about philosophy and theoretical history—and, we will see, about science
as well, since I learned the difference between forward and backward
processes.
How? Simply, the diary purported to describe the events as they were
taking place, not after. I was in a basement with history audibly unfolding
above me (the sound of mortar shells kept me up all night). I was a
teenager attending the funerals of classmates. I was experiencing a nontheoretical
unfolding of History and I was reading about someone apparently
experiencing history as it went along. I made efforts to mentally produce
a movielike representation of the future and realized it was not so obvious.
I realized that if I were to start writing about the events later they would
seem more . . . historical. There was a difference between the before and
the after.
The journal was purportedly written without Shirer knowing what
was going to happen next, when the information available to him was not
corrupted by the subsequent outcomes. Some comments here and there
were quite illuminating, particularly those concerning the French belief
that Hitler was a transitory phenomenon, which explained their lack of
preparation and subsequent rapid capitulation. At no time was the extent
of the ultimate devastation deemed possible.
While we have a highly unstable memory, a diary provides indelible
facts recorded more or less immediately; it thus allows the fixation of an
unrevised perception and enables us to later study events in their own
context. Again, it is the purported method of description of the event,
not its execution, that was important. In fact, it is likely that Shirer and
his editors did some cheating, since the book was published in 1941
and publishers, I am told, are in the business of delivering texts to the
general public instead of providing faithful depictions of the authors'
mind-sets stripped of retrospective distortions. (By "cheating," I mean removing
at the time of publication elements that did not turn out to be
relevant to what happened, thus enhancing those that may interest
the public. Indeed the editing process can be severely distorting, particu14
UMBERTO E C O ' S A N T I L I B R A RY
larly when the author is assigned what is called a "good editor.") Still,
encountering Shirer's book provided me with an intuition about the workings
of history. One would suppose that people living through the beginning
of WWII had an inkling that something momentous was taking
place. Not at all.*
Shirer's diary turned out to be a training program in the dynamics of
uncertainty. I wanted to be a philosopher, not knowing at the time what
most professional philosophers did for a living. The idea led me to adventure
(rather to the adventurous practice of uncertainty) and also to mathematical
and scientific pursuits instead.
Education in a Taxicab
I will introduce the third element of the triplet, the curse of learning, as
follows. I closely watched my grandfather, who was minister of defense,
and later minister of the interior and deputy prime minister in the early
days of the war, before the fading of his political role. In spite of his position
he did not seem to know what was going to happen any more than
did his driver, Mikhail. But unlike my grandfather, Mikhail used to repeat
"God knows" as his main commentary on events, transferring the task of
understanding higher up.
I noticed that very intelligent and informed persons were at no advantage
over cabdrivers in their predictions, but there was a crucial difference.
Cabdrivers did not believe that they understood as much as learned
people—really, they were not the experts and they knew it. Nobody knew
anything, but elite thinkers thought that they knew more than the rest because
they were elite thinkers, and if you're a member of the elite, you automatically
know more than the nonelite.
It is not just knowledge but information that can be of dubious value.
It came to my notice that almost everybody was acquainted with current
events in their smallest details. The overlap between newspapers was so
* The historian Niall Ferguson showed that, despite all the standard accounts of the
buildup to the Great War, which describe "mounting tensions" and "escalating
crises," the conflict came as a surprise. Only retrospectively was it seen as unavoidable
by backward-looking historians. Ferguson used a clever empirical argument
to make his point: he looked at the prices of imperial bonds, which normally include
investors' anticipation of government's financing needs and decline in expectation
of conflicts since wars cause severe deficits. But bond prices did not reflect
the anticipation of war. Note that this study illustrates, in addition, how working
with prices can provide a good understanding of history.
THE A P P R E N T I C E S H I P OF AN E M P I R I C A L S K E P T I C 15
large that you would get less and less information the more you read. Yet
everyone was so eager to become familiar with every fact that they read
every freshly printed document and listened to every radio station as if the
great answer was going to be revealed to them in the next bulletin. People
became encyclopedias of who had met with whom and which politician
said what to which other politician (and with what tone of voice: "Was he
more friendly than usual?"). Yet to no avail.
CLUSTERS
I also noticed during the Lebanese war that journalists tended to cluster
not necessarily around the same opinions but frequently around the same
framework of analyses. They assign the same importance to the same sets
of circumstances and cut reality into the same categories—once again the
manifestation of Platonicity, the desire to cut reality into crisp shapes.
What Robert Fisk calls "hotel journalism" further increased the mental
contagion. While Lebanon in earlier journalism was part of the Levant,
i.e., the eastern Mediterranean, it now suddenly became part of the Middle
East, as if someone had managed to transport it closer to the sands of
Saudi Arabia. The island of Cyprus, around sixty miles from my village in
northern Lebanon, and with almost identical food, churches, and habits,
suddenly became part of Europe (of course the natives on both sides became
subsequently conditioned). While in the past a distinction had been
drawn between Mediterranean and non-Mediterranean (i.e., between the
olive oil and the butter), in the 1970s the distinction suddenly became that
between Europe and non-Europe. Islam being the wedge between the two,
one does not know where to place the indigenous Arabic-speaking Christians
(or Jews) in that story. Categorizing is necessary for humans, but it
becomes pathological when the category is seen as definitive, preventing
people from considering the fuzziness of boundaries, let alone revising
their categories. Contagion was the culprit. If you selected one hundred
independent-minded journalists capable of seeing factors in isolation from
one another, you would get one hundred different opinions. But the
process of having these people report in lockstep caused the dimensionality
of the opinion set to shrink considerably—they converged on opinions
and used the same items as causes. For instance, to depart from Lebanon
for a moment, all reporters now refer to the "roaring eighties," assuming
that there was something particularly distinct about that exact decade.
