Antifragile: Things That Gain from Disorder by Nassim Nicholas Taleb (Random House; November 27, 2012)
*A podcast discussion on the topic of antifragility (primarily as it pertains to the body) is also available here:
Table of Contents:
PART I: AN INTRODUCTION TO ANTIFRAGILITY
1. Fragility, Robustness, and Antifragility
2. The Antifragility of Living Things (with a Focus on the Human Body)
3. The Antifragility of Evolution
4. The Complex and the Noncomplex
5. How Modernity is Fragilizing Complex Systems: An Introduction
PART II: THE RIGHT WAY AND THE WRONG WAY TO APPROACH ANTIFRAGILE SYSTEMS
6. The Body
- a. How to Destroy a Body: Iatrogenics
- b. How to Take Care of a Body
- a. Absence of Skin in the Game among Politicians and Civil Servants
- b. General Recommendations to Improve Politics
11. Antifragility and Unpredictability: How to Live in an Unpredictable World
12. Conclusion: Why Nassim Nicholas Taleb Would Hate This Article
The concept of fragility is very familiar to us. It applies to things that break when you strike or stretch them with a relatively small amount of force. Porcelain cups and pieces of thread are fragile. Things that do not break so easily when you apply force or stress to them we call strong or resilient, even robust. A cast-iron pan, for instance. However, there is a third category here that is often overlooked. It includes those things that actually get stronger or improve when they are met with a stressor (up to a point). Take weight-lifting. If you try to lift something too heavy, you’ll tear a muscle; but lifting more appropriate weights will strengthen your muscles over time. This property can be said to apply to living things generally, as in the famous aphorism ‘what doesn’t kill you makes you stronger’. Strangely, we don’t really have a word for this property, this opposite of fragility.
For author Nassim Nicholas Taleb, this is a major oversight, for when we look closely, it turns out that a lot of things (indeed the most important things) have, or are subject to, this property. Indeed, for Taleb, all that lives, and all the complex things that these living things create (like societies, economic systems, businesses etc.) have, or must confront this property in some way. This is important to know, because understanding this can help us understand how to design and approach these things (and profit from them), and failing to understand it can cause us to unwittingly harm or even destroy them (and be harmed by them). So Taleb has taken it upon himself to name and explore this curious property and its implications; and in his new book Antifragile: Things That Gain from Disorder Taleb reports on his findings.
As the title would suggest, what Taleb has found is that most complex systems not only gain from small stressors, but they are designed to gain more when these stressors are distributed irregularly, or randomly. This point is more difficult to accept because we tend to dislike disorder and randomness. Disorder can be frightening, because unpredictable, and is therefore not something that we readily welcome. So what we often do is attempt to remove the random and disorderly from our systems (and eliminate the shocks), and thus make them smooth. For example, we may try to take the boom and bust out of the economy, and instead aim for a gradual upward trend.
For Taleb, though, this is a big mistake, because while removing the small shocks in a complex system may create stability for a time, it actually upsets the system and makes it prone to major shocks in the long term. What’s more, unlike the small shocks (that refine and improve the system), the major shocks are usually damaging, and can even destroy the system. So removing the small shocks from a complex system doesn’t create stability; rather, it creates the illusion of stability. In the economy, for instance, you get a long period of stability followed by a major crash.
This phenomenon is not just confined to the economy. Indeed, Taleb maintains that it is the spirit of the age to believe that we can remove the disorder from any system (and eliminate the shocks), and render it orderly, smooth and predictable. We are almost always mistaken in this, and end up creating systems that are prone to major damage and even outright destruction (in Taleb’s language, we ‘fragilize’ these systems). We call the damaging and destructive episodes Black Swan events (Taleb himself coined the term). Better it would be by far, Taleb argues, to accept and even welcome a certain amount of disorder, randomness and jaggedness in our lives and systems, and put ourselves in a position to profit from the unpredictable, rather than eradicate it.
On this last point, Taleb maintains that it is indeed possible to profit from the unpredictable (without having to actually predict any specific thing—which is next to impossible in the realm of the complex anyway). We simply need to recognize what systems are fragile (and therefore prone to collapse), and what systems are antifragile (and therefore prone to grow stronger from stressors), and get out of the way of the former, and put our faith in the latter (thus antifragilizing ourselves in the process). This applies not only to large, overarching systems like corporations, economic systems and political societies, but our own bodies and minds.
Here is Nassim Nicholas Taleb introducing the concept of antifragility (and his new book):
*To check out the book at Amazon.com, or purchase it, please click here: Antifragile: Things That Gain from Disorder
What follows is a full executive summary of Antifragile: Things That Gain from Disorder by Nassim Nicholas Taleb.
PART I: AN INTRODUCTION TO ANTIFRAGILITY
1. Fragility, Robustness, and Antifragility
Consider a parcel full of glassware that you intend to ship half way around the world. You would write ‘Fragile’ on such a parcel (loc. 737). If, however, the parcel contained something that you weren’t really worried about breaking (say a led pipe), you wouldn’t bother writing anything on it. What’s the point? But what about a parcel that consists of an object that would benefit from the odd knock? As Taleb explains, “it’s contents would not just be unbreakable, but would benefit from shocks and a wide array of trauma” (loc. 743). What would you write on such a parcel to encourage the handlers to mishandle it? You may write something like “‘please mishandle’ or ‘please handle carelessly’” (loc. 743). But if you had to come up with a single word to express this concept, you may find yourself at a loss. The fragile, we know, is what “would be at best unharmed, the robust would be at best and at worst unharmed,” but what would you call something that is “at worst unharmed” (loc. 746).
As Taleb points out, we don’t really have a word for this concept—this ‘reverse fragility’—for it is, for the most part, just “not part of our consciousness” (loc. 748). For Taleb, though, this is a significant oversight, for reverse fragility has a significant role to play in our lives. As the author explains, it is “part of our ancestral behavior, our biological apparatus, and a ubiquitous property of every system that has survived” (loc. 748). So Taleb has taken it upon himself to bring a name to this important concept: antifragile.
2. The Antifragility of Living Things (with a Focus on the Human Body)
The simplest and most straightforward example of an antifragile system is the body of a living organism. Take the human body; it benefits from stressors (to a point): “for instance, your bones will get denser when episodic stress is applied to them, a mechanism formalized under the name Wolff’s Law after an 1892 article by a German surgeon” (loc. 1144). This effect can be seen in people who regularly take part in certain kinds of physical activity—such as someone in a traditional society who is accustomed to carrying heavy objects or liquids in receptacles balanced atop their head (a practice called ‘head-loading) (loc. 1197, 1211). Of course, if you apply too much stress to a bone it will break (loc. 1144), so antifragile things may well have a breaking point; but the point is that an antifragile system will grow stronger from any stress that is beneath its breaking point (loc. 4807) (so long, of course, as it is given sufficient time to recover and strengthen between stressful episodes [loc. 1160, 1214-24]).
Muscles are the same way, as anyone knows from weightlifting. As Taleb explains, “in weightlifting… the body overshoots in response to exposures and overprepares (up to the point of biological limit, of course). This is how bodies get stronger” (loc. 995). What’s more, muscles grow strongest when they are taxed with the highest amount of weight beneath their breaking point (loc. 4813). It is for this reason that strength trainers advise working with very heavy weights and few reps, as opposed to lesser weights with more reps (a practice called ‘maximum lifts’ [loc. 1003]). In other words, the more intense the stress, the more the muscle responds, and the stronger the muscle becomes.
