Antifragile: Things That Gain from Disorder by Nassim Nicholas Taleb

by Nassim Nicholas Taleb

SYNOPSIS

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Have you seen great ideas or apparently-solid organizations fail because of some random event or unexpected shock? Does your organization spend significant resources on trying to avoid volatility or uncertainty? What if shocks, volatility, and uncertainty were actually what your ideas or organization need in order to really take off? This summary shows how the key to thriving is not avoiding stress but embracing the concept of ‘antifragility.’

The antifragile is the opposite of fragile; it is something that loves randomness and uncertainty and is strengthened by a shock. Antifragility is inherent in all the natural and complex systems that survived over time. Our modern civilization is intent on damping down volatility and randomness and avoiding stressors; but once we grasp the importance of antifragility, we realize that our modern approach actually causes harm.

Suppressing volatility and randomness in our economy, our health, our education, or our political life makes those systems more fragile. Without stressors, complex systems become weak and even die.

Black Swans—large, irregular, and unpredictable events—are what makes history. We cannot predict them, but we can determine which object or system is more fragile to Black Swans than another. The fragile systems are the ones that do not like volatility, randomness, errors or stressors.

Modern society assumes that anything can be ‘fixed,’ but most of the time it is better to leave well alone. Socioeconomic life and the human body can actually be harmed by intervention, leaving the whole more fragile to shocks and uncertainty. Often, the best course of action is to ignore the noise from too much data, and let time take care of the problem.

One of the worst aspects of modern society is the way that fragility and antifragility get transferred from one group to another, usually with one side getting all the benefits and the other getting all the harm.

 

SUMMARY

1.  Introducing Antifragility

Most people assume that the opposite of “fragile” is “robust,” or some similar word implying resilient; but resilient items do not change or improve. In fact, there is no word for the opposite of fragile—the best we can come up with is something like “unharmed.”  Instead, let’s use the word “antifragile.” The resilient resists shocks but stays essentially the same, while the antifragile gets better after a shock; it loves randomness and uncertainty. Anything that has more upside than downside from a random event or certain type of shock is antifragile; fragile is the opposite.

Consider the Hydra, a monster in Greek mythology with numerous heads. Whenever one head was chopped off, two would grow back. That is the essence of antifragility: something that likes a certain type of harm and even thrives because of it. Another example that gets us part of the way to this notion of antifragile is the ancient king Mithridates, who protected himself from assassination by ingesting ever-stronger doses of poison. It’s the principle that underlies vaccination. The idea is that sometimes systems need stressors in order to grow and thrive.

Antifragility is an inherent aspect of all those natural and complex systems that have survived; so, if we deprive such systems of volatility, randomness, and stressors, we will actually harm them. Suppressing volatility and randomness in our economy, our health, our education, or our political life makes those systems more fragile. Without stressors, complex systems become weak and even die.

 

The Triad

>adapt some of table on page 23-27<

The fragile craves tranquility, the robust doesn’t care too much, while the antifragile grows from disorder.

 

Get into Trouble

To innovate, first get into trouble. The excess energy released when you overreact to a setback, the over-compensation, is precisely what triggers innovation. It’s like encouraging a horse to run faster by pitting him against a strong rival. In any system, this over-compensation builds extra capacity that helps the system to survive. Unlike the risk analysts who figure out how to survive the kind of bad experience that happened in the past, overcompensation is nature’s way of helping a system to cope with the worst that could possibly happen—not just the bad thing that has happened.

Information is antifragile. It feeds on attempts to harm it. Consider a large corporation or government attempting to “re-instill confidence” after a crisis. When you hear that phrase, you know they are fragile, hence doomed. The information is out there and it is merciless.

Life is antifragile—up to a certain point, all living things are strengthened by stressors. (But only up to a point, too much stress can kill.) Non-living, inanimate things, however, will break when stressed. Humans seem to do best with acute stressors that act as messengers, particularly if given time to recover. They do not do well with chronic stressors like a burdensome boss, tax problems, or long daily commute—i.e., the pressures brought on by civilization. Complex systems also benefit from a certain level of stress—it’s how information is communicated to the system’s component parts.