And during the Internet bubble of the late 1990s, journalists agreed on
16 UMBERTO E C O ' S A N T I L I B R A RY
crazy indicators as explanatory of the quality of worthless companies that
everyone wanted very badly.*
If you want to see what I mean by the arbitrariness of categories, check
the situation of polarized politics. The next time a Martian visits earth, try
to explain to him why those who favor allowing the elimination of a fetus
in the mother's womb also oppose capital punishment. Or try to explain
to him why those who accept abortion are supposed to be favorable to
high taxation but against a strong military. Why do those who prefer sexual
freedom need to be against individual economic liberty?
I noticed the absurdity of clustering when I was quite young. By some
farcical turn of events, in that civil war of Lebanon, Christians became
pro-free market and the capitalistic system—i.e., what a journalist would
call "the Right"—and the Islamists became socialists, getting support
from Communist regimes {Pravda, the organ of the Communist regime,
called them "oppression fighters," though subsequently when the Russians
invaded Afghanistan, it was the Americans who sought association
with bin Laden and his Moslem peers).
The best way to prove the arbitrary character of these categories, and
the contagion effect they produce, is to remember how frequently these
clusters reverse in history. Today's alliance between Christian fundamentalists
and the Israeli lobby would certainly seem puzzling to a nineteenthcentury
intellectual—Christians used to be anti-Semites and Moslems
were the protectors of the Jews, whom they preferred to Christians. Libertarians
used to be left-wing. What is interesting to me as a probabilist is
that some random event makes one group that initially supports an issue
ally itself with another group that supports another issue, thus causing the
two items to fuse and unify . . . until the surprise of the separation.
Categorizing always produces reduction in true complexity. It is a
manifestation of the Black Swan generator, that unshakable Platonicity
that I defined in the Prologue. Any reduction of the world around us can
have explosive consequences since it rules out some sources of uncertainty;
it drives us to a misunderstanding of the fabric of the world. For instance,
you may think that radical Islam (and its values) are your allies
against the threat of Communism, and so you may help them develop,
until they send two planes into downtown Manhattan.
* We will see in Chapter 10 some clever quantitative tests done to prove such herding;
they show that, in many subject matters, the distance between opinions is remarkably
narrower than the distance between the average of opinions and truth.
THE A P P R E N T I C E S H I P OF AN E M P I R I C A L S K E P T I C 17
It was a few years after the beginning of the Lebanese war, as I was attending
the Wharton School, at the age of twenty-two, that I was hit with
the idea of efficient markets—an idea that holds that there is no way to derive
profits from traded securities since these instruments have automatically
incorporated all the available information. Public information can
therefore be useless, particularly to a businessman, since prices can already
"include" all such information, and news shared with millions gives
you no real advantage. Odds are that one or more of the hundreds of millions
of other readers of such information will already have bought the
security, thus pushing up the price. I then completely gave up reading newspapers
and watching television, which freed up a considerable amount of
time (say one hour or more a day, enough time to read more than a hundred
additional books per year, which, after a couple of decades, starts
mounting). But this argument was not quite the entire reason for my dictum
in this book to avoid the newspapers, as we will see further benefits
in avoiding the toxicity of information. It was initially a great excuse to
avoid keeping up with the minutiae of business, a perfect alibi since I found
nothing interesting about the details of the business world—inelegant, dull,
pompous, greedy, unintellectual, selfish, and boring.
Where Is the Show?
Why someone with plans to become a "philosopher" or a "scientific
philosopher of history" would wind up in business school, and the Wharton
School no less, still escapes me. There I saw that it was not merely
some inconsequential politician in a small and antique country (and his
philosophical driver Mikhail) who did not know what was going on. After
all, people in small countries are supposed to not know what is going on.
What I saw was that in one of the most prestigious business schools in the
world, in the most potent country in the history of the world, the executives
of the most powerful corporations were coming to describe what
they did for a living, and it was possible that they too did not know what
was going on. As a matter of fact, in my mind it was far more than a possibility.
I felt in my spine the weight of the epistemic arrogance of the
human race.*
I became obsessive. At the time, I started becoming conscious of my
* I then realized that the great strength of the free-market system is the fact that company
executives don't need to know what's going on.
18 UMBERTO E C O ' S A N T I L I B R A RY
subject—the highly improbable consequential event. And it was not only
well-dressed, testosterone-charged corporate executives who were usually
fooled by this concentrated luck, but persons of great learning. This
awareness turned my Black Swan from a problem of lucky or unlucky
people in business into a problem of knowledge and science. My idea is
that not only are some scientific results useless in real life, because they underestimate
the impact of the highly improbable (or lead us to ignore it),
but that many of them may be actually creating Black Swans. These are
not just taxonomic errors that can make you flunk a class in ornithology.
I started to see the consequences of the idea.
8V4 LBS LATER
Four and a half years after my graduation from Wharton (and 83/4 pounds
heavier), on October 19, 1987,1 walked home from the offices of the investment
bank Credit Suisse First Boston in Midtown Manhattan to the
Upper East Side. I walked slowly, as I was in a bewildered state.
That day saw a traumatic financial event: the largest market drop in
(modern) history. It was all the more traumatic in that it took place at a
time when we thought we had become sufficiently sophisticated with all
