Antifragile - Nassim N. Taleb

Personal Thoughts

This is the fourth book from Taleb’s “Incerto” pentalogy. It is by far the thickest and most complex. For beginners with Nassim, I would rather recommend to start with “Black Swan” or “Fooled by Randomness”.

So, I am an absolute fanboy of this book and I believe that it is one of the most powerful books someone can read in his/her 20s. Just to be clear about that statement: I am a Nassim Taleb fanboy and my brain works exactly as he writes this book: Creative chaos disrupting the status quo and then reflecting on what went well and what went badly.

To explain: The reason why I love this book and why I am using Roam Research is that my brain is constantly in an association mode. How do I connect the point of the riff-raffing by Nassim to my preference for it? Well, it is very loosely written, attaches one thought process to the other, connects the ideas of his past books "Black Swan" and "Fooled by Randomness" and is linked to them like my knowledge is linked in Roam: loosely via references.

Anybody, who knows me well, knows that I am a big enemy of the traditional education system in Europe which enables people to become workers, employees, followers of instructions. Let me illuminate you with a completely surprising prediction:That is not what we are supposed to be anymore.We should push people back to obtain more individual responsibility for the actions, re-earn their rights they see as granted and incentivize them to f*cking work again.

So if you think about reading this book: Be aware that it is for crazy people like myself who rather read a complex book in the dark living room than sitting in the park or rowing down the river with friends although the sun shines brightly. Nah, I do not like people, I would rather make up ideas on how to reign.

Content of the Book

BOOK I: THE ANTIFRAGILE - AN INTRODUCTION

Chapter 1: Explains how we missed the word “antifragility” in classrooms. Fragile-Robust-Antifragile as Damocles-Phoenix-Hydra. Domain dependence.

Chapter 2: Where we find overcompensation. Obsessive love is the most antifragile thing outside of economics.

Chapter 3: The difference between the organic and the engineered. Touristification and attempts to suck volatility out of life.

Chapter 4: The antifragility of the whole often depends on the fragility of the parts. Why death is a necessity for life. The benefits of errors for the collective. Why we need risk takers. A few remarks about modernity missing the point. A salute to the entrepreneur and risk taker.

BOOK II: MODERNITY AND THE DENIAL OF ANTIFRAGILITY

Chapter 5: Two different randomness categories, seen through the profiles of two brothers. How Switzerland is not controlled from above. The difference between Mediocristan and Extremistan. The virtues of city-states, bottom-up political systems, and the stabilizing effect of municipal noise.

Chapter 6: Systems that like randomness. Annealing inside and outside physics. Explains the effect of overstabilizing organisms and complex systems (political, economic, etc.). The defects of intellectualism. U.S. foreign policy, and pseudostabilization.

Chapter 7: An introduction to naive intervention and iatrogenics, the most neglected product of modernity. Noise and signal and overintervening from noise.

Chapter 8: Prediction as the child of modernity.

BOOK III: A NONPREDICTIVE VIEW OF THE WORLD

Chapter 9: Fat Tony, the smeller of fragility, Nero, long lunches, and squeezing the fragilistas.

Chapter 10: In which Professor Triffat refuses his own medicine and we use Seneca and stoicism as a back door to explain why everything antifragile has to have more upside than downside and hence benefits from volatility, error, and stressors - the fundamental asymmetry.

Chapter 11: What to mix and not to mix. The barbell strategy in life and things as the transformation of anything from fragile to antifragile.

BOOK IV: OPTIONALITY, TECHNOLOGY, AND THE INTELLIGENCE OF ANTIFRAGILITY

Chapter 12: Thales versus Aristotle, and the notion of optionality, which allows you not to know what’s going on—why it has been misunderstood owing to the conflation. How Aristotle missed the point. Optionality in private life. Conditions under which tinkering outperforms design. Rational flâneur.

Chapter 13: Asymmetric payoffs behind growth, little else. The Soviet-Harvard illusion, or the lecturing-birds-how-to-fly effect. Epiphenomena.