As a third example, consider the fact that an organism can gain a tolerance to a poison by way of being exposed to the poison in small doses (loc. 825). The process is called mithridatization, after an ancient king who used it on himself: “According to legend, Mithridates IV, king of Pontus in Asia Minor, while hiding after his father’s assassination, got himself some protection against poisoning by ingesting sub-lethal doses of toxic material in progressively larger quantities” (loc. 825). The use of mithridatism in history does not end with king Mithridates IV, though; indeed, the practice pops up repeatedly in the history books (loc. 827)—most recently in connection with the Russian Rasputin.
In addition, some toxins, when taken in small doses, not only induce a tolerance in the recipient but even act as a kind of medicine (loc. 841). This process is called hormesis: “hormesis, a word coined by pharmacologists, is when a small dose of a harmful substance is actually beneficial for the organism, acting as a medicine… Hormesis was well known by the ancients… But it was only in 1888 that it was first ‘scientifically’ described… by a German toxicologist, Hugo Schulz” (loc. 846).
Now, in living things, it is also a stressor to be kept from the things that the body needs (such as water, food and sleep), so it is also possible to be toughened up by way of being kept from these things longer than usual occasionally. A good case in point here is caloric restriction and fasting. The ancient religions have long understood the benefits of these practices (loc. 4921, 6564), but modern science is only now beginning to come around to them. As Taleb explains, “scientists are in the process of discovering the effects of episodic deprivation of some, or all, foods. Somehow, evidence shows, we get sharper and fitter in response to the stress of the constraint. We can look at biological studies… to verify the existence of a human response to hunger: that biological mechanisms are activated by food deprivation. And we have experiments on cohorts showing the positive effect of hunger—or deprivation of a food group—on the human body” (loc. 6548).
These studies have also been performed on other animals, and the results have been similar. For example, it has been found that “caloric restriction (permanent or episodic) activates health reactions and switches that, among other benefits, lengthen life expectancy in laboratory animals” (loc. 852-54; see also 2414, 4917, 6426, 6540-45).
Now, not only do bodies get stronger when they are met with periodic stress, but, conversely, the lack of this periodic stress tends to lead to degeneration and atrophy. This is evident when you become bedridden for a long stretch due to illness (loc. 368). Similarly, a deficiency of stressors can also lead to premature atrophy in old-age: “we observe old people and see them age, so we associate aging with their loss of muscle mass, bone weakness, loss of mental function, taste for Frank Sinatra music and similar degenerative effects. But these failures to self-repair come largely from maladjustment—either too few stressors or too little time for recovery between them… What we observe in ‘aging’ is a combination of maladjustment and senescence, and it appears that the two are separable—senescence might not be avoidable, and should not be avoided… maladjustment is avoidable” (loc. 1162).
There is a reason why the bodies of living things are antifragile, and this is because they have been designed by evolution to be so (loc. 1015-24). Put another way, those organisms whose bodies were strengthened from exposure to stress were able to survive and reproduce more effectively than those that were not, and so spread their antifragile genes through the gene pool. It is easy to see why antifragility is adaptive, since an organism needs to be able to withstand the stressors in its environment in order to survive, and developing enough strength to match and supersede the greatest stressor that it has experienced ensures that an organism is resilient enough to withstand the harshest that its environment has to offer—as well as insuring itself against the possibility of meeting an even larger stressor in the future (an ever-present possibility). As Taleb explains, “nature… prepares for what has not happened before, assuming worse harm is possible” (loc. 993; see also 1019).
Now, for Taleb, antifragile systems not only benefit from periodic stressors, but they also tend to benefit more when these stressors are distributed randomly, as opposed to more regularly. The reason why this is the case has to do with the fact that antifragile systems are necessarily complex (as we shall see in a moment), and a certain amount of randomness is a natural (and necessary) part of complex systems. Biological systems are a special case here, for not only are they complex systems themselves, but they also live in and must adapt to a complex system (i.e., an ecological system). In other words, at least part of the reason why living things respond better to randomized stressors is because they evolved in an environment where these stressors were not only present, but distributed randomly, and so had to adapt accordingly (loc. 1405) (there will be more on this below).
Of course, there are limits to just how antifragile a living thing can be. For not only are there limits when it comes to how big a stressor an organism is able to withstand, but it is also the case that no living thing escapes the cold arms of death in the end: if a stressor of force does not take you (by which I mean trauma or disease), the stressor of time certainly will (loc. 1155, 1369).
3. The Antifragility of Evolution
Interestingly, though, while all living things expire, the genetic code that is responsible for these organisms lives on for much, much longer (loc. 1364). What’s more, just as an individual organism grows stronger with exposure to stressors in the course of its lifetime, so the genetic code of a species grows stronger with time due to evolution (specifically, the survival of the fittest) (loc. 1367). Each new generation represents an improvement over the last (in terms of biological fitness, at any rate), for only the fittest are successful in passing on their genes (loc. 1362).
This goes to show two things. First, evolution is itself an antifragile process (loc. 1367). And second, there are levels or grades of antifragility. In this case species are more antifragile than individual organisms (loc. 1367). On a still higher plane, life itself is more antifragile than any given species (loc. 1406).
Let us pause for a moment, though, at the level of the species. It is important to note here that a species grows stronger by way of sacrificing its individuals (loc. 1372-74). The least fit are sacrificed first, of course, but in the end all are sacrificed as each generation gives way to the next. This is not only a matter of fact, but absolutely essential for the species to evolve. The old are required to give way to the new (replete with their new genetic modifications), in order that nature may continue to experiment and refine the final product. If nature were stuck with only one generation it would need to predict what would work for all time (a virtually impossible task) (loc. 1377-84). But by introducing small variations with each new generation (random mutations, that is), nature doesn’t need to predict anything (loc. 1384). It is free to continue tinkering, and let fitness decide (loc. 1387). To put it starkly, “organisms need to die for nature to be antifragile—nature is opportunistic, ruthless, and selfish” (loc. 1374).
4. The Complex and the Noncomplex
Unlike organisms, inanimate objects are decidedly fragile, or robust at best. As Taleb explains, “a human body can benefit from stressors (to get stronger)… But a dish, a car, an inanimate object will not—these may be robust but cannot be intrinsically antifragile. Inanimate—that is, nonliving—material, typically, when subjected to stress, either undergoes material fatigue or breaks” (loc. 1146). Nevertheless, there are some possible exceptions to this rule. Taleb himself comes up with one: “one of the rare exceptions I’ve seen is in the report of a 2011 experiment by Brent Carey, a graduate student, in which he shows that composite material of carbon nanotubes arranged in a certain manner produces a self-strengthening response previously unseen in synthetic materials, ‘similar to the localized self-strengthening that occurs in biological structures’” (loc. 1148).
The exceptions may be rare but they are important because they point up the fact that the distinction between fragile and antifragile cannot be reduced to the distinction between the nonliving and the biological. The true distinction here is more properly that between noncomplex and complex systems (loc. 1173).