Yet, our modern life tries to eradicate stressors as much as possible, thinking it will strengthen us or strengthen society. But people and societies are not washing machines that can be tinkered with and made better. In fact, the opposite is the case: without periodic acute stressors, we will be weaker, not stronger. Living things need a certain measure of randomness and disorder in order to thrive.

 

Evolution and Antifragility

Evolution can be thought of as getting stronger under harm—it loves stressors, randomness, and uncertainty. One individual may be relatively fragile, but its suffering strengthens the gene pool. If nature ran the economy and its institutions, it would not waste effort constantly bailing out every individual to help it to live forever. For evolution, the more noise and disturbances in the system, the more that reproduction of the fittest and random mutations will help to define the next generation. Of course, this is true only up to a point: a calamity that wiped out all life on earth wouldn’t help the fittest to survive. Nevertheless, evolution happens when harm to an individual organism helps the species as a whole to survive.

The downside of this is that the mistakes or disasters suffered by some individuals may help the rest of us, but certainly don’t help them. The sinking of the Titanic was catastrophic for its passengers, but without that disaster we would have kept building ever-larger ships and the next sinking would have been even more tragic.

Nature works in layers: smaller organisms contribute to evolution; our bodies’ cells compete to survive; each cell contains proteins that compete; and so on. There is a similar kind of layering in the economy, with individuals, small firms, departments within large corporations, industries, regional economies, and the global economy. For the economy to be antifragile and evolve, individual businesses must be fragile and exposed to breaking. We can mitigate the harm that may ensue for the very weak, shielding individuals from starvation, providing social protection and above all respect. But, the fact is that government bailouts are the opposite of healthy risk-taking, by protecting the unfit. The better solution is to have a system where no one company’s failure can drag others down.

 

Resisting Black Swans

Most of history comes from Black Swans—large-scale, irregular and unpredictable events that have huge consequences. Such events are necessary for history, technology, and knowledge. We may think, with hindsight, that we almost predicted these Black Swans, as we try to make history appear more linear, but in doing so we underestimate the role of randomness. In our modern world, with all its technological complexity, the role of Black Swans is actually increasing, even as we insist that we are better at predicting and even avoiding such events. Understanding antifragility will make us less fearful of Black Swans.

We cannot say for certain that a particular shock or event will happen, but we can determine which object or structure is more fragile than another, if the event were to occur. Instead of talking about risks, we should be talking about this notion of fragility: that which does not like volatility, randomness, errors or stressors.

We must also talk about ‘fragilistas,’ that category of people who mistake the unknown for the nonexistent, who overestimate the reach of scientific knowledge, and who pride themselves on being ‘rational.’ A medical fragilista is someone who underestimates the body’s ability to heal itself; a policy fragilista thinks the economy is a machine that can be tinkered with and ‘fixed’; and a financial fragilista is someone who forces onto the banking system risk models that end up destroying that system.

 

2.  Denial and Modernity

Artisans, taxi drivers, and dentists have volatility in their income but are relatively robust to the kind of Black Swan that would stop all of their income. Employees, on the other hand, have no such volatility but their income can disappear after one phone call from HR. A small mistake gives a self-employed person valuable information that helps her to adapt; an employee’s small mistake becomes part of her permanent employment record.

The word “volatility” comes from the Latin volare, meaning “to fly.” When we deprive political and other systems of volatility, through some misguided attempt at intervention, we harm them and prevent them from really taking off.

 

The Levant and the Nation State

The northern Levant, roughly the area that today comprises northern Syria and Lebanon, was for thousands of years a prosperous region, dominated by traders. Then came the two World Wars, which split the region between two nation sates, Syria and Lebanon. A few decades later the Baath Party arose in Syria, embarking on a ‘modernization’ program that meant centralization and statist laws, replacing the ancient trading hubs or souks with modern office buildings. The trading families left (for places like New York or California) and cities like Aleppo plunged into decline. Meanwhile, Lebanon spiraled into civil war as rival factions armed themselves and the state did nothing.

 
 

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