Rating 8.5/10
Nassim Taleb is a Lebanese polymath with a main focus statistics , a former risk analyst in Wall Street and an essayist with a 5 volume series on uncertainty called Incerto. Antifragile is the 4th book in the In the series and it analyses those things which benefit from the uncertainty that Taleb explores in the series. The principle of antifragility has been applied to a wide array of areas of knowledge. The book paints out strategies on how to operate to benefit from randomness and to be protected about outlier events, the author uses both technical and ordinary scenarios to illustrate his ideas.
Prologue
“Wind extinguishes a candle and energizes fire”.
Likewise with randomness, uncertainty, chaos; you want to use them not hide from them. You want to be the fire and wish for the wind.” With this image Dr. Taleb introduces his book and the concept that share a title. Antifragility is a response to randomness, how the objective is not to overcome uncertainty (which would be robustness) but to thrive in it.
Antifragility is the description of that which not only survives stress and disorder but that which grows and benefits from these situations. It is the opposite of fragile, think how glass breaks under stress. Taleb argues that although an unnamed term, antifragility is behind everything that has evolved with time: from culture to technology. The antifragile entity uses randomness and uncertainty to its advantage and therefore loves errors.
It is easier to deem an entity fragile that explain what it will be that will harm it because the threats to fragility have a component of uncertainty. This makes fragility measurable and a better indicator than “risk”. Depriving entities of randomness and stressors will weaken them in the long run by making them fragile. Taleb introduces soviet-Harvard delusions, those policies aimed at removing stressors in systems and making them fragile. The biggest fragilizer in society, the entity that removes the most randomness, is a bunch of academic intellectuals with no “skin in the game that influence thought and policy.
Taleb states that he is happy in a world he doesn’t understand, where randomness and uncertainty occurs. He reintroduces the idea of the black swan from his book with the same title, he reminds the reader or tells the new reader about how black swans give the illusion of predictability and the the outcomes are non linear, the odds of such events are simply not computable. When it comes to random events being robust is simply not enough, in the long run the robust ends up breaking , perfect robustness in unattainable, that is why the way forwards is to make systems antifragile . We get the illusion that the world runs out of order but Taleb states this is a smoke screen, whilst progress is fueled by randomness, it’s academics who write the history books .
Taleb comes back to magnitudes and the advantage of fragility over risk, especially when black swan events are involved. Risk is a magnitude of future incidence, which makes it very difficult to measure, fragility, on the other hand is a magnitude of the present of the entity, one is real the other is predictive.
Taleb talks about the persona of the fragilista, an agent in the theory of antifragility which follows and believes the soviet Harvard delusion and performs interventionist policies on the economy, treating it like a “washing machine that constantly needs fixing”. Taleb advocates for the simplicity but warns against the establishment who “introduces sophistication to justify some professions”. Taleb here believes that the simpler the system is, the more it is exposed to uncertainty , but the intellectual barriers to the simplification of systems stop being natural and introduce more fragility.
Taleb then defines fragility technically as “what does not like volatility”, volatility meaning stress, uncertainty, errors… Taleb also introduces the disorder family, those things that would introduce volatility into a system. Amongst the suspects of volatility, Taleb singles out time which circles back to the notion of nonlinearity, time magnifies the effect of things “the fragile break with time”.
Appendix: The triad or a map of the world and things along the 3 properties.
Taleb aims to connect the works of philosophers and thinkers that have come before him with modern streams of thought in one single thread. He classifies everything as part of the triad (fragile, robust or antifragile). Fragile and antifragile become relative terms, things are antifragile up to a breaking point of stress, which he illustrates by quoting Nietzsche “one can die from being immortal”. Taleb then displays a multidisciplinary table that he categorises using the triad. The table contains everything from examples in mythology to modern education or finance.
Chapter 1
Taleb used the image of a package in the post to illustrate the concepts of the triad. He advocates for the introduction of the concept of antifragility which is a neologism in the oxford dictionary. Taleb talks about the fact that the concept has not been defined is proof that this is a blindspot for humanity, however, he argues that antifragility is very present around us. Taleb also illustrates antifragility in mythological metaphors: the phoenix, is the symbol of antifragility, reborn from its ashes whenever it dies. Another symbol is the hydra, the serpent with multiple heads that when one of them is cut two grow in its place. Joseph Tanter argues that societies introduce fragility as they gain complexity.