Chapter 14: Tension between episteme and trial and error, and the role through history. Does knowledge generate wealth, and if so, which knowledge? When two things are not the same thing.

Chapter 15: Rewriting the history of technology. How, in science, history is rewritten by the losers and how I saw it in my own business and how we can generalize. Does knowledge of biology hurt medicine? Hiding the role of luck. What makes a good entrepreneur?

Chapter 16: How to deal with Soccer Moms. The education of a flâneur.

Chapter 17: Fat Tony argues with Socrates. Why can’t we do things we can’t explain, and why do we have to explain things we do? The Dionysian. The sucker-nonsucker approach to things.

BOOK V: THE NONLINEAR AND THE NONLINEAR

Chapter 18: Convexity, concavity, and convexity effects. Why size fragilizes.

Chapter 19: The Philosopher’s Stone. Deeper into convexity. How Fannie Mae went bust. Nonlinearity. The heuristic to detect fragility and antifragility. Convexity biases, Jensen’s inequality, and their impact on ignorance.

BOOK VI: VIA NEGATIVA

Chapter 20: Neomania: Looking at the future by via negativa. The Lindy effect: the old outlives the new in proportion to its age. Empedocles’ Tile. Why the irrational has an edge over the perceived-to-be-rational.

Chapter 21: Medicine and asymmetry. Decision rules in medical problems: why the very ill has a convex payoff and the healthy has concave exposures.

Chapter 22: Medicine by subtraction. Introduces the match between individuals and the type of randomness in the environment. Why I don’t want to live forever.

BOOK VII: THE ETHICS OF FRAGILITY AND ANTIFRAGILITY

Chapter 23: The agency problem as transfer of fragility. Skin in the game. Doxastic commitment, or soul in the game. The Robert Rubin problem, the Joseph Stiglitz problem, and the Alan Blinder problem, all three about agency, and one about cherry-picking.

Chapter 24: Ethical inversion. The collective can be wrong while individuals know it. How people are trapped into an opinion, and how to set them free.

Detailed Takeaways

The Antifragile - An introduction

• The central theme of the book is "antifragility", which Taleb defines in the Prologue on page 17 as follows:

• "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."Holy sh*t, I am in!

• The most obvious comparison that comes to mind is the tearing of muscle fibers in the act of “hypertrophy”: Overstimulation of the muscle during a movement - for example through heavy weights - in order to tear small fibers which lead to muscle pain you feel after an intense workout. Afterwards, during the repairing procedure, the muscle fibers get thicker, stronger.

• This builds on the arguments in Black Swan: When there's a Black Swan event, the Antifragile can thrive while the fragile will break (down) as it is not built for the pressure.What I take from this statement is that you should build up a structure which supports the antifragile so you may be prepared for Black Swan events which seems counterintuitive first:

• "Fragility implies more to lose than to gain, equals more downside than upside, equals unfavorable asymmetry." while

• "Antifragility implies more to gain than to lose, equals more upside than downside, equals favorable asymmetry."

Between Damocles and Hydra

• As a prefix: I am a huge fan of ancient, archaic stories like the ones from Greek Mythology. The reason is that I do not believe such stories have just survived by randomness. I believe - similarly to Jordan Peterson - that the stories have survived due to the inherent Metaphorical Truth they are containing.

• Taleb uses ancient examples to explain the triad of Fragile, Robust, and Antifragile.

• [[Damocles]], who dines with a sword dangling over his head, is fragile. A small stress to the string holding the sword will kill him.

• The [[Phoenix]], which dies and is reborn from its ashes, is robust. It always returns to the same state when suffering a massive stressor.

• But the [[Hydra]] demonstrates Antifragility. When one head is cut off, two grow back.

Streisand Effect

• The [[Streisand Effect]] & Criticism: This is also demonstrated in "The Streisand Effect," where the desire to kill an idea can directly lead to its proliferation. From the [[Prohibition]] of alcohol, to banned books or the popularity of [[Ayn Rand]] and the idea of [[Objectivism]] despite her aggressive detractors.

