Of Black Swans and Presidential Powers

May 08, 2009 Editorial

For centuries, the inductive method has been used to derive general principles from concrete observations. For instance, when every swan observed by European philosophers seemed to be white they induced that “all swans are white”.
The eighteenth-century sceptical philosopher David Hume pointed out however: “No amount of observations of white swans can allow the inference that all swans are white, but the observation of a single black swan is sufficient to refute that conclusion.”
When, a few decades later, black swans were discovered in Australia not only to exist, but to be relatively abundant, Hume’s observation – and “Black Swans” – took on additional significance.
They became a metaphor for the extremely rare occurrence that belied the rules we derive from our everyday world and on which we depend to get us through that world.
Two years ago, a philosophically inclined Wall Street trader, Nassim Taleb, deployed the term “Black Swans” in a book by the same name in a new way: a rare event beyond the realm of normal expectations, but stressing its unpredictability and overwhelming impact on current events.
He claimed that unlike what is commonly believed, most major breakthroughs (and breakdowns) in every field of human endeavour is not the result of massaging the ninety-nine percent of “facts” that is known, but from the remaining one percent that is unknown.
His favourite example of a modern “Black Swan” is the unexpectedness of the techniques utilised by the perpetrators of 9/11 to breach the defences of the greatest power on earth and bring down the World Trade Centre.
He bemoaned the growing reliance in the ‘90s on financial models developed by the industry of which he was a member, because of their reliance on focusing on the “known” values for variables to predict future outcomes – while completely ignoring the effects of “outliers” or rare occurrences that might prove catastrophic or revolutionary as the case may be.
The meltdown of the world financial system – and the models that it had followed like lemmings – came closely on the heels of the publication of Taleb’s “Black Swan” and he suddenly assumed cult “Guru” status.
We do not have to become acolytes of Taleb to appreciate the point he is stressing: those who pay attention to that which they do not know rather than dogmatically insisting that what is known is all that can impact the present can reap the benefits of the unexpected or escape its downside.
From a graphical example that most of us may be familiar from our schooldays, on the omnipresent Bell Curve on which we plot our variables pay much greater attention to the “tails” on either side of the “bell”.
This is good advice in any endeavour – even politics, around which so much of our efforts are expended in Guyana.
During the height of the Burnhamite dictatorship, a new constitution was drafted and promulgated by the power holders of that era that conferred extraordinary powers on the Presidency – just to cite one example. The creators obviously assumed that they would retain power forever because they were only looking at the “knowns” of the time.
These included primarily, the willingness of the US to go along with their rigging of elections because of the Cold War, in which the major opposition the PPP was viewed as unacceptable as an ally of the USSR.
The PNC geniuses never considered the possibility of the fall of the USSR – the outlier Black Swan event – and the volte face of their benefactor which consequently led to their opponents inheriting the all-powerful Presidency.
This thought should give pause to any in the present regime who may be contemplating either increasing the power of the Presidency through extension of the term-limits or awarding such open-ended benefits to ex-Presidents as has recently been mandated.
In the field of politics, the “veil of ignorance” proposed by John Rawls is the best bulwark against negative Black Swans when designing institutions. Pretend you do not know which party you belong to and expect that your opponent may take occupancy.

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