Just as human bones get stronger when subjected to stress and tension, many things in life benefit from stress, volatility, and turmoil. What Nicholas Taleb identified and called antifragile are things that not only gain from chaos but need it in order to survive and flourish.
In The Black Swan, Taleb had explained how highly improbable and unpredictable events underlie almost everything about our world. In Antifragile: Things That Gain From Disorder, Taleb shows how uncertainty can be desirable, even necessary. The antifragile is beyond the resilient or robust. The resilient resists shocks and stays the same; the antifragile gets better and better.
Nassim Nicholas Taleb
Nassim Nicholas Taleb (born 1960) is a Lebanese-American essayist, scholar, mathematical statistician, and former option trader and risk analyst, whose work concerns problems of randomness, probability, and uncertainty. His 2007 book The Black Swan has been described by The Sunday Times as one of the twelve most influential books since World War II.[2]
Taleb is the author of the Incerto, a five volume philosophical essay on uncertainty published between 2001 and 2018 (of which the most known books are The Black Swan and Antifragile). He has been a professor at several universities, serving as a Distinguished Professor of Risk Engineering at the New York University Tandon School of Engineering since September 2008. He has been co-editor-in-chief of the academic journal Risk and Decision Analysis since September 2014. He has also been a practitioner of mathematical finance, a hedge fund manager, and a derivatives trader.
He criticized the risk management methods used by the finance industry and warned about financial crises, subsequently profiting from the late-2000s financial crisis. He advocates what he calls a “black swan robust” society, meaning a society that can withstand difficult-to-predict events. He proposes antifragility in systems, that is, an ability to benefit and grow from a certain class of random events, errors, and volatility as well as “convex tinkering” as a method of scientific discovery, by which he means that decentralized experimentation outperforms directed research. (From Wikipedia)
80 Quotes from Antifragile: Things That Gain From Disorder
1 – Nature likes to over-insure itself. Layers of redundancy are the central risk management property of natural systems. We humans have two kidneys–this may even include accountants…
2 – Some things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventure, risk, and uncertainty. Yet, in spite of the ubiquity of the phenomenon, there is no word for the exact opposite of fragile. Let us call it antifragile. Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better.
3 – We can almost always detect antifragility (and fragility) using a simple test of asymmetry: anything that has more upside than downside from random events (or certain shocks) is antifragile; the reverse is fragile.
4 – Injecting some confusion stabilizes the system.
5 – This is the central illusion in life: that randomness is a risk, that it is a bad thing.
6 – Much of modern life is preventable chronic stress injury.”
7 – The fragile wants tranquility, the antifragile grows from disorder, and the robust doesn’t care too much.”
8 – Simply, people need to be blinded by knowledge—we are made to follow leaders who can gather people together because the advantages of being in groups trump the disadvantages of being alone. It has been more profitable for us to bind together in the wrong direction than to be alone in the right one. Those who have followed the assertive idiot rather than the introspective wise person have passed us some of their genes. This is apparent from a social pathology: psychopaths rally followers.
9 – Don’t cross a river if it is four feet deep on average.
10 – But it remains the case that you know what is wrong with a lot more confidence than you know what is right.
11 – If you want to get an idea of a friend’s temperament, ethics, and personal elegance, you need to look at him under the tests of severe circumstances, not under the regular rosy glow of daily life.
12 – Unlike a well-defined, precise game like Russian roulette, where the risks are visible to anyone capable of multiplying and dividing by six, one does not observe the barrel of reality.”
13 – At no point in history have so many non risk takers–that is, those with no personal exposure, exerted so much control.
14 – Technology is the result of antifragility, exploited by risk takers in the form of tinkering and trial and error, with nerd driven design confined to the back stage. Engineers and tinkerers develop things, while history books are written by academics.
15 – Less is more and usually more effective…but simplicity is not so simple to attain. Steve Jobs figured out that you have to work hard, to get your thinking clean, to make it simple.
16 – This so called ‘worst case event,’ when it happened, exceeded the worst case at the time.
17 – Well nature, unlike fragilista Greenspan, prepares for what has not happened before, assuming worse harm is possible.