A complex system is one with multiple interdependent variables and an ability to self-organize in some way (loc. 1170-75). First, let us address multiple independent variables. Here is Taleb to explain: “artificial, man-made mechanical and engineering contraptions with simple responses are complicated, but not ‘complex,’ as they don’t have interdependencies. You push a button, say a light switch, and get an exact response, with no possible ambiguity in the consequences, even in Russia. But with complex systems, interdependencies are severe. You need to think in terms of ecology: if you remove a specific animal you disrupt a food chain: its predators will starve and its prey will grow unchecked, causing complications and a series of cascading side effects… consequences that were hard to see ahead of time. Likewise, if you shut down a bank in New York, it will cause ripple effects from Iceland to Mongolia” (loc. 1180)
The multiple interdependent variable of a complex system interact with one another to yield self-organization. This is evident from the quote above. In the case of ecology, the parts interact to produce a certain stable ecological system. Again, though, the complex goes beyond biology: “many things such as society, economic activities and markets, and cultural behavior are apparently man-made but grow on their own to reach some kind of self-organization. They may not be strictly biological, but they resemble the biological in that, in a way, they multiply and replicate—think of rumors, ideas, technologies, and businesses. They are closer to the cat than to the washing machine but tend to be mistaken for washing machines” (loc. 1173).
5. How Modernity is Fragilizing Complex Systems: An Introduction
This last point is important. Taleb’s message here is that complex systems gain their antifragility by way of being allowed to unfold organically (which includes some measure of randomness). In other words, these systems resist top-down design, and oftentimes even top-down interference. This is because these systems are simply too complex to be controlled from the outside. We may be fooled into thinking that we can come up with a formulaic way to manipulate these systems (based on some theory or other), but we will eventually be proven wrong, and the results will almost always be disastrous (loc. 402). Interfering with complex systems in a top-down way, and extricating the randomness, upsets them—such that it removes their antifragility and renders them fragile. As Taleb explains, “man-made complex systems tend to develop cascades and runaway chains of reactions that decrease, even eliminate, predictability and cause outsized events” (loc. 401). Taleb calls these outsized events Black Swans (loc. 357).
For Taleb, the only way that we can effectively work with complex systems is by working from the inside—by gearing our decisions and actions to act as minor tweaks on the system (just as evolution does). What tweaks work we must learn by way of trial and error (just as evolution does). Some, indeed many, of our decisions and actions will turn out to be failures, but by keeping the tweaks small we can reduce the probability of upsetting the system entirely (loc. 592, 672-75).
For Taleb, though, the modern age is marked by thinking that is the exact reverse of this. Here is Taleb to explain: “we have been fragilizing the economy, our health, political life, education, almost everything… by suppressing randomness and volatility… Complex systems are weakened, even killed when deprived of stressors. Much of our modern, structured, world has been harming us with top-down policies and contraptions (dubbed ‘Soviet-Harvard delusions’ in the book) which do precisely this: an insult to the antifragility of systems. This is the tragedy of modernity: as with neurotically overprotective parents, those trying to help are often hurting us most. If about everything top-down fragilizes and blocks antifragility and growth, everything bottom-up thrives under the right amount of stress and disorder. The process of discovery (or innovation, or technological progress) itself depends on antifragile tinkering, aggressive risk bearing rather than formal education” (loc. 373). Elsewhere, Taleb writes that “modernity corresponds to the systematic extraction of humans from their randomness-laden ecology—physical and social, even epistemological. Modernity is not just the postmedieval, postagrarian, and postfeudal historical period as defined in sociology textbooks. It is rather the spirit of an age marked by rationalization (naive rationalism), the idea that society is understandable, hence must be designed, by humans. With it was born statistical theory, hence the beastly bell curve. So was linear science. So was the notion of ‘efficiency’—or optimization” (loc. 2088) (it should be noted here that Taleb is not exactly anti-science, it is just that he is opposed to science that is theory-driven, as opposed to the purely empirical variety [loc. 855-60, 2219-21, 6021]).
We will now take a closer look at how modernity has been compromising specific complex systems, as well as Taleb’s prescriptions for how we should be handling these systems. We shall begin by way of returning to the body, and then expand outward to explore other complex, but inorganic systems such as technology, businesses, the economy and politics. We shall conclude with a look at how antifragility can help us in a general way, as we navigate our way through a fundamentally unpredictable world.
PART II: THE RIGHT WAY AND THE WRONG WAY TO APPROACH ANTIFRAGILE SYSTEMS
6. The Body
a. How to Destroy a Body: Iatrogenics
When it comes to the body, the single most significant way that we fragilize it, according to Taleb, is by stepping in with medical intervention far more often, and far sooner than is truly necessary or beneficial. Unless the body is very sick, Taleb argues, we should let time, and the body itself, do the healing (loc. 6055). As the author puts it, “we need to focus on high-symptom conditions and ignore, I mean really ignore, other situations in which the patient is not very ill” (loc. 6055; see also 5977, 6082).There are two reasons for this. To begin with, as an antifragile system, the body was designed to heal itself (at least up to a point), and in this it most often does very well—even though this sometimes requires a bit of time (and patience). For the most part, then, the body should be left to do the work of healing on its own (loc. 2200-05, 6067).
Second, whenever you interfere with a complex system, even though you may help it in one respect, it is always possible (even probable) that you will introduce unintended (and negative) consequences—often to the point that you will end up hurting the system more than you help it in the long run. As the author explains, “the name for such net loss, the (usually hidden or delayed) damage from treatment in excess of the benefits, is iatrogeneics, literally, ‘caused by the healer,’ iatros being a healer in Greek” (loc. 2140). In those cases where you are not very ill, the chances that the negative side effects of a treatment will outstrip the benefits are particularly high, and so it is just these cases, Taleb argues, when you should forego treatment in favor of allowing your body to heal itself (loc. 6044).
Historically, iatrogenics has been a significant problem in the medical industry. In fact, Taleb contends that “until penicillin, medicine had a largely negative balance sheet—going to the doctor increased your chance of death” (loc. 2145). And even today, Taleb argues, iatrogenics continues to be a serious issue. The phenomenon is increasingly being acknowledged within the profession itself (loc. 2160, 2172-75). As Taleb explains, “medical error currently kills between three times (as accepted by doctors) and ten times as many people as car accidents in the United States. it is generally accepted that harm from doctors—not including risks from hospital germs—accounts for more deaths than any single cancer” (loc. 2162).
Proof of iatrogenics is also to be found in studies of hospital strikes. As Taleb explains, “we have a few pieces of data from the small number of hospital strikes during which only a small number of operations are conducted (for the most urgent cases), and elective surgery is postponed. Depending on whose side in the debate you join, life expectancy either increases in these cases or, at the least, does not seem to drop. Further, which is significant, many of the elective surgeries are subsequently canceled upon the return to normalcy—evidence of the denigration of Mother Nature’s work by some doctors” (loc. 6375).
