Antifragile: Things that Gain from Disorder

by Nassim Nicholas Taleb

My recommendation seemed impractical, but, after a while, the student developed a culture in original texts such as Adam Smith, Karl Marx, and Hayek, texts he believes he will cite at the age of eighty. He told me that after his detoxification, he realized that all his peers do is read timely material that becomes instantly obsolete.

Corporations that are large today should be gone, as they have always been weakened by what they think is their strength: size, which is the enemy of corporations as it causes disproportionate fragility to Black Swans.

People in risk management only consider risky things that have hurt them in the past (given their focus on “evidence”), not realizing that, in the past, before these events took place, these occurrences that hurt them severely were completely without precedent, escaping standards. And my personal efforts to make them step outside their shoes to consider these second-order considerations have failed—as have my efforts to make them aware of the notion of fragility.

If something that makes no sense to you (say, religion—if you are an atheist—or some age-old habit or practice called irrational); if that something has been around for a very, very long time, then, irrational or not, you can expect it to stick around much longer, and outlive those who call for its demise.

The “do you have evidence” fallacy, mistaking evidence of no harm for no evidence of harm, is similar to the one of misinterpreting NED (no evidence of disease) for evidence of no disease. This is the same error as mistaking absence of evidence for evidence of absence, the one that tends to affect smart and educated people, as if education made people more confirmatory in their responses and more liable to fall into simple logical errors.

What men have done with top-down, command-and-control science has been exactly the reverse: interventions with negative convexity effects, i.e., the achievement of small certain gains through exposure to massive potential mistakes. Our record of understanding risks in complex systems (biology, economics, climate) has been pitiful, marred with retrospective distortions (we only understand the risks after the damage takes place, yet we keep making the mistake), and there is nothing to convince me that we have gotten better at risk management. In this particular case, because of the scalability of the errors, you are exposed to the wildest possible form of randomness. Simply, humans should not be given explosive toys (like atomic bombs, financial derivatives, or tools to create life).

there is a logic to natural things that is much superior to our own. Just as there is a dichotomy in law: innocent until proven guilty as opposed to guilty until proven innocent, let me express my rule as follows: what Mother Nature does is rigorous until proven otherwise; what humans and science do is flawed until proven otherwise.

As usual, the ancients. As Ennius wrote, “The good is mostly in the absence of bad”; Nimium boni est, cui nihil est mali.

If true wealth consists in worriless sleeping, clear conscience, reciprocal gratitude, absence of envy, good appetite, muscle strength, physical energy, frequent laughs, no meals alone, no gym class, some physical labor (or hobby), good bowel movements, no meeting rooms, and periodic surprises, then it is largely subtractive (elimination of iatrogenics).

And it seems to me that human nature does, deep down, know when to resort to the solace of religion, and when to switch to science.*

And there is this antifragility to the stressor of the fast, as it makes the wanted food taste better and can produce euphoria in one’s system. Breaking a fast feels like the exact opposite of a hangover.*

A lesson I learned from this ancient culture is the notion of megalopsychon (a term expressed in Aristotle’s ethics), a sense of grandeur that was superseded by the Christian value of “humility.” There is no word for it in Romance languages; in Arabic it is called Shhm—best translated as nonsmall. If you take risks and face your fate with dignity, there is nothing you can do that makes you small; if you don’t take risks, there is nothing you can do that makes you grand, nothing. And when you take risks, insults by half-men (small men, those who don’t risk anything) are similar to barks by nonhuman animals: you can’t feel insulted by a dog.

if you see fraud and don’t say fraud, you are a fraud.)

Finally, if you ever have to choose between a mobster’s promise and a civil servant’s, go with the mobster. Any time. Institutions do not have a sense of honor, individuals do.

“But, Neeroh Toolip, there are still slaves around,” Fat Tony blurted out. “They often distinguish themselves by wearing this intricate device called a necktie.” Nero: “Signore Ingeniere Tony, some of these tie-wearers are very rich, even richer than you.” Tony: “Nero, you sucker. Don’t be fooled by money. These are just numbers. Being self-owned is a state of mind.”

There are Arabic and Hebrew sayings, Yad el hurr mizan / Yad ben horin moznayim—“the hand of the free is a scale.” It is just that the definition of the free is not well understood: he is free who owns his own opinion.

I close Book VII with a thought. Whenever I hear the phrase “I am ethical” uttered, I get tense. When I hear about classes in ethics, I get even more tense. All I want is to remove the optionality, reduce the antifragility of some at the expense of others. It is simple via negativa. The rest will take care of itself.

Everything gains or loses from volatility. Fragility is what loses from volatility and uncertainty. The glass on the table is short volatility.

Distributed randomness (as opposed to the concentrated type) is a necessity, not an option: everything big is short volatility. So is everything fast. Big and fast are abominations. Modern times don’t like volatility. And the Triad gives us some indication of what should be done to live in a world that does not want us to understand it, a world whose charm comes from our inability to truly understand it.