18 – When you don’t have debt, you don’t care about your reputation in economic circles. And, somehow, it is only when you don’t care your reputation that you tend to have a good one.
19 – You pick up a language best thanks to situational difficulty, from error to error, when you need to communicate under more or less straining circumstances.
20 – If nature ran the economy, it would not continuously bail out its living members to make them live forever, nor would it have permanent administrations and forecasting departments that try to outsmart the future.
21 – When you are fragile, you depend on things following the exact planned course, with as little deviation as possible, for deviations are more harmful than helpful. This is why the fragile needs to be very predictive in its approach, and conversely, predictive systems cause fragility. When you want deviations and you don’t care about the possible dispersion of outcomes that the future can bring, since most will be helpful, you are antifragile.
22 – Good systems, such as airlines, are setup to have small errors, independent from each other. Or, in effect, negatively correlated with each other, since mistakes lower the odds of future mistakes.
23 – It is easy to assess iatrogenics when the surgeon amputates the wrong leg, or operates on the wrong kidney, or when the patient dies of a drug reaction. But when you medicate a child for an imagined or invented psychiatric disease, say, ADHD or depression, instead of letting him out of the cage, the long term harm is largely unaccounted for.
24 – An agency problem, for instance, is present with the stock broker and medical doctor, whose ultimate interest is their own checking account, not your financial or medical health, respectively, and who gives you advice that is geared to benefit themselves.
25 – Entrepreneurs are selected to be just doers, not thinkers, and doers do–they don’t talk. And it would be unfair, wrong and down right insulting to measure them in the talk department.
26 – Corporations are in love with the idea of the strategic plan…it makes the corporation option blind, as it gets locked into a non-opportunistic course of action. Almost everything theoretical in management, from Taylorism to all productivity stories, upon empirical testing, has been exposed as pseudo-science.
27 – Perhaps, thus, he should have asked himself ‘what is not intelligible to me is not necessarily unintelligent? Perhaps there is a realm of wisdom from which the logician is exiled?’ Nietzsche
28 – …exposure is more important than knowledge. Decision effects supersede logic. Textbook knowledge misses a dimension: the hidden asymmetry of benefits, just like the notion of average. The need to focus on the payoff from your actions instead of studying the structure of the world, or understanding the true and the false, has been largely missed in intellectual history.
29 – It’s simple. I just remove everything that is not David. Michaelangelo
30 – People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I am actually as proud of the things we haven’t done as the things I have done. Innovation is saying no to a thousand things. – Steve Jobs
31 – A half man, or rather half person, is not someone who does not have an opinion, just someone who does not take risks for it.
32 – A blatant manifestation of the agency problem is the following: there is a difference between a manager running a company that is not his own and an owner-operated business, in which the manager does not need to report numbers to anyone but himself, and for which he has a downside. Corporate managers have incentives without disincentives.
33 – ..and marketing beyond conveying information is insecurity.
34 – My major hobby is teasing people who take themselves and the quality of their knowledge too seriously.
35 – We should reward people, not ridicule them, for thinking the impossible.
36 – We are witnessing the rise of a new class of inverse heroes, that is, bureaucrats, bankers, Davos-attending members and academics with too much power and no real downside and/or accountability. They game the system while citizens pay the price.
37 – You need perfect robustness for a crack not to end up crashing the system. Given the unattainability of perfect robustness, we need a mechanism by which the system regenerates itself continuously by using, rather than suffering from, random events, unpredictable shocks, stressors, and volatility.
38 – You cannot say with any reliability that a certain remote event or shock is more likely than another, but you can state with a lot more confidence that an object or a structure is more fragile than another should a certain event happen.
39 – Modernity has replaced ethics with legalese, and the law can be gamed with a good lawyer.
40 – If you see fraud and do not say fraud, you are a fraud.
41 – The sword of Damocles represents the side effect of power and success: you cannot rise and rule without facing this continuous danger – someone out there will be actively working to topple you.
42 – Fiscal deficits have proven to be a prime source of fragility in social and economic systems.
43 – For society, the richer we become, the harder it gets to live within our means. Abundance is harder for us to handle than scarcity.
