The Black Swan: The Impact of the Highly Improbable

Taleb explores the limits of our ability to predict and forecast the future. In this chapter, he focuses specifically on the concept of “epistemic arrogance,” which he defines as "our hubris concerning the limits of our knowledge" (138). We simply do not have enough wisdom to be trusted with appropriate applications of our knowledge. We may know something, but we seldom know what to do with it. Furthermore, according to Taleb, "epistemic arrogance bears a double effect: we overestimate what we know, and underestimate uncertainty" (140). We are generally not very skilled in making predictions about the future. Even as we accumulate knowledge and information, reading countless books and staying informed about what's going on in the world by faithfully reading news, our ability to make predictions still does not increase.

Taleb reinforces two main ideas in this chapter: the limitations of human knowledge and the true nature of humanity. Taleb debunks the notion that accumulating knowledge will somehow result in sound predictions about the future, particularly about Black Swans. In fact, Taleb believes that hoarding knowledge and information may even decrease our ability to forecast future events. Human beings tend to perceive the number of possible outcomes based on observed precedent.