fragility, randomness, antifragile, antifragility, risk experts, volatility, uncertainty, Nassim Nicholas Taleb
Antifragile: How to Live in a World We Don't Understand Author: Nassim Nicholas Taleb Extract I. HOW TO LOVE THE WIND Wind extinguishes a candle and energizes fire. Likewise with randomness, uncertainty, chaos: you want to use them, not hide from them. You want to be the fire and wish for the wind. This summarizes this author's nonmeek attitude to randomness and uncertainty. We just don't want to just survive uncertainty, to just about make it. We want to survive uncertainty and, in addition-- like a certain class of aggressive Roman Stoics-- have the last word. The mission is how to domesticate, even dominate, even conquer, the unseen, the opaque, and the inexplicable. How? II. THE ANTIFRAGILE 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. This property is behind everything that has changed with time: evolution, culture, ideas, revolutions, political system
s, technological innovation, cultural and economic success, corporate survival, good recipes (say, chicken soup or steak tartare with a drop of cognac), the rise of cities, cultures, legal system
s, equatorial forests, bacterial resistance . . . even our own existence as a species on this planet. And antifragility determines the boundary between what is living and organic (or complex), say, the human body
, and what is inert, say, a physical object
like the stapler on your desk. The antifragile loves randomness and uncertainty, which also means-- crucially-- a love of errors, a certain class of errors. Antifragility has a singular property of allowing us to deal with the unknown, to do things without understanding them-- and do them well. Let me be more aggressive: we are largely better at doing than we are at thinking, thanks to antifragility. I'd rather be dumb and antifragile than extremely smart and fragile, any time. It is easy to see things around us that like a measure of stressors and volatility: economic systems, your body, your nutrition (diabetes and many similar modern ailments seem to be associated with a lack of randomness in feeding and the absence of the stressor of occasional starvation), your psyche. There are even financial contracts that are antifragile: they are explicitly designed to benefit from market volatility.
Antifragility makes us understand fragility better. Just as we cannot improve health without reducing disease, or increase wealth without first decreasing losses, antifragility and fragility are degrees on a spectrum. Nonprediction By grasping the mechanisms of antifragility we can build a systematic and broad guide to nonpredictive decision making under uncertainty in business, politics, medicine, and life in general-- anywhere the unknown preponderates, any situation in which there is randomness, unpredictability, opacity, or incomplete understanding of things. It is far easier to figure out if something is fragile than to predict the occurrence of an event that may harm it. Fragility can be measured; risk is not measurable (outside of casinos or the minds of people who call themselves 'risk experts'). This provides a solution to what I've called the Black Swan problem-- the impossibility of calculating the risks of consequential rare events and predicting their occurrence. Sensitivity to harm from volatility is tractable, more so than forecasting the event that would cause the harm. So we propose to stand our current approaches to prediction, prognostication, and risk management
on their heads. In every domain or area of application, we propose rules for moving from the fragile toward the antifragile, through reduction of fragility or harnessing antifragility. And we can almost always detect antifragility (and fragility) using a simple test of asymmetry: anything that has more upside than downside from random events (or certain shocks) is anti-fragile; the reverse is fragile. Deprivation of Antifragility Crucially, if antifragility is the property of all those natural (and complex) systems that have survived, depriving these systems of volatility, randomness, and stressors will harm them. They will weaken, die, or blow up. We have been fragilizing the economy, our health, political life, education, almost everything . . . by suppressing randomness and volatility. Just as spending a month in bed (preferably with an unabridged version of WAR AND PEACE
and access to The Sopranos' entire eighty-six episodes) leads to muscle atrophy, complex system
s 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 the most. If about everything top- down fragilizes and blocks antifragility and growth, everything bottomup 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
. Upside at the Expense of Others Which brings us to the largest fragilizer of society, and greatest generator of crises, absence of 'skin in the game.' Some become antifragile at the expense of others by getting the upside (or gains) from volatility, variations, and disorder and exposing others to the downside risk
s of losses or harm. And such antifragility- at- the- cost- of- fragility- of- others is hidden-- given the blindness to antifragility by the Soviet- Harvard intellectual circles, this asymmetry is rarely identified and (so far) never taught. Further, as we discovered during the financial crisis
that started in 2008, these
blow-up risks- to-others are easily concealed owing to the growing complexity of modern institutions and political affairs. While in the past people of rank or status were those and only those who took risks, who had the downside for their actions, and heroes were those who did so for the sake of others, today the exact reverse is taking place. We are witnessing the rise of a new class of inverse heroes, that is, bureaucrats, bankers, Davos- attending members of the I.A.N.D. (International Association of Name Droppers), and academics with too much power and no real downside and/or accountability. They game the system while citizens pay the price. At no point in history have so many non-risk-takers, that is, those with no personal exposure
, exerted so much control. The chief ethical rule is the following: Thou shalt not have anti-fragility at the expense of the fragility of others.