When it comes to specifics, Taleb is willing to name a whole host of procedures and medicines (past and present) that run afoul of iatrogenics: “here are some verified and potential examples of iatrogenics (in terms of larger downside outside of very ill patients, whether such downside has been verified or not): Vioxx, the anti-inflammatory medicine with delayed heart problems as side effects. Antidepressants (used beyond the necessary cases). Bariatric surgery (in place of starvation of overweight diabetic patients). Cortisone. Disinfectants, cleaning products potentially giving rise to autoimmune disease. Hormone replacement therapy. Hysterectomies. Cesarean births beyond the strictly necessary. Ear tubes in babies as an immediate response to ear infection. Lobotomies. Iron supplementation. Whitening of rice and wheat—it was considered progress. The sunscreen creams suspected to cause harm. Hygiene (beyond a certain point, hygiene may make you fragile by denying hormesis—our own antifragility)… Lysol and other disinfectants killing so many ‘germs’ that kids’ developing immune systems are robbed of necessary workout (or robbed of the ‘good’ friendly germs and parasites). Dental hygiene: I wonder if brushing our teeth with toothpaste full of chemical substances is not mostly to generate profits for the toothpaste industry—the brush is natural, the toothpaste might just be to counter the abnormal products we consume, such as starches, sugars and high fructose corn syrup… soy milk. Cow milk for people of Mediterranean and Asian descent. Heroin, the most dangerously addictive substance one can imagine, was developed as a morphine substitute for cough suppressants that did not have morphine’s addictive side effects. Psychiatry, particularly child psychiatry—but I guess I don’t need to convince anyone about its dangers. I stop here” (loc. 6167) (Taleb does not really stop here: other examples of medical iatrogencis are littered throughout the text. Also, Taleb argues that the list is likely to be much longer than what we know of, since the negative side effects of treatments often go uncovered until long after they are first introduced—think thalidomide (loc. 6038), and even cigarettes, which were once recommended by doctors [loc. 5986]).
When it comes to explaining why doctors and other health professionals are so eager to administer medical treatments when these are not really necessary (and where the risk of iatrogenics is therefore at its highest), there are several factors that help explain this. Top of the list is a widespread disdain and even phobia of any and all discomfort, and the inability to recognize that it has its benefits (loc. 1285, 6022). But there are other, more sinister factors at play here. One of these factors has to do with the doctor’s bottom line: the fact is that in most cases doctors are paid to treat patients (not send them home without it), and the more expensive and involved the treatment is, the more the doctor gets paid (loc. 2168, 6148) (Taleb has some advice to help overcome this bias: “never ask the doctor what you should do. Ask him what he would do if he were in your place. You would be surprised at the difference” (loc. 6877).
The doctor’s bottom line is not the only one that is in play here. As Taleb explains, “pharmaceutical companies are under financial pressures to find diseases and satisfy the security analysts. They have been scraping the bottom of the barrel, looking for disease among healthier and healthier people, lobbying for reclassifications of conditions, and fine-tuning sales tricks to get doctors to overprescribe” (loc. 6076). The legal system is also at fault, for it is set up to penalize lack of treatment, and therefore incentivizes unnecessary interventions (loc. 6129-31).
The medical profession is not the only industry wherein iatrogenices rears its head. Indeed, Taleb maintains that some iatrogenics will be found wherever intervention in a complex system is practised (loc. 2184). This includes “political science, economics, urban planning, education, and more domains” (loc. 2182) (as we shall see below).
b. How to Take Care of a Body
While Taleb is opposed to seeking out medical treatment in those cases where you are not very ill, he certainly advises it in cases where you are. In fact, the author recommends submitting to ever more risky and untested procedures the more dire the case. As Taleb puts it, “the iatrogenics is in the patient, not in the treatment. If the patient is close to death, all speculative treatments should be encouraged—no holds barred. Conversely, if the patient is near healthy, then Mother Nature should be the doctor” (loc. 6081).
The strategy of not interfering (or not taking any risks) when there is little to gain, but possibly much to lose, while taking big risks (or many small risks) in cases where there is potentially much to gain, but very little to lose, Taleb calls barbelling (due to its being a bimodal, or two-pronged strategy [loc. 2963]), and it is a general strategy that the author advises practising wherever possible (we will return to this topic below).
Outside of barbelling when it comes to medical treatments, there are a few other pointers that Taleb gives when it comes to health, strength and fitness. Most of these we have already touched on above. They involve subjecting the body to random stressors (preferably as close to the body’s breaking-point as possible), including periodically keeping the body from the necessities longer than it is accustomed to.
When it comes to exercise, for instance, Taleb recommends the maximum-lifts approach, preferably using natural and irregularly shaped objects such as large stones (a la Rocky IV—I’ve included the footage below for some inspiration) (loc. 1469, 4377, 7081). Here is Taleb’s advice: “work on the maximum, spend the rest of the time splurging on mafia-sized steaks. I have been trying to push my limit for four years now; it is amazing to see how something in my biology anticipates a higher level than the past maximum—until it reaches its ceiling” (loc. 1009). Taleb is also a big fan of walking as a form of exercise (preferably at a leisurely pace, on an irregular surface and with barefoot shoes [loc. 6573, 5592-99]) as this is the most natural and time-tested exercise there is (loc. 6576).
When it comes to diet, Taleb recommends sticking to those things that were to be found in the environment in which we evolved (vegetables, fruit, meat, water…), as well as those things that have been around for a very long time (cheese, wine, coffee…) (loc. 6430, 6446). Also, Taleb advises mixing up one’s food choices as much as possible, periodically abstaining from particular options for stretches at a time (loc. 4914-19, 6490-98). Periodic abstinence is particularly important when it comes to protein, since the kill was much more irregularly achieved in our natural environment than finding some salad-yielding shrub to graze on (loc. 6514). Oh, and some activity should be engaged in before breaking the overnight fast: “let us not forget that we are not designed to be receiving foods from the delivery person. In nature, we had to expend some energy to eat” (loc. 6558). And speaking of fasting, Taleb certainly recommends this occasionally (loc. 6531).
Practicing an antifragile approach to exercise and diet should render us strongly immune to most minor ailments—and better able to recover from them when they do arise. Should something nasty persist, though, Taleb recommends that it be approached by way of cutting out something that you already do or consume (preferably starting with those things that are newer, or that were not around in our ancestral environment [loc. 6430-34]), rather than adding anything new (such as a medicine or medical procedure) (loc. 5989, 6403-11, 6472).
When it comes to technology and innovation there is a widespread belief that it flows directly from scientific discovery. In other words, the direction of travel is from the theoretical to the practical. As Taleb explains, “most texts define [technology] as the application of scientific knowledge to practical projects—leading us to believe in a flow of knowledge going chiefly, even exclusively, from lofty ‘science’… to lowly practice… in the corpus, knowledge is presented as derived in the following manner: basic research yields scientific knowledge, which in turn generates technologies, which in turn lead to practical applications, which in turn lead to economic growth and other seemingly interesting matters” (loc. 3506).
For Taleb, though, this model (which he calls the Baconian linear model [“after the philosopher of science Francis Bacon” (loc. 3505)]) is almost entirely backwards. Indeed, for the author, the vast majority of technological innovation, now as ever, has come from practitioners and engineers tinkering with objects, improving on them, and coming up with ideas to solve their practical difficulties. There are exceptions to this, to be sure, but the rule nevertheless holds in most cases. As Taleb explains, “while [the Baconian linear] model may be valid in some very narrow (but highly advertised instances), such as building the atomic bomb, the exact reverse seems to be true in most of the domains I’ve examined” (loc. 3513).