There are antecedents of words with meanings close or engulfed by the term antifragility. The term antidotum mithridatium, in the name of king Mithridates the IV of Pontus is the periodical ingestion of small doses of the poison to build up immunity through tolerance. This is the concept behind vaccination. It is not a form of antifragility but a form of robustification that pavers the road towards antifragility. Another antecedent is hormesis, that fits the idea that low doses of poison bring healthy benefits. It is the idea behind intermittent fasting. The point is not to deprive the human system of stressors.
Chapter 2
Taleb continues by talking about overcompensation and overreaction and starts by describing post traumatic growth in people who go through a stressful event who come out the other side stronger than they came in. Taleb then goes on to describe innovation and how it needs hunger to move forwards, scarcity id the biggest motivator of innovation. He then describes the case of the FAA that increased the weight of automated flight by regulation and had to backtrack because pilots where relying to much on automation and having accidents because of that.
Taleb describes overcompensation and under compensation, one drives from the presence of a stressor and the other happens because of the absence of one. Nature a is an entity that over insures itself, it introduces redundancy (fail safes) like two lungs or two kidneys in case something were to happen. Redundancy m,ay seem like a waste if it is not called to action by an unforeseen event. He goes on to describe what he calls the “Lucretius problem” in which a system is designed to withstand the historic worse case scenario, failing to prevent an event that hasn’t occurred before. This may lead to catastrophic failures like the Fukushima power plant in 2011. Taleb discusses progressive overload in weightlifting and the effect it has on the body which adapts to withstand a bigger load each time.
Dr Taleb describes antifragility in communication amongst humans in society. A crowd may form a rebellion which benefits enormously from stress. He talks about creating buzz around his book no matter if it is a result of good publicity or bad publicity. He could hit an intellectual counterpart in public and increase sales. “Criticism for a book, is a truthful, unfaked badge of attention.” He then compares to other jobs which are more fragile than others, he can hit the counterpart and benefit but if a banker hits a counterpart, his reputation will probably be ruined and with that his career. “Nothing that I do that makes it to the front page of the Corriere della Sera would de detrimental to my book.”
Chapter 3
Taleb argues that everything carbon, alive, is benefited by antifragility through development and evolution but that not everything antifragile is alive. The biological is in most cases fragile and antifragile, there is a quantity of stress that it can endure and which is beneficial but past that point the system is fragile and will break under stress. Few inanimate things are antifragile, material things age and get worn out, fall out of fashion and they don’t self-repair. Taleb acknowledges that humans too age, which he argues is a result of maladjustment and deterioration which can be separated, deterioration with age is not avoidable however maladjustment may be corrected and the repercussions may be reduced. Taleb charges against comfort, as the main reason for maladjustment.
Taleb then goes on to analyze what he calls “the complex” : society, market and culture. They are closer to the biological than the inanimate mainly because they are self regulating systems. Information about the antifragile systems is extracted through stressors. Errors and their consequences are the best form of information. Causal opacity, the difficulty to find a definite clear cause males conventional, logic forms of analysis difficult this opacity makes the predictability of specific events very low.
Humans do better with acute than with chronic stressors even more so if a period of recovery in between stressors is allowed. The best way to break an antifragile system is not allowing recovery, preventing regrowth. Complex systems like politics or economics that get tampered with on a monthly basis get no time for recovery and their fragility increases. Social scientists research for equilibrium, for non organic entities this means death. Taleb claims that if he “could predict what his day would exactly look like he would feel a little bit dead”. He prompts the reader to introduce randomness, and to plan less. To care less about discipline, meetings or boring people. Have random stimuli and have a life that is “dangerous, yes but boring, never.”
Chapter 4
Taleb talks about advantage how the antifragility of a system comes at the expense of the fragility of others. He introduces layers and hierarchies within systems, which are the result of the sum of their parts. Taleb illustrates his point with the restaurant industry which as a collective is very antifragile but that this comes at the expense of the fragility of each individual establishment. Errors and failures benefit the greater good not necessarily the individual.
