Antifragile: Things that Gain from Disorder

by Nassim Nicholas Taleb

Let me be more aggressive: we are largely better at doing than we are at thinking, thanks to antifragility.

anything that has more upside than downside from random events (or certain shocks) is antifragile; the reverse is fragile.

The chief ethical rule is the following: Thou shalt not have antifragility at the expense of the fragility of others.

To accord with the practitioner’s ethos, the rule in this book is as follows: I eat my own cooking.

If you see fraud and do not say fraud, you are a fraud.

A man is morally free when … he judges the world, and judges other men, with uncompromising sincerity.

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.

Sophistication, a certain brand of sophistication, also brings fragility to Black Swans: as societies gain in complexity, with more and more “cutting edge” sophistication in them, and more and more specialization, they become increasingly vulnerable to collapse. This idea has been brilliantly—and convincingly—adumbrated by the archeologist Joseph Tainter.

The excess energy released from overreaction to setbacks is what innovates!

And to return to the drivers of innovation: the additional quantities of motivation and willpower, so to speak, stemming from setbacks can be also seen as extra capacity, no different from extra boxes of victuals.

I have called this mental defect the Lucretius problem, after the Latin poetic philosopher who wrote that the fool believes that the tallest mountain in the world will be equal to the tallest one he has observed.

Like tormenting love, some thoughts are so antifragile that you feed them by trying to get rid of them, turning them into obsessions. Psychologists have shown the irony of the process of thought control: the more energy you put into trying to control your ideas and what you think about, the more your ideas end up controlling you.

It is easier to change jobs than control your reputation or public perception.

tête à baffe, a face that invites you to slap

In the complex world, the notion of “cause” itself is suspect; it is either nearly impossible to detect or not really defined—another reason to ignore newspapers, with their constant supply of causes for things.

whole. The fragility of every startup is necessary for the economy to be antifragile, and that’s what makes, among other things, entrepreneurship work: the fragility of individual entrepreneurs and their necessarily high failure rate.

Black Swan Management 101: nature (and nature-like systems) likes diversity between organisms rather than diversity within an immortal organism,

Variability causes mistakes and adaptations; it also allows you to know who your friends are. Both your failures and your successes will give you information.

And of course you learn from the errors of others. You may never know what type of person someone is unless they are given opportunities to violate moral or ethical codes.

Further, my characterization of a loser is someone who, after making a mistake, doesn’t introspect, doesn’t exploit it, feels embarrassed and defensive rather than enriched with a new piece of information, and tries to explain why he made the mistake rather than moving on.

Natural and naturelike systems want some overconfidence on the part of individual economic agents, i.e., the overestimation of their chances of success and underestimation of the risks of failure in their businesses, provided their failure does not impact others. In other words, they want local, but not global, overconfidence.

It is also necessarily collective on epistemological grounds—to facilitate the development of expertise. Someone who did not find something is providing others with knowledge, the best knowledge, that of absence (what does not work)—yet he gets little or no credit for it. He is a central part of the process with incentives going to others and, what is worse, gets no respect.

This is the central illusion in life: that randomness is risky, that it is a bad thing—and that eliminating randomness is done by eliminating randomness.

Artisans, say, taxi drivers, prostitutes (a very, very old profession), carpenters, plumbers, tailors, and 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 halt.

Man-made smoothing of randomness produces the equivalent of John’s income: smooth, steady, but fragile.

It is a much larger payoff (at low cost) than with municipalities, which would require armies of lobbyists trying to convince people while embedded in their communities.

Its system, even in banking during my days, was based on apprenticeship models, nearly vocational rather than the theoretical ones. In other words, on techne (crafts and know how), not episteme (book knowledge, know what).

Human overintervention to smooth or control processes causes a switch from one kind of system, Mediocristan, into another, Extremistan. This effect applies to all manner of systems with constrained volatility—health, politics, economics, even someone’s mood with and without Prozac.

We can also see from the turkey story the mother of all harmful mistakes: mistaking absence of evidence (of harm) for evidence of absence, a mistake that we will see tends to prevail in intellectual circles and one that is grounded in the social sciences.

unlike, say, the banking business. Why? Because it is composed of a lot of independent and competing small units that do not individually threaten the system and make it jump from one state to another. Randomness is distributed rather than concentrated.

Variations also act as purges. Small forest fires periodically cleanse the system of the most flammable material, so this does not have the opportunity to accumulate.

By a mechanism called stochastic resonance, adding random noise to the background makes you hear the sounds (say, music) with more accuracy. We saw earlier that the psychological effect of overcompensation helps us get signals in the midst of noise;

The magic is that such change of regime, from chaos to order, did not take place by removing chaos, but by adding random, completely random but low-intensity shocks.

Alessandro Pluchino and his colleagues showed how adding a certain number of randomly selected politicians to the process can improve the functioning of the parliamentary system.

the system facilitates the conversion of selfish aims (or, to be correct, not necessarily benevolent ones) at the individual level into beneficial results for the collective.

As we will see, interventionism depletes mental and economic resources; it is rarely available when it is needed the most. (Beware what you wish for: small government might in the end be more effective at whatever it needs to do. Reduction in size and scope may make it even more intrusive than large government.)

To me it is mostly about having a systematic protocol to determine when to intervene and when to leave systems alone. And we may need to intervene to control the iatrogenics of modernity—particularly the large-scale harm to the environment and the concentration of potential (though not yet manifested) damage, the kind of thing we only notice when it is too late.

There is another dimension to the need to focus on actions and avoid words: the health-eroding dependence on external recognition. People are cruel and unfair in the way they confer recognition, so it is best to stay out of that game.

My point is that wisdom in decision making is vastly more important—not just practically, but philosophically—than knowledge.

Seneca also provides us a catalogue of social deeds: invest in good actions. Things can be taken away from us—not good deeds and acts of virtue.

The concept I used earlier is more to lose from adversity. If you have more to lose than to benefit from events of fate, there is an asymmetry, and not a good one. And such asymmetry is universal. Let us see how it brings us to fragility.

You are antifragile for a source of volatility if potential gains exceed potential losses (and vice versa).

Further, if you have more upside than downside, then you may be harmed by lack of volatility and stressors.

(More technically, a stochastic process subjected to an absorbing barrier will have an observed mean higher than the barrier.)