Beginning in the distant past, consider ancient architecture. There is a tendency to believe that Euclidian geometry allowed for this. That the geometry came first, and the magnificent buildings followed in its wake (loc. 3959). As Taleb points out, though, this is not at all how it happened. As evidence of this, the author invites us to “take a look at Vitruvius’ manual, De architectura, the bible of architects, written about three hundred years after Euclid’s Elements. There is little formal geometry in it, and, of course, no mention of Euclid, mostly heuristics, the kind of knowledge that comes out of a master guiding his apprentices. (Tellingly, the main mathematical result he mentions is Pythagoras’s theorem, amazed that the right angle could be formed ‘without the contrivances of the artisan.’)” (loc. 3973).
Even the wondrous Roman aqueducts appear to have been created out of practical know-how, as opposed to applied mathematics. As Taleb explains, “we are quite certain that the Romans, admirable engineers, built aqueducts without mathematics (Roman numerals did not make quantitative analysis very easy)” (loc. 3968). Even later, by the time the middle ages rolled around, architecture and engineering were still advancing by way of practical experimentation, rather than the application of theory. As the author explains, “according to the medieval science historian Guy Beaujouan, before the thirteenth century no more than five persons in the whole of Europe knew how to perform a division… But builders could figure out the resistance of materials without the equations we have today—buildings that are, for the most part, still standing. The thirteenth-century French architect Villard de Honnecourt documents… how cathedrals were built: experimental heuristics, small tricks and rules… For instance, a triangle was visualized as the head of a horse” (loc. 3961-66).
Skipping ahead to the Industrial Revolution, the worlds of science and innovation were largely separated even then. As Taleb points out, most innovations of the Industrial Revolution were made not by scientists but by hobbyists and rectors plodding about in their workshops (loc. 4035-47, 4055). This includes even the most notable inventions of the age: “take… the steam engine, the one artifact that more than anything else embodies the Industrial Revolution… [Terence] Kealey presents a convincing—very convincing—argument that the steam engine emerged from pre-existing technology and was created by uneducated, often isolated men who applied practical common sense and intuition to address the mechanical problems that beset them, and whose solutions would yield obvious economic reward” (loc. 4069).
The same can be said of the most important textile technologies of the day—such as the flying shuttle, the spinning jenny, the spinning frame, and the water frame (loc. 4071). “‘These major developments in textile technology… presaged the Industrial Revolution’” Kealey explains, “‘yet they owed nothing to science; they were empirical developments based on the trial, error, and experimentation of skilled craftsmen who were trying to improve the productivity, and so the profits, of their factories’” (loc. 4073).
Even today, in the age of big science, Taleb argues, the trend in innovation continues to favor experimentation and trial and error engineering over applied science—even though the textbooks often say otherwise (loc. 3853, 3943). But this last is entirely understandable given that it is the academics and pure science types that are writing the textbooks (loc. 426, 503, 3922-36, 4257).
To begin with, consider the therapeutic revolution, “the period in the postwar years that saw a large number of effective therapies [introduced]” (loc. 4132). As Taleb explains, this revolution “was not ignited by a major scientific insight. It came from the exact opposite, ‘the realization by doctors and scientists that it was not necessary to understand in any detail what was wrong, but that synthetic chemistry blindly and randomly would deliver remedies that had eluded doctors for centuries’” (loc. 4132) (the last portion of this quote comes from the doctor and medicine writer James Le Fanu [loc.4131]).
Even fields as technical as jet engineering lean towards trial-and-error tinkering. As Taleb explains, the Rutgers professor “[Phil] Scranton showed that we have been building and using jet engines in a completely trial-and-error experiential manner, without anyone truly understanding the theory. Builders need the original engineers who knew how to twist things to make the engine work. Theory came later, in a lame way, to satisfy the intellectual bean counter. But that’s not what you tend to read in standard histories of technology: my son, who studies aerospace engineering, was not aware of this” (loc. 3943).
Even when directed science and theory does have some role to play in innovation, such as computer science, it is often a random and undirected unfolding of contributions that is responsible for the specific evolution of the technology (loc. 4004, 4018). For instance, when the computer was first invented it had few practical uses (loc. 4009) until the keyboard and screen monitor came along, at which time “the computer took off because of its fitness to word processing, particularly with the microcomputer in the early 1980’s” (loc. 4011). Then the internet entered the picture (which was actually invented for an entirely different purpose than it is now being used [loc. 4013]), and the end result is what we have now (loc. 4015).
The upshot: “although science was of some use along the way since computer technology relies on science in most of its aspects; at no point did academic science serve in setting its direction, rather it served as a slave to chance discoveries in an opaque environment, with almost no one but college dropouts and overgrown high school students along the way. The process remained self-directed and unpredictable at every step” (loc. 4020).
All of this goes to show that technological progress is (for the most part) a bottom-up process that proceeds by practical, hands-on tinkering and experimentation (very much like evolution), rather than being a top-down, theory driven phenomenon. This has implications in terms of how the government should approach funding innovation, and also how private investors should invest in it.
With regards to the former, as it is now, much of government funding is channeled toward pure science and directed research (loc. 423, 1290, 3503-08). For Taleb, though, government funding should be geared towards more practical engineering, and open (essentially undirected) experimentation. As Taleb explains, “I do not believe that… no money should be spent by government. This reasoning is more against teleology than research in general. There has to be a form of spending that works… innovations drift, and one needs flaneur-like abilities to keep capturing the opportunities that arise, not stay locked up in a bureaucratic mold… visibly the money should go to the tinkerers, the aggressive tinkerers who you trust will milk the option” (loc. 4101).
The advice is the same when it comes to private investors. Since you can never know where the next innovation will come from, you should spread your resources thinly across many different ventures. As Taleb explains, “the right approach requires a certain style of blind funding. It means the right policy would be what is called ‘one divided by n’ or ‘1/N’ style, spreading attempts in as large a number of trials as possible: if you face n options, invest in all of them in equal amounts. Small amounts per trial, lots of trials… As one venture capitalist told me: ‘The payoff can be so large you can’t afford not to be in everything.’” (loc. 4108).
Like both the body and technological innovation, the business world too is very much subject to (and works best when it adheres to) organic and evolutionary principles. We may think of individual businesses as organisms, industries as species, and the conglomerate of all industries as nature itself.
Take the restaurant industry as an example. Restaurants compete for our attention (and appetites), and only the best survive. Indeed, as Taleb points out, “restaurants, being vulnerable, go bankrupt every minute” [loc. 1516; see also loc. 1336]). But the vulnerability of the individual restaurants—as well as the selection process—leads to a stable and vibrant restaurant industry (loc. 1342).
It is important to note that failed restaurants are every bit as important as successful ones—in fact more so, since there will necessarily be many more failures than successes, and the more failed attempts, the more the industry will learn from the failures and progress (loc. 1579-99). It is for this reason that Taleb thinks we ought to celebrate failed entrepreneurs: “in order to progress, modern society should be treating ruined entrepreneurs in the same way we honor dead soldiers, perhaps not with as much honor, but using exactly the same logic… My dream… is that we would have a National Entrepreneur Day, with the following message: Most of you will fail, disrespected, impoverished, but we are grateful for the risks you are taking and the sacrifices you are making for the sake of the economic growth of the planet and pulling others out of poverty. You are at the source of our antifragility. Our nation thanks you” (loc. 1600).