• A more metaphorical example would be to try to not think of a pink elephant and see what happens.

Overcompensation & Overreaction Everywhere

• Fragile & Antifragile Jobs: Taleb also shows the [[Dichotomy]] between certain lines of work and their fragility.

• As an author, for example, nothing he can do that generates attention will reduce the sale of his books. However, if you're a midlevel executive employee at any company, you will need to be careful how you behave in and outside of your workplace. Especially today you're extremely fragile as the evaluation of your actions lies in the hands of other people

• And then again at the lower end of the spectrum of quality work, e.g. a taxi driver or a plumber, you may find more freedom because the focus of the people is more related to your service than your behavior.

• Objectively speaking, you should always be evaluated with the performance of service you deliver. Sincerely subjective opinion: The higher your position in the hierarchy, the more people focus on your behavior because your service is actually secondary to their perception as they are not dependent on it.

• Taleb also provides a heuristic : People who don't seem to care how they dress or look are robust or antifragile. People who have to wear suits and ties and worry about a bad reputation are fragile.

The Cat and the Washing Machine

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What kills me makes me stronger - Hormesis, Small Stressors & Inverse Hormesis

• Hormesis is also a very good explanation for Antifragility. By taking small doses of a poison, you develop an immunity to it, just as vaccinations use a small dose of a disease to train your body to develop antibodies for an infection.

• We see similar antifragile benefits from fasting, weight lifting, and running. And we also see that depriving systems of these beneficial stressors is harmful, as is evidenced by any person who has never been hungry or never exercised.

• This is a cross reference for last weeks newsletter Rainy Sunday 1: Losing people, Comfort Crisis & a rant about judging where I mention the same benefits from Michael Easter's book The Comfort Crisis

• Taleb thinks the same way as I: We are living in an era of lack of stress which also leads to an accelerated aging.

• To clarify: We are living longer but people are more sick. All of our comfort has been detrimental to our health spans. We thought aging causes bone degradation, but it seems that bone degradation causes aging.

• Competition: This can also be applied to competition. The best horses lose when they compete with slower ones, and win against stronger rivals. Absence of challenge can degrade the best of us. As we are preventing the feeling of losing to a better competitor, we prefer to not compete at all. We are not even competing with ourselves.

• Distraction: Static background noise makes it easier to pick up radio signals. Writing in cafés with background conversations helps you focus. We want a little stress, but not too much.

• Moods: He also points out how many people are dependent on antidepressants although mood swings are a natural part of the human condition.^^

• If someone is truly suicidal, sure, but the necessity of confronting our dark side, to overcome the negative thoughts is a substantial part of life. I would even argue that it is the most important defining conflict of your being which implies a lot about a character.

• Language: Real language learning is done "in the wild," suffering embarrassment for not knowing things and struggling to be understood. The best evidence is provided by any child learning their first language(s). But what people do not understand is that embarrassment is mostly not a feeling that other people put on you but which you put on yourself. Being antifragile means creating a persona which cannot be embarrassed by natural processes.

• Personal thought: The same goes for disgust of natural things like sweat or other body substances of people you are intimate with. Are you kidding me? You want to tell me that you feel aversive to your partner sweating but you can become intimate orally? Does not make sense.

Modernity and the denial of Antifragility

The Souk and the Office Building

• The next topics are the comforts of modern life which are creating problems, mostly arising from removing the natural stressors which under "normal" ancestral circumstances would help us evolving.

• Lions in the Zoo: Consider the life of a lion in a zoo and in the wild. The lion in the zoo might live longer, but is that really a desirable existence? Taleb points out that we used to have "free range humans," before such things as suits and soccer moms and gym machines.

Tell them I love (some) randomness

• Well, I will refer you to [[Fooled by Randomness]] which might be the much more accessible book for you

Naive Intervention & [[Iatrogenics]] #Incentives

• There's a mistaken desire to intervene, particularly from doctors, that can lead to "iatrogenics," which means "harm caused by the healer.”