He then returns to the idea of mithridatization and hormesis which are just “proto-antifragility” as opposed to hormesis, the human body may die if subjected to enough stress, however, because of evolution genetic information lives on. The individual does not get stronger but other individuals survive and have the chance to improve the collective system. By going one generation at a time, the system doesn’t have to protect itself against every single random event to progress forwards. Nature doesn’t try to bail out every individual or predict its future because they don’t have to live on forever. By the effect of survival of the fittest, it is the strongest that pass on their genetic information further strengthening the system. Evolution is not even just about one species, if humans were to become extinct, some other species would evolve and take over. Hormesis and mithridatization fail to account for the collective by just making the individual antifragile.
When the individual is fragile, he depends on randomness to be null, for events to behave according to plan with as little deviation. This is the reason the fragile is predictive it in his decision making and why being predictive makes a system fragile. There is a sacrifice that individuals make in a system for the benefit of the collective which learns from their mistakes and avoids repeating them and from the knowledge they pass on. Some errors however, cause contagion and can bring the system down.
Taleb then tackles relationships and how they are an example of an antifragile system ” you may never know what type of person someone is unless they are given opportunities to violate either moral or ethical codes. Taleb compares the individual and the collective, in the case of the economy or society, the collective needs the failure of the lowest layer of which brings failure through the layers leaving only the strongest in every layer. “Ruthlessness is an engine of improvement” By bailing out individuals in a system to avoid contagion (e.g bailing out a large firm) only damages te weak and consolidates the established transferring fragility from the the system to the weak. Someone within the system pays the price for the system to improve.
Book II“What is made to fly will not fo well trapped on the ground”.
Taleb introduces the procrustean bed after the innkeeper Procrustes in Greek mythology who made all visitors fit his bed perfectly by stretching them or cutting their limbs off.
Chapter 5
Taleb compares two jobs, taxi driver and clerk of a large bank, one has a priori a fixed income, when the economy is fine, but as soon as a banking crisis arises, he can easily be fired. The taxi driver on the other hand has good income days and bad income days with extreme variability. The driver ends up taking the same income monthly. There is an illusion that the taxi driver has more risk in the job because of the randomness. The taxi driver however, in the same way that artisans are, is robust against black swan events. Man made extraction of randomness creates the first type of job which is steady but fragile random shocks will turn them to zero easier than the artisan-taxi type jobs. For these types of jobs, stressors (like a low-income week) serve as information to change the route.
Taleb then introduces bottom up vibrations/noise as the differences a system experiences when it scales up nonlinearly. The small, a collection of small systems is antifragile like nature was. In a small community a death is a tragedy, in a big one it is a statistic. “Emotions are bound to probability” Taleb uses Switzerland, what he describes as the most robust place on earth as an example of municipalities part of a bigger system as opposed to the fragile nation state. Into what Taleb, as part of his thesis, calls mediocristan, Switzerland fits perfectly, over the whole of the municipalities, variations tend to cancel each other out as opposed to what Taleb calls extremistan where little variation occurs but occasionally large variations with large consequences occur.” One fluctuates the other jumps”. Mediocristan is close to a gaussian distribution whereas extremistan is the “fat tails ” variety. Extremistan predictability is therefore low. In mediocristan, “randomness is distributed not concentrated”
Chapter 6
Variations in the multiple part system act as progress, delaying crises is not a good idea because the risks accumulate like putting toys under a rug until they are to big to be imperceptible, “fluctuat nec mergitur, fluctuates but doesn’t sink” . Once the perils of removing randomness have been stated, Taleb goes on to explore the artificial addition of randomness. This he calles stochastic resonance, the adding of random noise to the background, so one is able to listen by overcompensation. Taleb then describes his avoidance of analysis paralysis, when ordering he selects the same dish the most overweight person at the table orders.
Chapter 7
Taleb introduces “naive interventionism” in medicine in order to introduce iatrogenics, where the illness is caused by the healer intervening on a previous condition by treating in excess. In modern medicine iatrogenics is a game that pharma has taken over from doctors. They are part of the “agency problem” in which one party has occult interests that differ from the services they are giving another party. Medicine has the Hippocratic oath primum non nocere (“first do no harm”).There is also an opposite term which has not been defined and it is the situation when someone tried to do harm and ends up helping the system.
Taleb accuses social scientists and economists of having no built in consciousness of iatrogenics. Errors of theory are seldom if ever addressed. All theories but physical theories play with an ideal modelled world and even Newton’s mechanics fail when objects travel at the speed of light. Attempting to eliminate the boom and bust system of the economical system results in an introduction of fragility through the elimination of variation. Taleb specifies that he is not entirely against intervention, he is equally worried about under intervention. There is no point in over intervention when the benefits reaped by the intervention are minimal. Taleb talks about the Drachten effect, in which all the traffic signs in the town of Drachten were removed and this resulted in a reduction of accidents. In this case deregulation led to increased safety.