It may be unfortunate that individual restaurants must die off, but again, the industry cannot really flourish in any other way. As Taleb explains, “restaurants are fragile; they compete with each other, but the collective of local restaurants is antifragile for that very reason. Had restaurants been individually robust, hence immortal, the overall business would be either stagnant or weak, and would deliver nothing better than cafeteria food—and I mean Soviet-style cafeteria food. Further, it would be marred with systemic shortages, with, once in a while, a complete crisis and government bailout” (loc. 1342).
As the last part of the quote makes clear, the restaurant industry works best when it is allowed to unfold organically, through the efforts of individual restauranteers. A centrally planned system simply cannot be as responsive, for it denies the effect of stressors (as numerous failed experiments of the 20th century attest to [loc. 2437-48]).
This is not to say that the government has not part to play in business, though. Indeed, Taleb maintains that government does have a role in regulating business, and that is by ensuring that no one company grows too large (loc. 2277) (specifically, so large that it is ‘too big to fail,’ such that it would draw a bailout should it fall [loc. 1521, 6907]). At the moment, Taleb argues, governments tend to do the exact opposite, imposing policies that strengthen large corporations at the expense of smaller companies (loc. 1521).
Limiting the size of companies needn’t be handled by way of imposing draconian measures (such as physically breaking them up); rather, Taleb posits that it ought to be approached by way of introducing simple incentives. As the author explains in a note, “my suggestion to deter ‘too big to fail’… is as follows. A company that is classified as bailable out should it fail should not be able to pay anyone more than a corresponding civil servant. Otherwise people should be free to pay each other what they want since it does not affect the taxpayer. Such limitation would force companies to stay small enough that they would not be considered for a bailout in the event of their failure” (loc. 7186).
By stepping in to limit the size of companies, the government would not only be protecting society from their fall, but also protecting these companies from themselves. Indeed, Taleb maintains that companies actually grow more fragile as they grow larger. This is contrary to prevailing opinion, which sees mega-mergers as the way forward (due to the benefits of economies of scale [loc. 4951-53]). For Taleb, though, this is a simple case of iatrogenics, for the disadvantages of size outweigh the benefits. To begin with, whenever a company grows large enough that its managements is separate from its ownership, it’s going to run into problems, for in these cases the interests of those running the show are separate from what is good for the company itself (loc. 7026). Taleb refers to this as the agency problem (loc. 2167, 5043).
At the core of the agency problem in the business world is that it does not really matter a lick to the management team if the business implodes: “implosion… does not matter to the managers—because of the agency problem, their allegiance is to their own cash flow. They will not be harmed by subsequent failures; they will keep their bonuses, as there is currently no such thing as negative manager compensation. In sum, corporations are so fragile, long-term, that they eventually collapse under the weight of the agency problem, while managers milk them for bonuses and ditch the bones to the taxpayers” (loc. 7161).
Exacerbating the matter is that each additional layer of management you add, the more bureaucratic a company becomes. And bureaucracy is anathema to practical tweaking and adaptation (which is necessary for survival and growth) (loc. 1808, 4181-89, 6904-10). Thus each additional layer of management hastens a company’s implosion. The numbers bare this out. As Taleb explains, “the numbers show, at best, no gain from such increase in [company] size—that was already true in 1978, when Richard Roll voiced the ‘hubris hypothesis,’ finding it irrational for companies to engage in mergers given their poor historical record. Recent data, more than three decades later, still confirm both the poor record of mergers and the same hubris as managers seem to ignore the bad economic aspect of the transaction” (loc. 4956).
Truth be told, Taleb argues, it is only the powerful lobbying industry that keeps corporations from imploding sooner, for lobbying ensures that corporations maintain an unfair advantage in the marketplace (loc. 7162).
And so on to economics. We have already touched upon a few economic issues in our discussions of business and technology. Specifically, we have seen how Taleb generally opposes interfering with the economic realm—except to limit individual businesses to a size such that they are kept from threatening society (and themselves). (Actually, there is one other area wherein Taleb thinks it is choiceworthy for the government to interfere in the economy, and that is in supporting and helping the poorest of the poor [but certainly not the middle class] [loc. 1576, 3042]. The reason for this is that the author does think it is important to give the individual their due respect (loc. 1555-76, 3682), and the practice also has several beneficial practical effects—such as limiting severe inequality in society [loc. 3042, 3679]).
In any event, let us return to the issue of limiting the size of businesses. For Taleb, the main goal here is to ensure that mistakes and failures are kept local, and are prevented from have cascading effects. As the author explains, “good systems… are set up to have small errors, independent from each other—or, in effect, negatively correlated to each other, since mistakes lower the odds of future mistakes” (loc. 1467; see also 1521). This is particularly important in the case of banks, since their business blankets society, and hence bank crashes (when banks are large) are especially harmful (loc. 1467, 4977, 5152-60).
And this brings us to the topic of crashes. For Taleb, the size of companies (especially banks) is only part of the issue here. The other part of the equation has to do with our interfering with the business cycle; specifically, our desire to remove the boom and bust, and create a more regular, docile upward trend in the economy. If there were ever a case in point that demonstrates how interfering in a complex system—and attempting to remove the shocks and randomness—leads to disaster, it is the economy. As Taleb explains, “attempts to eliminate the business cycle lead to the mother of all fragilities. Just as a little bit of fire here and there gets rid of the flammable material in a forest, a little bit of harm here and there in an economy weeds out the vulnerable firms early enough to allow them to ‘fail early’ (so they can start again) and minimize the long-term damage to the system” (loc. 2250).
As an example we need look no further than the latest economic crash: “a main source of the economic crisis that started in 2007 lies in the iatrogenics of the attempt by Uberfragilista Alan Greenspan—certainly the top economic iatrogenist of all time—to iron out the ‘boom-bust cycle’ which caused risks to go hide under the carpet and accumulate there until they blew up the economy… The same naive interventionism was also applied by the U.K. government of Fragilista Gordon Brown, a student of the Enlightenment whose overt grand mission was to ‘eliminate’ the business cycle” (loc. 2242).
For Taleb, another mistake in the economic realm is taking on debt (this applies both to governments and individuals [loc. 964, 1115, 2297, 2953]). The fact is that debt puts in you a vulnerable position, because you must now live on the creditor’s terms (loc. 7220), and are left with nothing to hold you up in case of an emergency (in other words, debt makes you very fragile [loc. 687, 964, 2297, 2567]). And debt not only makes you fragile to emergencies, but also invites them: “as to growth in GDP (gross domestic product), it can be obtained very easily by loading future generations with debt—and the future economy may collapse upon the need to repay such debt” (loc. 2953).
