Antifragile (2012) | Nassim Taleb
Antifragile, is like if the stoics had a 21st century background in risk, volatility and randomness.
Taleb onced talked at a podcast about the how this book came to fruition, which was that after the book: Black Swan; he realized while we cannot and will never control when and how black swans will happen, we can manage our responses. In Antifragile, he writes we can't predict Black Swans but we can manage our exposures.
He opens with the three types of exposures; in which one is either fragile, robust or antifragile. Fragile things do not like variation. The Robust merely absorbs over it. Antifragile is when variations make one stronger. In Greek Mythology, the story of the Sword of Damocles illustrates Fragility; the Phoenix as Robustness; and the Hydra as Antifragility.
Throughout the book, Taleb argues it from different angles and examples; politics, medicine, ethics along with his signature style of writing.
A couple of early interesting notes:
Taleb onced talked at a podcast about the how this book came to fruition, which was that after the book: Black Swan; he realized while we cannot and will never control when and how black swans will happen, we can manage our responses. In Antifragile, he writes we can't predict Black Swans but we can manage our exposures.
He opens with the three types of exposures; in which one is either fragile, robust or antifragile. Fragile things do not like variation. The Robust merely absorbs over it. Antifragile is when variations make one stronger. In Greek Mythology, the story of the Sword of Damocles illustrates Fragility; the Phoenix as Robustness; and the Hydra as Antifragility.
Throughout the book, Taleb argues it from different angles and examples; politics, medicine, ethics along with his signature style of writing.
A couple of early interesting notes:
- The record shows that, for society, the richer we become, the harder it gets to live within our means. Abundance is harder for us to handle than scarcity.
- How do you innovate? First try to get into trouble.
- On Love, 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.
- (When you think about it) we benefited the most from those who have actively tried-but eventually failed-to harm us.
- Every plane crash brings us closer to safety, improves the system, and makes the next flight safer.
- Both your failures and successes will give you information. But, and this is one of the good things in life, sometimes you only know about someone's character after you harm them with an error for which you are solely responsible.
- On Politics, Taleb argues Switzerland is an antifragile country. Antifragile because it has no central government, it is largely built of town states. In records, It has one of the lowest levels of education, its model of education is based on apprenticeship, not on theoretical ones, yet one of the most successful.
- Pruning plants make them stronger. Some randomness is beneficial.
- There is a sweet spot for intervention. There should be a protocol when to intervene and when to let the system heal itself.
- What is non-measurable and non-predictable will remain non-measurable and non-predictable.
One section is about stoicism, particularly Seneca, where Taleb notes how Seneca deliberately writes off material possessions. Further he goes on to say that Stoicism is about the domestication, not necessarily the elimination of emotions. And that the modern stoic sage is someone who transforms fear into prudence, pain into information, mistakes into initiation, and desire into undertaking. Again similar to the stoic teachings or to Viktor Frankl's, "Invest in good actions. Things can be taken away from us-not good deeds and acts of virtue."
He also digs deeper into the Barbell Strategy or Bimodal; on how it is important to manage the downside more than the upside. And to place bets on high risk and low risk, not in the middle. Barbell is the domestication, not the elimination of uncertainty.
The next part gets heavy into a philosophical style discourse of Optionality, Innovation, Less is More, and how the significant can only be revealed through practice. He goes on to tell also of epiphenomenon - an illusion of cause and effect. Thinking that Classroom Education leads to wealth, when really it comes from wealth. He writes the following tips:
- Look for optionality; Rank things according to optionality
- Preferably with open ended payoffs
- Do not invest in business plans; but in people
- Make sure you are barbelled
Again a couple notes:
- Be an enlightened amateur
- Trial and Error is freedom
- Exposure if more important than knowledge. Decision effects supersede logic.
- For black swan events, the typical response has been " we need better computation" instead of the more effective "modify your exposure"
The next texts come about size and fragility. To which Taleb writes: Fragility is simply vulnerability to the volatility of the things that can affect it; and that it stems from non linear effects. For the fragile; the cumulative effect of small shocks is smaller than the single effect of an equivalent large shock. For the antifragile: shocks bring more benefits as their intensity increases. He also devises a fragility/antifragility detection heuristic: which is if the leading/lagging metric increases/decreases non-linearly.
