Antifragile: Things that Gain from Disorder

by Nassim Nicholas Taleb

Admiral John Byng was court-martialed and sentenced to death as he was found guilty of failing to “do his utmost” to prevent Minorca from falling to the French following the Battle of Minorca in 1757.

Never listen to a leftist who does not give away his fortune or does not live the exact lifestyle he wants others to follow.

socialists, are people who advocate socialism, sometimes even communism, or some political system with sumptuary limitations, while overtly leading a lavish lifestyle, often financed by inheritance—not realizing the contradiction that they want others to avoid just such a lifestyle.

The stock market: the greatest, industrial-sized, transfer of antifragility in history—due to a vicious form of asymmetric skin in the game.

Robert Rubin, former treasury secretary, earned $120 million from Citibank in bonuses over about a decade. The risks taken by the institution were hidden but the numbers looked good … until they didn’t look good (upon the turkey’s surprise). Citibank collapsed, but he kept his money—we taxpayers had to compensate him retrospectively since the government took over the banks’ losses and helped them stand on their feet.

The historian Niall Ferguson and I once debated the chairperson of Pepsi-Cola as part of an event at the New York Public Library. It was a great lesson in antifragility, as neither Niall nor I cared about who she was (I did not even bother to know her name). Authors are antifragile. Both of us came totally unprepared (not even a single piece of paper) and she showed up with a staff of aides who, judging from their thick files, had probably studied us down to our shoe sizes (I saw in the speakers’ lounge an aide perusing a document with an ugly picture of yours truly in my pre-bone-obsession, pre-weight-lifting days).

They are no entrepreneurs—just actors, slick actors (business schools are more like acting schools). Someone intelligent—or free—would likely implode under such a regimen.

word of mouth is a potent naturalistic filter.

Anything one needs to market heavily is necessarily either an inferior product or an evil one. And it is highly unethical to portray something in a more favorable light than it actually is.

We accept that people who boast are boastful and turn people off. How about companies? Why aren’t we turned off by companies that advertise how great they are?

Third layer, the even more serious violation: companies trying to misrepresent the product they sell by playing with our cognitive biases, our unconscious associations, and that’s sneaky.

corporations are so fragile, long-term, that they eventually collapse under the weight of the agency problem, while managers milk them for bonuses and ditch the bones to taxpayers. They would collapse sooner if not for the lobby machines: they start hijacking the state to help them inject sugary drinks into your esophagus. In the United States large corporations control some members of Congress. All this does is delay the corporation’s funeral at our expense.*

“a handshake from the famous mobster Meyer Lansky was worth more than the strongest

The definition of the free man, according to Aristotle, is one who is free with his opinions—as a side effect of being free with his time.

More data means more information, perhaps, but it also means more false information.

You can hardly trust many statistically oriented sciences—especially when the researcher is under pressure to publish for his career. Yet the claim will be “to advance knowledge.”

The researcher’s free option is in his ability to pick whatever statistics can confirm his belief—or show a good result—and ditch the rest. He has the option to stop once he has the right result. But beyond that, he can find statistical relationships—the spurious rises to the surface.

If I have a set of 200 random variables, completely unrelated to each other, then it would be near impossible not to find in it a high correlation of sorts, say 30 percent, but that is entirely spurious.

professors are not penalized when they teach you something that blows up the financial system, which perpetuates the fraud. Departments need to teach something so students get jobs, even if they are teaching snake oil—this got us trapped in a circular system in which everyone knows that the material is wrong but nobody is free enough or has enough courage to do anything about it.

“Don’t do unto others what you don’t want them to do to you.”