For Taleb, though, most of our economic missteps actually boil down to a deeper, more fundamental cause. And that is that non-practitioners, meaning academic economists, are being invited to make our economic decisions for us, and are relied upon for their predictions (loc. 3798, 6755, 6846). There are two problems with this approach. To begin with, academic economists are enamored with theories (loc. 431, 2214-17, 7949). Indeed, they respect theories much more than time-tested experience and practice, and so trust them, and try to implement them at every step. The problem is that theories are much more fragile than practice (loc. 2217, 3804), and so often lead to disaster (as we have seen).
This problem is allowed to fester because of an even deeper problem: academic economists might think the better of their ways if they actually had skin in the game. That is, if they actually stood to lose something from their shattered theories; but, sadly, this is not how it is. They stand in their ivory towers, with their tenured positions (either in universities or in government [loc. 2024, 6712), and are largely unaffected by what goes on below them (loc. 6836-51, 6859, 6869-74). What’s more, they are very adept at contorting the truth, particularly the past, so when one of their theory-led practises does lead to disaster, they can manipulate things to make it look like it was not their fault, and even that they saw it coming in the first place (loc. 6836-44).
Take Joseph Stiglitz, for instance. As Taleb points out, early in the 2000’s, “Joseph Stiglitz, with two colleagues, the Orszag brothers (Peter and Jonathan), looked at... Fannie Mae. They assessed, in a report, that ‘on the basis of historical experience, the risk to the government from a potential default on GSE debt is effectively zero.’... They also said that the probability of a default was found to be ‘so small that it is difficult to detect’” (loc. 6832). For Taleb, statements like these reflect the fact that Stiglitz (and other academic economists like him), have no concept of fragility in economic systems; and, what’s worse, these types of statements also invite others into the same trap, and encourage behaviour that actually precipitates crashes (loc. 6835-42, 6848).
So, did Stiglitz take his share of the blame for precipitating the crash of 2007? Nope. He wrote a book detailing how he saw it coming all along: “the culmination is that Stiglitz writes in 2010 in his I-told-you-so book that he claims to have ‘predicted’ the crisis that started in 2007-2008... So the very same economist who caused the problem then postdicted the crisis, and then became a theorist on what happened. No wonder we will have larger crises” (loc. 6842).
Now, for Taleb, it is not the case that Stiglitz was lying in his 2010 book (loc. 6850); It’s just that he actually deceived himself into thinking that he saw the crash coming all along (loc. 6860). And the reason he was able to deceive himself is that he didn’t lose anything from the crash, because he didn’t have any skin in the game; that is, no money on the line. If he had, he would have noticed where he went wrong: “an academic is not designed to remember his opinions because he doesn’t have anything at risk from them... The central point: had Stiglitz been a businessman with his own money on the line, he would have blown up, terminated” (loc. 6842).
For Taleb, absence of skin in the game (which ultimately leads to a transfer of fragility from one party to another [loc. 6633]) is not a problem that is confined to economists. Rather, it is a general and severe problem that touches many different professions (loc. 6633, 6641, 6710). As the author explains, “the effects of transfers of fragility are becoming more acute, as modernity is building up more and more… inverse heroes, so to say. So many professions, most arising from modernity, are affected, becoming more antifragile at the expense of our fragility—tenured government employees, academic researchers, journalists (of the non-myth-busting variety), the medical establishment, Big Pharma, and many more” (loc. 6712). For Taleb, the problem is particularly acute in the modern world (loc. 383, 6742, 6755) due largely to the significant amount of specialization that we have in society (which specialization effectively separates decision-makers from the effects of their decisions) (loc. 6755, 6821).
Nevertheless, this does not mean that we are helpless to minimize the problem. Indeed, Taleb maintains that many simple measures can and should be taken here (loc. 6721-30). Essentially, it boils down to this: arrange things such that decision-makers are put in a position that they feel the consequences of their decisions and actions (loc. 6720-33, 7178), and only trust those where this is the case. In the case of economists, for instance, only those should be trusted who have stock portfolios that match up with their opinions (loc. 6731, 6872).
a. Absence of Skin in the Game among Politicians and Civil Servants
Given that we have just come from discussing the importance of having skin in the game (and the dangers of an absence of skin in the game), it is fitting that we continue with this theme to open our discussion of politics—since, for Taleb, it is also of great significance here.
Take waging war for starters. As Taleb points out, rulers once went to war with their armies. In fact, many of these rulers led their armies into war—as in they were first to go in and the last to come out: “Caesar, Alexander, and Hannibal were on the battlefield—the last, according to Livy, was first-in, last-out of combat zones” (loc. 6758). Among other things, this ensured that rulers felt the consequences of their war-waging. Today, while many heads of state remain the commander in chief of their countries, they do not touch the battlefield. As the author points out, rulers of old went to battle, “unlike Ronald Regan and George W. Bush, who played video games while threatening the lives of others” (loc. 6760). As the quote suggests, going to war without any skin in the game makes leaders prone to making rash and ill-advised decisions—thus creating a much more dangerous world.
Not only do those in government often have nothing much to lose from their decisions and actions, but institutions are now often arranged in such a way they that civil servants can even benefit at the expense of the state. For example, politicians in America routinely leave politics to accept million-dollar jobs in the banking industry: “in African countries, government officials get explicit bribes. In the United States they have the implicit, never mentioned, promise to go work for a bank at a later date with a sinecure offering, say $5 million a year, if they are seen favorably by the industry. And the ‘regulations’ of such activities are easily skirted” (loc. 7326).
Some even leave politics only to launch schemes that take advantage of loop holes in the legal system (which these scam artists have figured out during their time ‘serving’ the state). Taleb refers to this as the Alan Blinder problem, after the ex civil servant Alan Blinder, who ran a scheme that “allow[ed] the super-rich to scam taxpayers by getting free government-sponsored insurance. Yes, scam taxpayers. Legally. With the help of former civil servants who have an insider edge” (loc. 7302).
While the modern world makes it very difficult to eradicate the lack of skin in the game on the part of decision-makers and public servants, Taleb maintains that small measures can be taken to minimize it. For example, Taleb is a fan of a rule advocated by Ralph Nader: “people voting for war need to have at least one descendant (child or grandchild) exposed to combat” (loc. 6727). When it comes to preventing public office from being used as a means to an end, Taleb recommends the following: “a simple solution, but quite drastic: anyone who goes into public service should not be allowed to subsequently earn more from any commercial activity than the highest paid civil servant. It is like a voluntary cap (it would prevent people from using public office as a credential-building temporary accommodation, then going to Wall Street to earn several million dollars). This would get priestly people into office” (loc. 7291).
b. General Recommendations to Improve Politics
On a more general level, Taleb recommends that politics ought to be approached like most complex systems: from the inside, relying more on tweaks of traditional systems than grand theories. The strategy advocated by Edmund Burke is a fitting model here. As Taleb explains, Burke “believed that large social variations can expose us to unseen effects and thus advocated the notion of small trial-and-error experiments (in effect… tinkering) in social systems, coupled with respect for the complex heuristics of tradition” (loc. 4601). It was this approach, Taleb argues, that the Romans followed: “the Romans got their political system by tinkering, not by ‘reason.’ Polybius in his Histories compares the Greek legislator Lycurgus, who constructed his political system while ‘untaught by adversity,’ to the more experiential Romans, who, a few centuries later, ‘have not reached it by any process of reasoning, but by the discipline of many struggles and troubles, and always choosing the best by the light of the experience gained in disaster.’” (loc. 3341).