Taleb then explains the reason for over intervention: it’s much easier to sell “look what I did for you” than “look what i avoided for you”. Bonuses based on performance only do to aggravate the situation. Taleb introduces roman general Fabius Maximus, who had to fight Hannibal who had the obvious military superiority and chose to do so by not eating and letting Hannibal destroy himself by stretching his supply lines and exposing his men to the cold of the alps. Procrastination as opposed to intervention lets things run its course “festina lente” (Make haste slowly”).
Procrastination is opposed by some philosophers who talk about naturalistic fallacy, they imply that what is natural is not always morally right. If this stops at the moral domain, it is a valid thought but there is evidence against applying this thought outside of morality.
“The more frequently you look at the data the more noise you are disproportionately to get as opposed to receiving the signal.” One great example of this is newspapers and other traditional news outlets who need to fill a whole allocated space be it air time of pages no matter how much the amount of thews varies that dat and they must cover similar events as the competition. Their agency problem is that the service they offer is information but their objective is to make money. The pursuit for eyeballs makes the media report the most anecdotal case in which the perceptions of risks are changed, say with deaths a sensational death will be covered but not a heart attack, this will result in the sensational death appearing more common that it really is. The way to counter this is to ration the amount of news consumed.
Taleb differentiates the catalyst from the cause. One starts the variation, whilst the other enables it to happen.
Chapter 8
Fragility can easily be contained:
- Detecting antifragility is easier than prediction
- There is no objective to change the world
- Antifragility is how things move forwards against the greatest stressor, time.
Instead of blaming the occurrence of an event on not predicting it, the blame is on building something that is fragile to these events. After Fukushima, nuclear power plants instead of becoming better against accidents are focusing on reducing the consequences of radioactivity in the event of an accident.
Chapter 9
This chapter introduces mobster Fat Tony and philosopher Nero, “curiosity is antifragile, as is addiction, and is magnified by attempts to satisfy it” A system built on illusions of understanding probability is bound to collapse. By betting against fragility you can be antifragile. Nero realises that abundance be it money or recognition leads to the feeling of always losing, he sees people with fortunes afraid to loose them and academics getting angry when someone they deem intellectually inferior gets praise.
Chapter 10
This chapter talks about the ancient Roman philosopher Séneca and stoicism, which Séneca describes in a practical way. Seneca is always for having skin in the game, “all the time this is serious” and he behaves rationally accordingly. One of the main themes of stoicism is some indifference to fate. After an adverse event, Seneca writes “I Lost nothing”. Stoicism is then a philosophy of robustness, there is immunity from external circumstances. There is an upside for being mentally adjusted to the worst case scenario, it it about the domestication of emotions. There is an asymmetry, if nothing is to be lost then everything is to be won and the system becomes antifragile.
Chapter 11
Taleb introduces the bimodal or barbell strategy, damage is sometimes irreversible, specially when done to fragile things. A fragile thing, damaged by a bad condition or event won’t necessarily recover if a better condition comes later. If a vase put in equilibrium falls and breaks it will not mend itself by putting it on a pedestal with more equilibrium. There is no path dependence in systems. Also there is effective speed, not too slow that the system gets nowhere but no so fast it crashes.
The solution comes in the form of a barbell, which is the figure of uncertainty, a barbell is a bar with weights attached at both ends and Taleb uses it to illustrate two opposite extremes that avoid the middle. It is extreme risk aversion and extreme risk loving. It is a dual strategy using extremes and no middle ground. One example is in evolutionary theory where monogamous birds want the collector bird as a companion and the “rock star” (the one with the best genes) bird when they have to procreate. A barbell strategy in social politics consists in protecting the very weak and let the strong do their job.
Taleb quotes a Yiddish proverb “provide for the worst, the best can take care of itself”
Book IV
This book discusses innovation and options . It talks about the teleological fallacy in which the individual knows exactly where they are going. Taleb also introduces the figure of the rational flaneur, who is someone who revises his schedule at every step. “He is not a prisoner of a plan”, they are the ultimate opportunist. An option makes one antifragile and allows to benefit from the positive side of uncertainty.
