Read Antifragile: Things That Gain from Disorder Online
Authors: Nassim Nicholas Taleb
Antifragile: Things That Gain from Disorder (6 page)
After more than twenty years as a transactional trader and businessman in what I called the “strange profession,” I tried what one calls an academic career. And I have something to report—actually that was the driver behind this idea of antifragility in life and the dichotomy between the
natural
and the alienation of the
unnatural
. Commerce is fun, thrilling, lively, and natural; academia as currently professionalized is none of
these. And for those who think that academia is “quieter” and an emotionally relaxing transition after the volatile and risk-taking business life, a surprise: when in action, new problems and scares emerge every day to displace and eliminate the previous day’s headaches, resentments, and conflicts. A nail displaces another nail, with astonishing variety. But academics (particularly in social science) seem to distrust each other; they live in petty obsessions, envy, and icy-cold hatreds, with small snubs developing into grudges, fossilized over time in the loneliness of the transaction with a computer screen and the immutability of their environment. Not to mention a level of envy I have almost never seen in business.… My experience is that money and transactions purify relations; ideas and abstract matters like “recognition” and “credit” warp them, creating an atmosphere of perpetual rivalry. I grew to find people greedy for credentials nauseating, repulsive, and untrustworthy.
Commerce, business, Levantine souks (though not large-scale markets and corporations) are activities and places that bring out the best in people, making most of them forgiving, honest, loving, trusting, and open-minded. As a member of the Christian minority in the Near East, I can vouch that commerce, particularly small commerce, is the door to tolerance—the only door, in my opinion, to any form of tolerance. It beats rationalizations and lectures. Like antifragile tinkering, mistakes are small and rapidly forgotten.
I want to be happy to be human and be in an environment in which other people are in love with their fate—and never, until my brush with academia, did I think that that environment was a certain form of commerce (combined with solitary scholarship). The biologist-writer and libertarian economist Matt Ridley made me feel that it was truly the Phoenician trader in me (or, more exactly, the Canaanite) that was the intellectual.
4
Antifragile
is composed of seven books and a notes section.
Why “books”? The novelist and essayist Rolf Dobelli’s first reaction upon reading my ethics and
via negativa
chapters, which I supplied separately, was that each should be a separate book and published as a short or medium-length essay. Someone in the business of “summarizing” books would have to write four or five separate descriptions. But I saw that they were not stand-alone essays at all; each deals with the applications of a central idea, going either deeper or into different territories: evolution, politics, business innovation, scientific discovery, economics, ethics, epistemology, and general philosophy. So I call them books rather than sections or parts. Books to me are not expanded journal articles, but reading experiences; and the academics who tend to read in order to cite in their writing—rather than read for enjoyment, curiosity, or simply because they like to read—tend to be frustrated when they can’t rapidly scan the text and summarize it in one sentence that connects it to some existing discourse in which they have been involved. Further, the essay is the polar opposite of the textbook—mixing autobiographical musings and parables with more philosophical and scientific investigations. I write about probability with my entire soul and my entire experiences in the risk-taking business; I write with my scars, hence my thought is inseparable from autobiography. The personal essay form is ideal for the topic of incertitude.
The sequence is as follows.
The Appendix to this prologue presents the Triad as a table, a comprehensive map of the world along the fragility spectrum.
Book I,
The Antifragile: An Introduction
, presents the new property and discusses evolution and the organic as the typical antifragile system. It also looks at the tradeoff between the antifragility of the collective and the fragility of the individual.
Book II,
Modernity and the Denial of Antifragility
, describes what happens when we starve systems—mostly political systems—of volatility. It discusses this invention called the nation-state, as well as the idea of harm done by the healer, someone who tries to help you and ends up harming you very badly.
Book III,
A Nonpredictive View of the World
, introduces Fat Tony and his intuitive detection of fragility and presents the foundational
asymmetry of things grounded in the writings of Seneca, the Roman philosopher and doer.
Book IV,
Optionality, Technology, and the Intelligence of Antifragility
, presents the mysterious property of the world, by which a certain asymmetry is behind things, rather than human “intelligence,” and how optionality drove us here. It is opposed to what I call the Soviet-Harvard method. And Fat Tony argues with Socrates about how we do things one cannot quite explain.
Book V,
The Nonlinear and the Nonlinear
(
sic
), is about the philosopher’s stone and its opposite: how to turn lead into gold, and gold into lead. Two chapters constitute the central technical section—the plumbing of the book—mapping fragility (as nonlinearity, more specifically, convexity effects) and showing the edge coming from a certain class of convex strategies.
Book VI,
Via Negativa
, shows the wisdom and effectiveness of subtraction over addition (acts of omission over acts of commission). This section introduces the notion of convexity effects. Of course the first application is to medicine. I look at medicine only from an epistemological, risk-management approach—and it looks different from there.
Book VII,
The Ethics of Fragility and Antifragility
, grounds ethics in transfers of fragility, with one party getting the benefits and the other one the harm, and points out problems arising from absence of skin in the game.
The end of the book consists of graphs, notes, and a technical appendix.
The book is written at three levels.
First, the literary and philosophical, with parables and illustrations but minimal if any technical arguments, except in
Book V
(the philosopher’s stone), which presents the convexity arguments. (The enlightened reader is invited to skip
Book V
, as the ideas are distilled elsewhere.)
Second, the appendix, with graphs and more technical discussion, but no elaborate derivations.
Third, the backup material with more elaborate arguments, all in the form of technical papers and notes (don’t mistake my illustrations and parables for proof; remember, a personal essay is not a scientific document, but a scientific document is a scientific document). All these backup documents are gathered as a freely available electronic technical companion.
