we will have to choose. That will be the Black Swan Event.
Service Management Analyst
3 年Hi Sunil: I think Covid-19 was not a Black Swan, but a "Grey Rhino". SARS and MERS showed us what a novel coronavirus could do. The likes of Taiwan and South Korea planned for another coronavirus outbreak. The UK along with most of "The West" ignored the threat as another "Asian Thing": that's phase 1 of a grey rhino. The second phase is not doing anything substantive enough. Closing borders, regions and local areas, social distancing, testing, reporting, tracing all came late to Great Britain. Relaxing restrictions for festivals and rites of passage were cowardice dressed as compassion. Today (Monday 14 June 2021) we're expecting an announcement about "Step 4" relaxation in England. I can understand both points of view: stick to the orginal date or postpone by four weeks. As an ITIL-4 Professional, you'll understand the mantra of "Adding Value": history will need to be the judge on how different countries and their leaders have handled the competing 'values' involved: human costs and economics.