This pandemic isn’t a black swan — it’s a yellow canary

Image CC-BY-NC Warrior Squirrel

Early in the days of COVID-19, as it was just starting to leave the confines of East Asia, a number of people I know started calling the then-emergent pandemic a “black swan event.” This is a metaphor for something very rare and difficult to predict. It would be a fitting one if COVID-19 was like the Spanish Flu — a once in a century event that wreaks havoc and then is quickly forgotten. It’s become popular in finance circles thanks to the work of options trader Nassim Nicholas Taleb.

As summarized in Wikipedia, Black swan theory has three key charateristics:

1. The disproportionate role of high-profile, hard-to-predict, and rare events that are beyond the realm of normal expectations in history, science, finance, and technology.
2. The non-computability of the probability of the consequential rare events using scientific methods (owing to the very nature of small probabilities).
3. The psychological biases that blind people, both individually and collectively, to uncertainty and to a rare event’s massive role in historical affairs.

A striking image — just because we’ve never seen a black swan doesn’t mean it doesn’t exist — , it’s wholly inadequate for understanding COVID-19. An article in Fast Company helped me understand and dispense with that metaphor…