Chapter 12
This chapter introduce the mathematician and philosopher Thales of Miletus. The philosopher was lacking money and was tired of the accusation his richer neighbours launched at him “those who can do, do, others philosophize.” To prove them wrong he studied his environment and made an intelligent business investment that allowed him to live comfortably and prove to himself and others that he was not philosophizing because he couldn’t take action. He got what is described as “fuck you money”. He used optionality to make this money earning the right but not the obligation to use the oil presses in his town. thus achieving antifragility.
If you make more money when you are right than you are hurt when you are wrong then you will benefit in the long run from volatility. Options don’t have to be financial, in truth the best options are free. Asymmetry is present in this tale, it is what makes the risk of failing small as it only results in a small loss, this is antifragility. Creatives are benefited by a small loyal following more than a large following that just appreciates their job. In most creative endeavours the haters don’t count as a negative as there is no opposite to buying a book or not buying a piece of art, this is asymmetry in its most pure form. Another example of asymmetry exploited for benefit are luxury good retailers whose clients are at the top of the nonlinear income curve, this is a very clear case of fat tails.
An option equals Asymmetry + Rationality. This means that in the presence of asymmetry, the good is kept and the bad is ditched, an option appears.
“Life is a long gamma” Life benefits from uncertainty and variability.
Chapter 13
Technology is only trivial retrospectively not prospectively, once things are discovered, understood and mass produced they seem simple. The intellectual society rewards difficult problems compared to the real world where there’s no penalty for simplicity. Humans lack imagination, to the extent of not knowing what tomorrow’s important things look like, only a few visionaries see the optionality and take the advantage to discover something new. Randomness affects both the invention and the implementation. There is a wisdom adhered to knowing what you have on your hands once you have invented it. “Governments and universities have done very little because they look for the complex and grandiose and discard the simple, simplicity doesn’t lead to laurels”.
Trial and error is not really random, it takes some rationality in knowing what to keep and what to discard. Early trial provides additional information that can be used for the next implementation. In a trial and error business a bad quarter doesn’t need to mean distress like in a cash flow business. In these cases a bad quarter gives direction on where to focus the next trials.
Taleb then describes Schumpeterian economics and creative destruction where the system must destroy the previous status quo to innovate into the next one. This counters the Baconian model that defines 3 steps for innovation: 1. Academia 2. Applied science and technology. 3. Practice . This kind of model is only true in very specific cases (i.e physics), in most fields it is just the opposite. The author equates this to teaching birds to fly, when they ultimately fly, was it because of the teachings or because of their nature? The field analogy may seem ridiculous but it is what happens in many fields in academia. There is a Yiddish saying “If the student is smart the teacher takes the credit”.
Taleb then goes on to criticize interventionism, he talks about the economic crisis points at greed as the cause. This statement gives the causal feeling that if greed were to be eradicated at the root there would be no economic crises. This is a procrustean bed solution at it’s finest. He then talks about the fallacy of confirmation, when something is sold or marketed to you and the difference with the reality. It is upholding the facts that support one’s theory and withholding those that challenge it, which introduces a ton of asymmetry and fragility.
Chapter 14
There is a widely accepted knowledge that university knowledge generates economic wealth. Taleb is of the opinion that this ” comes more from superstition than from empiricism”. Tales exposes the model that is in place in Abu Dhabi where they use their resources obtained from oil to fund universities, going as fat as importing professors, Taleb believes stressors are missing from this system. Taleb explores causality, the thing that comes before and applies it to wealth and economic development and education. He gives examples of countries that followed both causal paths and examples that followed none of the two, as they started from different conditions. Taleb is quick to point out that this lack of causality is at the macro level, for the individual person, education builds credentials and stabilizes income. A family stays in the middle class because generations continue to get diplomas.
The aim for state funded education should instead be instead of economic growth, the raising of values, making good citizens and learning. Taleb discusses the Halo Effect from Thinking Fast and Slow, skills in one area of knowledge don’t usually translate to skills in another one.
People called ignorant may not be ignorant at all, there are different metrics for ignorance. Taleb calls the green lumber fallacy the situation in which one mistakes a source of knowledge for another, less visible from the outside. “Good speculative bets just come to you, you don’t get them by just staying focused on the news.” There is a big difference between something and a function of something one is perception the other is reality.