• Harm from doctors accounts for more deaths than any single cancer.

• There are two forms:

• the obvious iatrogenics, such as amputating the wrong leg, and

• the non-obvious iatrogenics, such as carelessly prescribing antidepressants and ADHD medication.

• [[The Agency Problem]]: Part of the issue comes from the agency problem where the agent (doctor) has different interests from the receiver of his services (the patient).

• This goes back to incentives and how differently people behave if incentives are part of the decision-making game. Cross reference to [[Nudge - Improving Decisions About Health, Wealth and Happiness]]

• Editing: Taleb shares a story of his article being aggressively edited for writing style by the [[Washington Post]]. As a consequence he pulled it back and presented it to [[The Financial Times]]. The editors there proposed only one edit (to correct a date).

• He summarizes it as would I: WaPo, in trying to over-edit, missed the only important error.

• Good Procrastination: Taleb discusses also multiple fallacies of interpreting a situation from [[First Principles]]: E.g. Procrastination which is referred to as one of the biggest obstacles in people's lives.

• But procrastination does not necessarily need to be bad. It is something deep within us that is able to identify the urgency of a problem. We don't procrastinate when a lion is attacking.

• Related, the cure to procrastination on the job is not to force yourself to create systems that fix it, rather, to find an occupation where you do not have to fight your impulses and where you do not procrastinate.

• By the way: Quentin Tarantino was on Joe Rogan's Episode nr 1675 and describes around the one hour mark how he uses essentially procrastination in his swimming pool for creatively reflecting on his work.

A non-predictive view of the world

• Fat Tony and the Fragilistas

• Domain Dependence and a cross-reference to the [[Dunning-Kruger-Effect]]

• Put simply, the Dunning-Kruger Effect is the tendency for people to misjudge their abilities too positively. People with less than average abilities tend to overestimate their true abilities, while those with higher than average abilities tend to not realize how much better they are.

• [[Domain Dependence]] is to assume high competence in one area to other areas where you are actually not competent at all triggering the Dunning-Kruger-Effect. Examples:

• Many statisticians understand statistics, but still get tripped up by simple thought experiments.

• People will take an elevator to the gym to use the stairmaster.

• Hedge Fund Managers think they understand politics

• Politicians think they understand a bit about everything

• While we understand the benefits of stress in medicine and health, we fail to carry it over to other parts of life.

• Small stresses on your income can be good for keeping you risk assessment in check.

• Small fights in your relationship help to grow a stronger bond, and avoid bigger fights (especially with somebody like me or Kevin Rose who keep track of the jabs in order to throw a right hook at some point)

The Procrustean Bed

• Taleb uses the "Procrustean Bed" story to demonstrate how we create harm by reducing variations. Procrustes would capture travelers and put them in his bed, stretching them on a rack if they were too short for it or chopping off their extremities if they were too tall. When we destroy variations to fit a model, we do similar harm.

Buridan's Donkey

• A donkey equally hungry and thirsty stuck between a bale of hay and water will die of starvation and thirst, unable to make a decision between the two.

• However, a random nudge in one direction will solve the problem for him. Randomness can help with decision making and becoming unstuck, but when we try to reduce it, we lose that beneficial stressor.

Stoicism

• Taleb invokes stoic principles on multiple occasions as ways of handling randomness and becoming more antifragile.

• Success: Success can make you fragile, because you now have much more to lose than you did before. You're afraid of becoming poor. The stoic technique of "practicing poverty" helps reduce your fragility from being afraid of losing your wealth.

• Another very important principle is to accept that life is happening neither for nor to you. But you are in power of the way you react to what randomness offers.

The Barbell & the Bimodal Strategy

• The barbell demonstrates an "antifragile balance," the idea of two extremes kept separate, with avoidance in the middle.

• This represents playing it very safe in some areas (staying robust to negative black swans), and taking a lot of small risks in other areas (open to positive black swans), to take advantage of antifragility. While avoiding being "in the middle."