As a general rule, though, Taleb maintains that political decision-making should be kept as local as possible; as opposed to decisions being imposed from some centralized body (loc. 1717-29). This is very much in keeping with the author’s bottom-up approach to complex systems (which, Taleb would be quick to point out, is an approach that is vindicated by experience, as opposed to being theoretical in nature [loc. 1717-29, 1849, 2455-89). This is not to say that, for Taleb, centralization has no part to play in politics. Indeed, as the author points out, experience shows that the absence of overarching political structures can lead to an overly chaotic situation (loc. 1858-65). So it is best to think of Taleb’s position on politics as being in favor of a kind of federalism, with the power skewed towards local authorities (loc. 1884).
11. Antifragility and Unpredictability: How to Live in an Unpredictable World
We have now seen how the concept of antifragility enters the realms of the body, technology, business, economics and politics. However, there are many more domains wherein the concept plays a part. Indeed, for Taleb, the concept has a role to play in virtually every complex system and phenomenon we can think of, and so touches virtually every aspect of life. One of the most important domains wherein antifragility is applicable is the general one of living in an unpredictable world.
For Taleb, the complex world—meaning the human world—is fundamentally unpredictable. Accordingly, Taleb writes that “Black Swans and tail events run the socioeconomic world—and these events cannot be predicted” (loc. 5446; see also 2519, 2547).
Here is Taleb to explain Black Swans:
The trick, according to Taleb, is not to spend our time trying to get better at predicting this world, or making it more predictable, for both of these strategies are bound to fail. Nevertheless, this does not mean that we need to submit to being at the whim of fortune. For we can use the concept of antifragility to help us navigate our way through the unpredictable world.
There are a few different ways that antifragility comes into play here. To begin with, we can parse systems and phenomenon based on just how fragile or antifragile they are, and place our confidence in them accordingly. This way, we needn’t predict any particular event in order to ensure success (loc. 2510, 4659). Rather, we let the unpredictable world play out however it will, and shelter ourselves beneath the cover of antifragile systems. As Taleb explains, “you cannot say with any reliability that a certain remote event or shock is more likely than another (unless you enjoy deceiving yourself), but you can state with a lot more confidence that an object or a structure is more fragile than another should a certain event happen. You can easily tell that your grandmother is more fragile to abrupt changes in temperature than you, that some military dictatorship is more fragile than Switzerland should political change happen, that a bank is more fragile than another should a crisis occur, or that a poorly built modern building is more fragile than the Cathedral of Chartres should an earthquake happen. And—centrally—you can even make the prediction of which one will last longer” (loc. 438).
Now, in some cases the relative antifragility of a system will be evident, while at other times it may require a bit more analysis. In general, a system will be antifragile to the extent that the harm that it experiences from random events is outstripped by the benefit that it experiences from them (particularly oversized random events) (loc. 4845, 4934, 5207). Things that are harmed more than benefited from random events Taleb calls concave, while systems that are benefited more than they are harmed he calls convex (due to the shape that they display when they are graphed) (loc. 4755, 4771, 4817-30). By putting our faith in the latter, and steering clear of the former (or, better yet, betting against it), we make ourselves antifragile. As Taleb explains, “the hidden benefit of antifragility is that you can guess worse than random and still end up outperforming... so you can be wrong and still do fine—the more uncertainty, the better. This explains my statement that you can be dumb and antifragile and still do very well” (loc. 5288). (This sounds far too easy, and simple, it’s true—and Taleb acknowledges this. But there it is, and Taleb insists it can be exploited no end...).
A recent and classic case of a fragile system is Fannie Mae in the early 2000’s. When Taleb looked at Fannie Mae’s own reports in 2003 he noticed the following: “a move upward in an economic variable led to massive losses, a move downward (in the opposite direction), to small profits. Further moves upward led to even larger additional losses and further moves downward to even smaller profits” (loc. 5144). The very definition of fragility (we can also see the concavity here). Taleb then noticed that the banks were in the same situation (loc. 5156). This being the case, Taleb went to the markets and made the appropriate wagers (loc. 5156). Here’s what happened next: “things happened as if they were planned by destiny. Fannie Mae went bust, along with other banks. It just took a bit longer than expected, no big deal” (loc. 5159).
Another way that we can antifragilize ourselves is by practising a barbell approach to risk. The barbell approach, as you will recall, is a two-pronged approach. In the field of risk management it involves taking no risks where the result of failure would be disastrous, while taking big risks (or at least many small risks) where failure would be relatively harmless, while the payoffs stand to be very large. As Taleb explains, “I initially used the image of the barbell to describe a dual attitude of playing it safe in some areas (robust to negative Black Swans) and taking a lot of small risks in others (open to positive Black Swans), hence achieving antifragility. That is extreme risk aversion on one side and extreme risk loving on the other, rather than just the ‘medium’ or the beastly ‘moderate’ risk attitude that in fact is a sucker game (because medium risks can be subjected to huge measurement errors)” (loc. 2967).
Let us take an example from the investment world. The barbell approach here would involve leaving the bulk of your money in very safe investments, while taking the rest and putting it in very risky, but potentially high-paying investments. As Taleb explains, “if you put 90 percent of your funds in boring cash (assuming you are protected from inflation) or something called ‘numeraire repository of value,’ and 10 percent in very risky, maximally risky, securities, you cannot possibly lose more than 10 percent, while you are exposed to massive upside. Someone with 100 percent in so-called ‘medium’ securities has a risk of total ruin from the miscomputations of risks” (loc. 2972).
One final way to increase your antifragility is by never painting yourself into a corner. That is, always try to make sure that you leave yourself open to options (loc. 3114). Go with what you know, and what works, but always leave yourself the option of changing course should an opportunity come up (loc. 3114). Taleb calls this optionality (loc. 3114). One way to achieve optionality is to never have a plan—or at least, never be committed to a plan (loc. 3103). For this leaves you unable to change course if an unforeseen opportunity should arise (loc. 3105).
This advice can be applied to businesses as well. As Taleb explains, “there is no evidence that strategic planning works—we even seem to have evidence against it. A management scholar, William Starbuck, has published a few papers debunking the effectiveness of planning—it makes the corporation option-blind, as it gets locked into a non-opportunistic course of action” (loc. 4185).
Conclusion: Why Nassim Nicholas Taleb Would Hate This Article
I enjoyed Taleb’s book, but Taleb would not like this article. This is not because the author would resent the effort, or think that the article is a poor summary of his book—quite the contrary. The problem is with the style. There is no randomness to speak of. Not a single digression. In other words, it is very clear that the article is the result of a plan—and a detailed plan at that. By contrast, Taleb’s book jumps around all over the place, and is stock full of digressions and asides. That is, it incorporates randomness. This is not the result of poor editing (as some have suggested). Rather, I suspect that Taleb has chosen this route for both aesthetic and instrumental reasons. The author simply enjoys randomness in all its forms (as has been made clear). What’s more, I am confident that he believes that, as complex creatures (with complex minds), we respond better to ideas when they are presented with some measure of randomness. That is, ideas sink in better when they are presented in a stochastic way. I am not convinced that this is true.
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