One of the more interesting concepts written in the book is Via Negativa, originally a concept in theology meaning removing what is not. An example given to illustrate was that of Michelangelo saying from the block of stone, he is simply removing what is not David. Taleb goes on to relate this from other sides. Negative knowledge (what is wrong, what does not work) is more robust to error than Positive knowledge (what is right, what works). Another related to this is the concept of "Less is more".
About time and fragility. He writes time is the ultimate variation. What is fragile will eventually break. When we imagine the future, it mostly comes from our past. The technologies we have at present, those that seem trivial are the ones that survived the past. Here Taleb brings up the Lindy Effect. Perishable things are more Gaussian. Non Perishable things last longer. A book that has sold good for ten years, will almost always do well for another ten years. In Ancient times, Prophets were more of telling what not to do, than what will be ( via negativa again). Ending the section, Taleb writes "There are secrets to our world that only practice can reveal, and no opinion or analysis will ever capture in full."
In Medicine, Taleb writes of Iatrogenics, and conversely Mithridatization/Hormesis. He makes a case that for small discomforts it is best to let the body's systems to heal because the risk and effect of iatrogenics is higher. For extreme cases, it is all go for interventionism. An example given is of antibiotics. Too much use of it, makes the body much more weaker to other illnesses.
In Life, Taleb writes "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 (again via negativa). Intermittent fasting is also given space in this section. How people switched to a Mediterranean diet upon release of a study suggesting they have the longest life expectancy, when the 2nd order effects people go on fasts sometimes for long periods of time in that area through faith and religion.
In Ethics, Taleb introduces the Greek term Megalopsychon. "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 halfmen (small men who don't risk anything) are similar to barks by nonhuman animals: you can't feel insulted by a dog." This section becomes much more tricky, especially when what you do transfers fragility to another. Taleb stresses if you are making a statement, you need to have skin in the game. "If you see fraud and don't say fraud, you are a fraud".
One of the more interesting concepts written in the book is Via Negativa, originally a concept in theology meaning removing what is not. An example given to illustrate was that of Michelangelo saying from the block of stone, he is simply removing what is not David. Taleb goes on to relate this from other sides. Negative knowledge (what is wrong, what does not work) is more robust to error than Positive knowledge (what is right, what works). Another related to this is the concept of "Less is more".
About time and fragility. He writes time is the ultimate variation. What is fragile will eventually break. When we imagine the future, it mostly comes from our past. The technologies we have at present, those that seem trivial are the ones that survived the past. Here Taleb brings up the Lindy Effect. Perishable things are more Gaussian. Non Perishable things last longer. A book that has sold good for ten years, will almost always do well for another ten years. In Ancient times, Prophets were more of telling what not to do, than what will be ( via negativa again). Ending the section, Taleb writes "There are secrets to our world that only practice can reveal, and no opinion or analysis will ever capture in full."
In Medicine, Taleb writes of Iatrogenics, and conversely Mithridatization/Hormesis. He makes a case that for small discomforts it is best to let the body's systems to heal because the risk and effect of iatrogenics is higher. For extreme cases, it is all go for interventionism. An example given is of antibiotics. Too much use of it, makes the body much more weaker to other illnesses.
In Life, Taleb writes "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 (again via negativa). Intermittent fasting is also given space in this section. How people switched to a Mediterranean diet upon release of a study suggesting they have the longest life expectancy, when the 2nd order effects people go on fasts sometimes for long periods of time in that area through faith and religion.
In Ethics, Taleb introduces the Greek term Megalopsychon. "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 halfmen (small men who don't risk anything) are similar to barks by nonhuman animals: you can't feel insulted by a dog." This section becomes much more tricky, especially when what you do transfers fragility to another. Taleb stresses if you are making a statement, you need to have skin in the game. "If you see fraud and don't say fraud, you are a fraud".
- Never ask anyone for an opinion, forecast or recommendation, just ask them what they have or don't have in their portfolio.
- Never ask the doctor what you should do. Ask him what he would do if he were in your place.
- With someone making big pronouncements, ask what someone is to gain from making the argument come to life.
- Big Data is just cherrypicking in an industrial level. With too much variable, comes a higher number of spurious correlations.
A refinement from the conclusion section:
"Everything gains or loses from volatility. Fragility is what loses from volatility and uncertainty"
Finally Taleb closes with something close to what some of the stoics have written.
"The glass is dead; living things are long volatility. The best way to verify that you are alive is by checking if you variations. Remember that food would not have taste if it weren't for hunger; results are meaningless without effort, joy without sadness, convictions without uncertainty, and an ethical life isn't so when stripped of personal risks."
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