Chapter 15
Nobody worries that a child without knowing the aerodynamics of Newtonian physics will be able to ride a bicycle so why don’t we transfer this to other domains? History is written by the losers, with time on their hands and a protected academic position. Cooking is a great example of a field that depends on this, it has developed through trial and error, keeping the successes and scraping the failures, you can’t reverse engineer food from the nutritional label.
However, Taleb does accept an exception in this, medicine, a field in which randomness has been accepted. Some people are trying to come up with a drug to cure an illness and en up discovering a drug for something else. However the low hanging fruit has already been collected.
Evidence of absence is not absence of evidence.
- Look for optionality.
- Preferably with open ended payoffs.
- Do not invest in business plans but in people.
- Make sure you are barbelled.
Chapter 16
Taleb differentiates between two scenarios, the ludic and the ecological, the ludic is subject to rules which are previously written and followed at all times, then there is the ecological where variables can’t be isolated and the rules are unknown, like real life. An aimless but rational flaneur benefits from what randomness has to offer. Only the autodidacts are free. “Good grades were not as good outside the school as they were in it.” Barbell autodidact studying the bare minimum to pass the exam. To read a lot and to learn a lot the trick is to “be bored with a specific book rather than with the act of reading”. Barbell play it safe in school and read on your own extra academically.
Chapter 17
Taleb starts the chapter by stating that the most severe mistake made in life is to mistake the unintelligible for the unintelligent. Taleb then illustrates a conversation between Greek philosopher Socrates and Fat Tony. Tony is concerned with tangible perception of reality instead of the essential nature. What you don’t understand doesn’t have to be nonsense. Socrates was put to death because he went against culture, tradition the establishment was working just fine and he opposed it. Philosophers talk about truth and falsehood, real people talk about payoff, exposure and consequences.
Fragility is not probability, we check for weapons in airports not because we think everyone is a terrorist (slim probability) but because we are extremely fragile against terrorism. Decisions are taken in base of antifragility and not probability. We don’t make decisions thinking of confidence levels.
Book V
This book delves into linearity and non-linearity. Taleb uses autobiographical stories and other images to study how difference between linearity and nonlinearity affects his thesis. Taleb sets the scene in the 1990s when he quit his job as a trader in wall street, he proceeded to lock himself in an attic to write a text book. Taleb defines the job of a scholar consists in ignoring insignificant current events and to write books, not emails.
Chapter 18
Taleb explains concavity and convexity in a gains against stressors graph (time is obviously the easiest to explain of all the stressors). Story from Midrash tekim: comparing damage a heavy stone does as opposed of the whole weight distributed in pebbles. This is an example of non linearity, there in no linear relationship between stone size and harm. Taleb argues fragility is nonlinear as the stressors past a breaking point will completely break the system but smaller stressors will go unnoticed.
There are a lot mote ordinary stressors than black swan stressors. Systems often immune to the cumulative effect of ordinary stressors but the equivalent of a single stress shock will obliterate the system. Fragility is this, the single extreme event has more than the accumulation of ordinary events. Observing a gain graph where harm is negative, Taleb explains concavity and convexity as a smile and as a frown respectively. Convexity is antifragile concavity is fragile, more upside than downside draws a convex curve. You want the curve curving upwards into the gains. He uses traffic to explain concavity and convexity with travel time against the number of cars. time is obviously the loss and the graph curves downwards as more cars on the roads increase travel time.
Taleb then describes a “squeeze” when an individual is forced to do something no matter the costs. They are put in a position with no possible maneuver out. The bigger the size of the individual or the system, the larger the squeeze. Contrary to the economies of scale theory, size matters when stress is involved. Hubris hypothesis. “Bottlenecks are the mothers of all squeezes” Taleb then argues against projects and prediction management introducing Danny Kahneman’s idea of planning fallacy, the main problem of planning is that time only positive so uncertainty will cause delays. Taleb argues that planning fallacy is not a flaw in human psychology but an inherent problem of the nonlinearity of projects. You can continue to make a system more efficient but this only contributes to increase error cost.