1
Outside of casinos and some narrowly defined areas such as man-made situations and constructions.
2
Hayek did not take his idea about organic price formation into risk and fragility. For Hayek, bureaucrats were inefficient, not fragilistas. This discussion starts with fragility and antifragility, and gets us as a side discussion into organic price formation.
3
The technical term I used for “hates volatility” was “short vega” or “short gamma,” meaning “harmed should volatility increase,” and “long vega” or “long gamma” for things that benefit. In the rest of the book we will use “short” and “long” to describe negative and positive exposures, respectively. It is critical that I never believed in our ability to forecast volatility, as I just focused on how things react to it.
4
Once again, please, no,
itisnotresilience
. I am used to facing, at the end of a conference lecture, the question “So what is the difference between robust and antifragile?” or the more unenlightened and even more irritating “Antifragile is resilient, no?” The reaction to my answer is usually “Ah,” with the look “Why didn’t you say that before?” (of course I had said that before). Even the initial referee of the scientific article I wrote on defining and detecting antifragility entirely missed the point, conflating antifragility and robustness—and that was the scientist who pored over my definitions. It is worth re-explaining the following: the robust or resilient is neither harmed nor helped by volatility and disorder, while the antifragile benefits from them. But it takes some effort for the concept to sink in. A lot of things people call robust or resilient are just robust or resilient, the other half are antifragile.
Now we aim—after some work—to connect in the reader’s mind, with a single thread, elements seemingly far apart, such as Cato the Elder, Nietzsche, Thales of Miletus, the potency of the system of city-states, the sustainability of artisans, the process of discovery, the onesidedness of opacity, financial derivatives, antibiotic resistance, bottom-up systems, Socrates’ invitation to overrationalize, how to lecture birds, obsessive love, Darwinian evolution, the mathematical concept of Jensen’s inequality, optionality and option theory, the idea of ancestral heuristics, the works of Joseph de Maistre and Edmund Burke, Wittgenstein’s antirationalism, the fraudulent theories of the economics establishment, tinkering and bricolage, terrorism exacerbated by death of its members, an apologia for artisanal societies, the ethical flaws of the middle class, Paleo-style workouts (and nutrition), the idea of medical iatrogenics, the glorious notion of the magnificent (
megalopsychon
), my obsession with the idea of convexity (and my phobia of concavity), the late-2000s banking and economic crisis, the misunderstanding of redundancy, the difference between tourist and flâneur, etc. All in one single—and, I am certain, simple—thread.
How? We can begin by seeing how things—just about anything that matters—can be mapped or classified into three categories, what I call the Triad.
In the Prologue, we saw that the idea is to focus on fragility rather than predicting and calculating future probabilities, and that fragility and antifragility come on a spectrum of varying degrees. The task here is to build a map of exposures. (This is what is called “real-world solution,” though only academics and other non-real-world operators use the expression “real-world solution” instead of simply “solution.”)
The Triad classifies items in three columns along the designation
FRAGILE ROBUST ANTIFRAGILE
Recall that the fragile wants tranquility, the antifragile grows from disorder, and the robust doesn’t care too much. The reader is invited
to navigate the Triad to see how the ideas of the book apply across domains. Simply, in a given subject, when you discuss an item or a policy, the task is to find in which category of the Triad one should put it and what to do in order to improve its condition. For example: the centralized nation-state is on the far left of the Triad, squarely in the fragile category, and a decentralized system of city-states on the far right, in the antifragile one. By getting the characteristics of the latter, we can move away from the undesirable fragility of the large state. Or look at errors. On the left, in the fragile category, the mistakes are rare and large when they occur, hence irreversible; to the right the mistakes are small and benign, even reversible and quickly overcome. They are also rich in information. So a certain system of tinkering and trial and error would have the attributes of antifragility. If you want to become antifragile, put yourself in the situation “loves mistakes”—to the right of “hates mistakes”—by making these numerous and small in harm. We will call this process and approach the “barbell” strategy.
Or take the health category. Adding is on the left, removing to the right.
Removing
medication, or some other unnatural stressor—say, gluten, fructose, tranquilizers, nail polish, or some such substance—by trial and error is more robust than
adding
medication, with unknown side effects, unknown in spite of the statements about “evidence” and shmevidence.
As the reader can see, the map uninhibitedly spreads across domains and human pursuits, such as culture, health, biology, political systems, technology, urban organization, socioeconomic life, and other matters of more or less direct interest to the reader. I have even managed to merge decision making and
flâneur
in the same breath. So a simple method would lead us to both a risk-based political philosophy and medical decision-making.
Note that fragile and antifragile here are relative terms, not quite absolute properties: one item to the right of the Triad is more antifragile than another to the left. For instance, artisans are more antifragile than small businesses, but a rock star will be more antifragile than any artisan. Debt always puts you on the left, fragilizes economic systems. And things are antifragile up to a certain level of stress. Your body benefits from
some amount of mishandling, but up to a point—it would not benefit too much from being thrown down from the top of the Tower of Babel.
The Golden Robust:
Further, the
robust
here in the middle column is not equivalent to Aristotle’s “golden middle” (commonly mislabeled the “golden mean”), in the way that, say, generosity is the middle between profligacy and stinginess—it can be, but it is not necessarily so. Antifragility is desirable in general, but not always, as there are cases in which antifragility will be costly, extremely so. Further, it is hard to consider robustness as always desirable—to quote Nietzsche, one can die from being immortal.