Antifragile – by Nassim Nicholas Taleb

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Antifragile – by Nassim Taleb

‘Things that gain from disorder’

 

Wind extinguishes a candle but energises fire. Likewise with randomness/uncertainty/chaos, you want to be able to use them, not to hide from them. You want to be the fire and wish for the wind.

Most people think the opposite of fragile is robust, resilient or solid. But the resilient and robust are items that neither break nor improve. The opposite of fragility should be negative fragility – there is not yet a word for it, so Taleb terms it ‘Antifragility’.

 

The central theme of the book is antifragility, which Nassim defines as:

“Some things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventure, risk, and uncertainty. Yet, in spite of the ubiquity of the phenomenon, there is no word for the exact opposite of fragile. Let us call it antifragile. Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better.”

Grab a copy of the book here: https://www.bookdepository.com/Antifragile/9780141038223/?a_aid=adamsbooks

1 -The benefits of being antifragile

A wind extinguishes a candle and energizes fire. Likewise with randomness, uncertainty, chaos You want to use them, not to hide from them. You want to be the fire and wish for the wind

Most people think the opposite of fragile is robust, resilient or solid, but the resilient and robust are items that neither break nor improve

Have you ever seen a package with the words ‘robust’ written on it?

The exact opposite of having fragile on the package would be  ‘please mishandle’ – the opposite of positive is negative, not neutral

The opposite of fragility should be negative fragility . This blind spot seems universal There is no word for it in any known languages.

The central theme of the book is antifragility, which Nassim defines as:

“Some things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventure, risk, and uncertainty. Yet, in spite of the ubiquity of the phenomenon, there is no word for the exact opposite of fragile. Let us call it antifragile. Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better.”

The two other phenomona laid out by Nassim is robustness and fragility.

Robustness

Remains the same during volatility

Fragile

What does not like volatility, and what does not like volatility does not like randomness, uncertainty, disorder, errors, stressors etc

If we want to benefit from volatility, then the best strategy is to be like Hydra.

Hydra in Greek mythology is a serpent like creature that dwells in the lake of Lerna, and has numerous heads. Each time one is cut off, two grow back, so harm is what it likes. Hydra represents antifragility

  1. Modern society looks to make things fragile, which goes against the style of mother nature

What do we call here modernity?  Taleb’s definition of modernity is human’s large scale domestication of the environment.

The systematic smoothing of the world’s jaggedness and stifling of it’s volatility and stressors 

The ‘fragilistas’ of society likes to turn us into that lion in the comfort and unpredictability of the local zoo compared to its cousins that live in freedom.

Because they mistake what they don’t know for the non-existent, they exhibit a strong — if mistaken — regard for the powers of reason. Frequently found wearing suits and spending a lot of time in meetings, they prefer to tinker with things they do not understand rather than doing nothing. According to Taleb, the problem with the fragilista is that they “make you engage in policies and actions, all artificial, in which the benefits are small and visible, and the side effects (are) potentially severe and invisible.”

Fragilista doctors are the guiltiest of them all

Not only are we averse to stressors, and don’t understand them, but we are committing crimes against life, the living, science and wisdom, for the sake of eliminating volatility and variation

Nassim feels angry when I think that one in ten Americans beyond the age of high school is on some kind of anti-depressant such as Prozac. Indeed when you go through mood swings, you now have to justify why you are NOT on some form of medication. There may be good reasons to be on medication, in severely pathological cases, but my mood, my sadness, my bouts of anxiety are a second source of intelligence – perhaps a first source.

Had Prozac been available last century, anything with a soul would have been silenced If large pharma companies were able to eliminate the seasons they probably would do so – with a profit of course.

Not only do these fragilistas hurt our vulnerable children of society, but also hurt the rest of us with unnoticed medical harm.

Every time you visit a doctor and get a treatment, you incur risks of medical harm  

The doctor who refrains from operating on a back (very expensive surgery) instead giving it a chance to heal itself, will not be rewarded or judged favourably as the doctor who makes the surgery look indispensable. Doctors need to justify their salaries and prove to themselves that they have a modicum of work ethic Something that ‘doing nothing’ doesn’t satisfy

Risks of harm by the healer can be overlooked that so depending on how you account for it, medicine had a largely negative balance sheet – going to the doctor increases your chance of death in some circumstances. Medical error currently kills between 3 – 10 times as many people as car accidents in the USA. The harm from doctors (not including hospital germs) accounts for more deaths than any single cancer

Harm lies in the denial of antifragility, the thought that we won’t get better.