Chapter 19
Taleb introduces the concept of the philosophers stone, an object capable of transmutation of any element into gold. This chapter is a mathematical evaluation of the previous chapter. Taleb introduces an exposed company with concave returns that was sitting on a barbell of dynamite. Taleb calls this the acceleration of harm, the rate at which changing a variable results in harm to the system. There are positive and negative results in the error in the formulation of a model. Some errors affect in both ways randomly and in the same magnitude over time, this average to zero. You can control these errors as long as there is a size limit. This is not the case with most systems. Errors in a concave system have a one way outcome and that results in harm. There are rarely positive disturbances in these systems. Squaring a convex function, the average of the square payoff is larger than the square of the average. The difference between the two is the hidden benefit of antifragility. Jensen’s Inequality. The contrary, square rooting generates a concave graph.
Book IV
In this book Taleb introduces the concept of via negativa, which consists on simplifying systems by removing variables which ends up introducing more artificial complexity. Taleb talks about the Greek term apophasis, mentioning without mentioning. This developed into the Latin term of via negativa in which God is described by what he is not, by elimination. Like statues carved by subtraction. The interventionist focuses on doing, acts of omission are commonly not considered acts. Pros eliminate, it is not 10 habits to become a pro athlete, but 10 things to eliminate. Winning by not loosing is the success behind via negativa. Negative knowledge (knowing what doesn’t woat) is more robust to errors than positive knowledge, knowledge grows by subtraction.
Steve Jobs said “people think focus means saying yes to the thing you’ve got to focus on. But that is not what it means at all. It means saying no to the hundred other god ideas that there are. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things I’ve done. Innovation is saying no to 1000 things.”
Subtraction via negative is also a king of barbell, what is wrong is robust, what you don’t know is fragile and you are exposed to it. Taleb describes Pareto’s principle, the 80/20 rule and argues that in the technological world this is evolving into a 1/99 ratio. This is what he describes as a winner take all effect. This 80/20 rule makes elimination the way to go, just eliminate the less efficient part of the system to increase efficiency but is that easy? Taleb argues that robust decisions require no more than a single reason. Bergson’s razor ” a philosopher should be known for a single idea, no more”.
Chapter 20
Antifragility means that the old is better than the new because it has survived the worst stressor of all, time. Taleb introduces neomania, a preference or craze for the new that Taleb calls a disease. What survives time is logically, more robust. Technology is often associated with new things, “innovation” is normally perceived as an addition to the works but it is really a subtraction, it is a via negativa, what is fragile will essentially break. What is fragile will be replaced but the replacement is unpredictable. Futuristic projections in literature have been mainly wrong, our world looks closer to what the writers were living to what they were imagining.
Taleb talks about technology being at its best when it is invisible, when it replaces the fragile existing technology. The best use of technology is when it removes unnatural barriers for us. It is argued by Taleb that a property of technology is that is want to be displaced by itself.
Taleb then goes on to talk about the Lindy Effect, by making differentiation between perishable and nonperishable or object vs information. ” A Single car is perishable bu the automobile industry has survived a century.” Perishability in the objects is linear, the young man will probably outlive the elder, information however is antifragile to time, old information or knowledge has more life expectancy than the new. The longer a technology lives, the longer you can expect it to live. For information, in simplified terms, every year that passes without extinction doubles the additional life expectancy. This, Taleb clarifies is obviously probabilistic and a notion, it doesn’t obviously apply to every technology.
Taleb then accuses information of hiding failures in the investment market, where failures are buried and the public doesn’t hear about them, which leads investors to overestimate their chances of success. Same is equal in other domains, only the good books stand out and because well written books do well, we are fooled to think that all well written books will do good. Something that pushes the spotlight on technology is novelty bias, we notice change, not statistics “we rely more on water than cell phones but because water doesn’t change and cell phones do, we are prone to think that cell phones play a larger role than they really do.
In technology, we recognise more differences between versions than commonalities, we are constantly looking for the next iteration. This is what is called the treadmill effect. This effect doesn’t apply to things outside of the technological realm. Between technologies of the same type, differences are what is mostly observed but with replacement technologies it is similarities that are observed.
Top down planning is generally irreversible whilst bottom up planning is organic and gradua. Taleb uses the Lindy Effect to choose what to read. Taleb makes future predictions based on subtraction. Something original tends to be modeled on something that was new at some time.
