Black Swan, White Swan, Orange Swan, Dead Swan

Part I: Risk and human nature

If you’re looking to buy a new car, you will pay a substantial premium above its retail price and wait a year for delivery. It’s a chip shortage that won’t be solved any time soon. My neighbor can’t find cat litter due to supply chain issues. My other neighbor, a psychologist came out of retirement due to the unprecedented demand for mental health services. I received my booster shot, but I must wear a mask again because of the highly contagious Omicron variant. My favorite coffee shop opens late and closes early due to a severe labor shortage. Our local grocery store ran out of cream cheese three weeks ago and the clerk can’t tell me when it will be back in stock. My voicemail is full of messages from people I never met offering to buy my home -sight unseen- for 50% more than its market value was two years ago. Inflation, the biggest threat to economic stability was declared dead four decades ago but has suddenly been resurrected terrifying world politicians and central bankers in the process. This is just a sample of many highly improbable events that are now part of our new reality. The world as we know it, looks nothing like it did two years ago.

Most of us have heard this before, but it’s worth repeating: The COVID-19 pandemic has done the impossible. It has affected the lives of most people on the planet in a profound and systemic way. It has uprooted lives and impacted world economies to the measure of tens of Trillions of Dollars. It has tested the nature of global governance and trade and exposed its fragility and shortcomings. It has become the disruptor of all disruptors, the mother of all paradigm shifts.

At the beginning of the pandemic, people turned to their leaders in disbelief and asked the question: How could you not have foreseen this? I asked myself that same question as I turned to the developmental models that have been at the core of my work for the last two decades and I wrote a widely read piece about it. But, the simple question about whether the pandemic was preventable or not still needed to be answered. For that I turned to the work of Nassim Nickolas Taleb, author of the widely successful book The Black Swan. Taleb is a genius statistician who studies the improbable. He predicted the 2008 financial crisis two years…