44 – When I was a pit trader, I learned that the noise produced by the person is inverse to the pecking order: as with mafia dons, the most powerful traders were the least audible. One should have enough self-control to make the audience work hard to listen, which causes them to switch into intellectual overdrive.
45 – Much of modern life is preventable chronic stress injury.”
46 – When you are fragile, you depend on things following the exact planned course, with as little deviation as possible – for deviations are more harmful than helpful. This is why the fragile needs to be very predictive in its approach, and, conversely, predictive systems cause fragility.
47 – 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.
48 – 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.
49 – The problem is that by creating bureaucracies, we put civil servants in a position to make decisions based on abstract and theoretical matters, with the illusion that they will be making them in a rational, accountable way.
50 – Stability is not good for the economy: firms become very weak during long periods of steady prosperity devoid of setbacks, and hidden vulnerabilities accumulate silently under the surface – so delaying the crises is not a very good idea.
51 – In a computer simulation, 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.”
52 – Absence of political instability, even war, lets explosive material and tendencies accumulate under the surface.
53 – The problem with artificially suppressed volatility is not just that the system tends to become extremely fragile; it is that, at the same time, it exhibits no visible risks.
54 – It’s much easier to sell “Look what I did for you” than “Look what I avoided for you.” Of course a bonus system based on “performance” exacerbates the problem.
55 – The more data you get, the less you know what’s going on.
56 – Political and economic “tail events” are unpredictable, and their probabilities are not scientifically measurable. No matter how many dollars are spent on research, predicting revolutions is not the same as counting cards; humans will never be able to turn politics and economics into the tractable randomness of blackjack.
57 – Warren Buffett tries to invest in businesses that are “so wonderful that an idiot can run them. Because sooner or later, one will.”
58 – To become a successful philosopher king, it is much better to start as a king than as a philosopher.
59 – Success brings an asymmetry: you now have a lot more to lose than to gain.
60 – For my last job, I wrote my resignation letter before starting the new position, locked it up in a drawer, and felt free while I was there.
61 – Yogi Berra said, “In theory there is no difference between theory and practice; in practice there is.”
62 – We don’t put theories into practice. We create theories out of practice.”
63 – Do not invest in business plans but in people.
64 – In spite of what is studied in business schools concerning “economies of scale,” size hurts you at times of stress; it is not a good idea to be large during difficult times.
65 – I once testified in Congress against a project to fund a crisis forecasting project. The people involved were blind to the paradox that we have never had more data than we have now, yet have less predictability than ever.
66 – As shown from the track record of prophets: Before you are proven right, you will be reviled; after you are proven right, you will be hated for a while, or what’s worse, your ideas will appear to be “trivial” thanks to retrospective distortion.
67 – We confuse the necessary and the causal: because all surviving technologies have some obvious benefits, we are led to believe that all technologies offering obvious benefits will survive.”
68 – A writer with arguments can harm more people than any serial criminal.”
69 – Never ask anyone for their opinion, forecast, or recommendation. Just ask them what they have – or don’t have – in their portfolio.”
70 – Never ask the doctor what you should do. Ask him what he would do if he were in your place. You would be surprised at the difference.
71 – Myles Burnyeat provides the example of a philosopher who puzzles about the reality of time, but who nonetheless applies for a research grant to work on the philosophical problem of time during next year’s sabbatical – without doubting the reality of next year’s arrival.”
72 – 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?”
73 – If you have more than one reason to do something (choose a doctor or veterinarian, hire a gardener or an employee, marry a person, go on a trip), just don’t do it. It does not mean that one reason is better than two, just that by invoking more than one reason you are trying to convince yourself to do something. Obvious decisions (robust to error) require no more than a single reason.
74 – If there is something in nature you don’t understand, odds are it makes sense in a deeper way that is beyond your understanding. So 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.”
75 – Trial and error is freedom.
76 – Difficulty is what wakes up the genius”
77 – 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.
78 – I want to live happily in a world I don’t understand.
79 – This is the tragedy of modernity: as with neurotically overprotective parents, those trying to help are often hurting us the most.
80 – The best way to verify that you are alive is by checking if you like variations. Remember that food would not have a 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.
Trackbacks/Pingbacks