Antifragile: Things That Gain from Disorder

Nassim Taleb, “Antifragile: Things That Gain from Disorder” Random House , 2012, 426 pps  

I became a fan of Taleb when reading his book “Black Swan”.   Because of my admiration for that book, I read this one.  While there are some worthwhile items in this book to think about, it wanders and does not make compelling cases for the themes.  Maybe he wrote this as part of the “publish or perish” culture in academia, of which he is a member. He has worked as a derivatives trader and quantitative analyst, and now who holds the title of distinguished professor of risk engineering at the Polytechnic Institute of New York University

This book maintains that Black Swan threats are increasing as the world becomes more and more interconnected (“flat”; he really dislikes Friedman, a lot), and more and more institutions like banks and, apparently, auto companies are becoming too big to fail.  To become antifragile (stronger when put under stress; like nature has modeled with evolution) we must not allow institutions to Not fail or be too large to not allow them to fail.  It is the same as suppressing all forest fires: we only create the conditions whereby Yellowstone was almost entirely devastated by fire.

My Notes:

Pg. 3: Antifragility is beyond resilience or robustness.  The resilient resists shocks and stays the same; the antifragile gets better.  This antifragile property is behind everything that has changed with time: evolution, culture, ideas, revolutions, political systems, technological innovation, cultural and economic success, corporate survival, the rise of cities, cultural and legal systems, bacterial resistance…even our own existence as a species on this planet.  The antifragile loves randomness and uncertainty.

Pg. 5:  We can almost always detect antifragility 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.

Pg. 67:  Evolution is antifragile: it is in love with stressors randomness, uncertainty, and disorder-while individual organisms are relatively fragile, the gene pool takes advantage of shocks to enhance its fitness.

Pg. 73:  Good systems such as airlines are set up to have small errors, independent from each other—or, in effect, negatively correlated to each other, since mistakes lower the odds of future mistakes.  This is one way to see how one environment can be antifragile (aviation) and the other fragile (modern economic life with “earth is flat” style interconnectedness).  If every plane crash makes the next one less likely, every bank crash makes the next one more likely.

Pg. 74:  For the economy to be antifragile and undergo what is called evolution, every single individual business must necessarily be fragile, exposed to breaking—evolution needs organisms (or their genes) to die when supplanted by others, in order to achieve improvement, or to avoid reproduction when they are not as fit as someone else.  (Banks too-big-to-fail do not fit).

Pg. 77:  The great benefit of the Enlightenment has been to bring the individual to the fore, with his rights, his freedom, his independence, his “pursuit of happiness” (whatever that “happiness” means), and, most of all, his privacy.  In spite of its denial of antifragility, the Enlightenment and the political systems that emerged from it freed us (somewhat) from the domination of society, the tribe, and the family that had prevailed throughout history.

Pg. 106:  Artificially constrained systems become prone to Black Swans.  Such environments eventually experience massive blowups catching everyone off guard and undoing years of stability or, in almost all cases, ending up far worse than they were in their initial volatile state.

Pg. 128:  The famine in China that killed 30 million people between 1959 and 1961 can enlighten us about the effect of the state “trying hard.”  Study has revealed that famine was more severe in areas with higher food production in the period before the famine began, meaning that it was government policy of food distribution that was behind much of the problem, owing to the inflexibility in the procurement system.  And indeed, a larger than expected share of famine over the past century has occurred in economies with central planning.

Pg. 181:  Nature knows how to select: about half of all embryos undergo a spontaneous abortion—easier to do so than design the perfect baby by blueprint.  Nature simply keeps what it likes if it meets its standards.  Nature is all about the exploitation of optionality; it illustrates how optionality is a substitute for intelligence.

Pg. 306:  We are moving into the far more uneven distribution of 99/1 across many things that used to be 80/20: 99 percent of Internet traffic is attributable to less than 1 percent of sites, 99 percent of book sales come from less than 1 percent of authors ....  (The source for this statistic is not backed up with a footnote).