The fragilista central banks

Fragility has a ratchet like property, the irreversibility of damage. As to growth in GDP, it can be obtained very easily by loading future generations with debt. And by engaging in QE the economy becomes more fragile and susceptible to bigger crisis when they happen

We didn’t get to where we are today because of policy makers, but thanks to the appetite for risks and errors of a certain class of people we need to encourage, protect and respect

  1. The fragile (banker), the robust (taxi-driver) and the antifragile (author) careers

Banker

A midlevel bank employee with a mortgage would be fragile to the extreme. He would be completely a prisoner of the value system that invites him to be corrupt to the core, because his dependence on the annual vacation at Barbados. With few exceptions, those who dress outrageously are robust or even anti-fragile in reputation. Those clean shaven types who dress in suits and ties are fragile to information about them.

Taxi-driver

The taxi driver has only had one day without a single fare, but has variable income. He moans that he does not have the same job security as the banker (his brother) But this is an illusion, he has a bit more. Artisans like taxi drivers, prostitutes, carpenters, plumbers, dentists have some volatility in their income but they are rather robust to a minor professional Black Swan – one that would bring their income to a complete hault

The taxi driver also has the freedom to continue until he drops (most people into their 80’s just to kill time)

Since he is is own boss, compared to the banker who is completely unhirable in his fifties

Author

And some professions are anti-fragile – like the author/podcaster/artist/some business owners

For these professions it is better to be controversial, It does not matter about the average outcome, only the favourable ones (since the downside doesn’t count beyond a certain point)

Authors, artists, and even philosophers are better off having a small number of fanatics behind them than a large number who apprecaite their work . The number of people who dislike your work don’t count – there is no such thing as the opposite of buying your book.  And this absence of negative domain for book sales provides the author with a measure of optionality

Don’t be mildly acceptable or commendable. Consider this simple heuristic your work and ideas are antifragile if instead of having 100% of people finding your mission acceptable or mildly commendable, you are better off having a high percentage of people disliking you and your message (even intensely), combined with a low percentage of loyal and enthusiastic supporters

Options like dispersion of outcomes and don’t care about the average too much

  1. Spot the option

Option = asymmetry + rationality

From our discussion on rationality, we see that the only intelligence that is needed is to accept what we have on our hands is better than what we had before

In other words to recognise the existence of the option (or exercise the option, to take advantage of a valuable alternative that is superior to what precedes it)

An option hides where we don’t want it to hide. Options benefit from variability but also from situations in which errors carry small costs. So these errors are like options, in the long run happy errors bring gains, unhappy errors bring losses

Us humans are typically option blind. They are in plain site:

E.g asking your boss for a pay-rise out of the blue

Boss might be neutral on you asking. Might even respect you… As the downside. But big upside potential in getting the raise

E.g going to parties has optionality

Going to parties has optionality, perhaps the best advice for someone who wants to benefit from uncertainty with low downside

E.g narrating the story and posting to Instagram has optionality

The one telling the story has the advantage of being able to show the confirmatory examples and completely ignore the rest – and  the more volatility and dispersion, the rosier the story will be (and the darker the worst story)

The right to pick and choose is only reporting what suits his purpose – you take upside of your story and hide the downside

  1. Errors are investments

Trial and error has one overriding value people fail ot understand … it is not really random.  Thanks to optionality it requires some rationality. One needs to be intelligent in recognising the favourable outcome and knowing what to discard

Optionality driven methods of search is not foolishly random, thanks to optionality, it becomes tamed and harvested randomness. When engaging in tinkering, you will incur a lot of small losses, then once in a while you will find something rather significant

Such methodology will show nasty attributes when seen from the outside In the antifragile case (positive black swan businesses), such as trial and error the sample track record will tend to underestimate the long term average – will hide the qualities not the defects.

Half invented/discovering ideas

It took 6000 years between the invention of the wheel and the brilliant implementation of some luggage maker in a drab industrial suburb. Billions or hours spent by travelers schlepping luggage through corridors. Worse, this took place 3 decades after we put man on the moon

The half invented 

There is a category of things that we can call half invented, and taking the half invented to the invented is the real breakthrough. Sometimes you need a visionary to figure out what to do with the discovery

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