Chapter 21
Taleb argues for via negativa in medicine only when the payoff is very large and to avoid interventionism for small ailments. There is a difference between evidence and the absence of evidence going along the lines of via negativa. The non natural, argues Taleb must prove its benefits, not the non natural, There is a clear difference between no evidence of disease and evidence of no disease. There is no evidence in favour of the reaction of swelling yet we apply cold to trauma. We do not need evidence of a drug being harmful to claim that it is dangerous. This is the principle of empiricism. The principle of nonlinearity in response, is that iatrogenics is non linear so we should not take risks with healthy people but we should take huge risks with those in danger. Apply medicine where there is the biggest payoff. Pharma plays on the interventionism of doctors. “We are built to be dudes for theories. But theories come and go; experience stays.”
Chapter 22
The increase in life expectancy has been mainly because of medicine’s benefits in cases where the condition is lethal, in convex high payoff cases. The main cause of the low life expectancy in the past centuries is because of the weight of birth and infant death on the statistic of an average age of death. Reliance on painkillers encourages people to avoid addressing the cause of the headache. Food tastes better after exertion. Starvation may be a healthy stressor. One of the jobs of religion is to tame abundance and to create artificial stressors like compulsory fasts. Breaking a fast feels like the exact opposite of a hangover. People often see the benefit of exercise induced stress but don’t see the benefits of food intake stress.
BOOK VII
This chapter is one of the most interesting reads of the book and the one with the most weight in the books as it gives a direction, what to do with the information synthesised by the author. The complexity of this is challenged by applying one of the principles of the books and simplifying the system to eliminate redundant complexity.
Chapter 23
The demise of this is that there are suckers and winners and that for an individual to win another one must loose. There are a set of ethics and morality behind this, there are transfers of fragility done purposefully to obtain benefit. We are obsessed with the idea of sacrifice, for a bigger cause. It is even a traditional thing to be the bearer of great respect when an individual sacrifices themselves. It is the story of the archetypal hero. There is a courage in risk blindness. Courage is often identified with acts of renunciation and altruism some people hailed as heroes are in some cases lucky successes that are completely random.
The effects of transfers of fragility are becoming more acute as modernity is making more individuals become fragile. Hammurabi’s code, an ancient writing states the need of a return to the symmetry of fragility. It states that the operators of systems should be directly exposed to the failure of said systems. It is stated for the realm of architecture but it can be extrapolated to any system. Romans made bridge engineers spend time under the bridge they built. They had “skin in the game”.
In the old days, privilege came with obligation, in the case of war the chief was there in the front lines, not behind a desk. Factum tacendo, crimen facias acrius.
There is no punishment for people who influence global systems with their opinions and turn to be wrong. Post dictions always look smarter that predictions, words must be backed by actions. Suckers try to win arguments, non-suckers try to win. To burn one’s vessels, a typical conquistador thing to do is to burn ships on arrival to a new land to either conquer or die trying, there is no intermediate option as there in no way to go home. This is what most thinkers don’t do. One of the examples Taleb gives is Harry Markowitz, Nobel Price on his work on portfolio selection who doesn’t use his own formulas on his portfolio. Taleb talks about what he calls champagne socialism, what the french call la gauche caviar, people who preach a kind of lifestyle but when the truth comes live very differently to what they preach.
Taleb criticises the commercial work because it only works through via positiva and never through via negativa. Commercial corporations don’t gain if you avoid using their product. Taleb argues against advertising and marketing arguing that “word of mouth is the best filter”. Anything that needs advertisement is in Taleb’s opinion either harmful or an inferior product. “Humans are restricted by shame, corporations are not, never trust the words of a man who is not free”.
Chapter 24
“Being self-owned is a state of mind”. Taleb discusses the hedonic treadmill in which, like a hamster, a person keeps running but staying in the same place. “He is free who own his own opinion.”
Taleb talks about the ethics of the fiscal system and introduces a conversation with Alan Blinder, former vice chairman of the federal reserve who after retiring from the FR Bank sold investment products aimed at cheating taxes legally. When questioned about the ethics of this transition, Blinder just answers that what he is doing is legal. In third world countries, oficials get explicit bribes, in the form of glass doors. “People fit their beliefs into their actions rather tant their beliefs into actions.” The first kind of people are opportunists, the other are protected from the pseudo ethic game.
The problem with some big data models is nonlinearity, there are many variables but to little of a sample per variable. Some of the collectivized knowledge in academia is taken as dogma because “it is what everybody teaches and uses in papers”. Departments need something to teach.
Chapter 25
This short chapter serves as the conclusion to the book. The golden rule of ethics is don’t do unto others what you don’t want them to do to you.” Taleb urges the reader to apply the teachings of the book to casual life.