• Takeaway: If you put 90% of your net worth in cash or T bills, and you use the other 10% for extremely aggressive and risky investments, you can never lose more than 10% of your net worth, but you're exposed to massive upside.

• Or, you can take a very safe day job while you work on your literature. You balance the extreme randomness and riskiness of a writing career with a safe job.

• Or, you do a serial barbell, where you have pure action then pure reflection (Seneca, Montaigne).

• To quote more examples:

• "Do crazy things (break furniture once in a while), like the Greeks during the later stages of a drinking symposium, and stay “rational” in larger decisions.

• Trashy gossip magazines and classics or sophisticated works; never middlebrow stuff.

• Talk to either undergraduate students, cab drivers, and gardeners or the highest caliber scholars; never to middling-but-career-conscious academics.

• If you dislike someone, leave him alone or eliminate him; don’t attack him verbally.”

Optionality, Technology, and the Intelligence of Antifragility

Optionality

• Taleb discusses optionality, freedom of choice, as a means of robustness and antifragility. Simply, the more options you have, the more freedom you have to respond to unforseen circumstances, and the less fragile you are to sudden events. Financial independence is an obvious part in it, but there are others.

• Certain fields do not have negative forms, there's no opposite of someone buying your book, so authors have more options because they have less downside.

• Tinkering: Taleb is a big proponent of trial and error, which he calls tinkering, as a way to figure things out and expose yourself to large potential upsides.

• Many great inventions were toys, first. The steam engine was invented by the greeks for amusement, and it took a long time for us to realize it had practical applications.

• The Teleological Fallacy: The error that you know where you are going, and that you knew exactly where you were going in the past, and that others have succeeded in the past by knowing where they were going.

• One form of this is "teaching birds how to fly," where Taleb points out that a Harvard ornithological department could explain the mathematics of flight and how birds wings work, but the birds do not need to understand that in order to fly.

• Taleb also argues against the "master pupil" relationships, arguing that those relationships developed because the people were like minded, not that they became like minded because of the relationship. -- I've come to believe more and more that the right book and idea is not about completely teaching you something new, rather, helping you fully articulate something you have already begun to think about.

• The Green Lumber Fallacy: Taleb tells the story of someone who traded green lumber and made a considerable profit from it, while thinking that green lumber was literally logs painted green, not knowing it was fresh wood. But not knowing this fact did not affect his ability to trade it effectively. So when we assume some information is necessary and important when it really isn't, we're committing the green lumber fallacy.

• As another formulation, you do not need to understand aerodynamics or physics to ride a bicycle.

• Some Rules for Optionality

• Look for optionality and rank things according to their optionality

• Look for things with open ended, not closed ended, payoffs

• Do not invest in business plans but in people, people who could change careers six or seven times

• Make sure you are barbelled, whatever that means in your business

The nonlinear and the nonlinear

• "For the fragile, the cumulative effect of small shocks is smaller than the single effect of an equivalent single large shock.”

• "For the antifragile, shocks bring more benefits (or less harm) as their intensity increases, up to a point." Again an example from weightlifting: lifting a 25 kg weight once is more beneficial than lifting a 250g weight 100 times.

• Your flight never gets in 4 hours early, but you can certainly arrive 4 hours late. Anything unexpected, any shocks, is much more likely to extend the total flying time, ergo flight schedules are fragile.

• Another example: Don't cross a river if it is "on average 4 feet deep.”

Via Negativa (by removal)

• Taleb argues that the solution to many problems in life is by removing things, not adding things.

• Decision Making: If you have more than one reason to do something, don't do it. By invoking more than one reason to do something, you are trying to convince yourself to do it. Obvious decisions (robust to errors) require no more than one good reason.

• The Lindy Effect: For the perishable (food, humans), every additional day in its life means it is closer to dying. For the nonperishable (books, ideas), every additional day of its life can imply a longer life expectancy. If a book has been in print for 100 years, it will likely continue to be read for another 100. But a person who has been alive for 100 years…

• Neomania: There is a class of things, typically technology, where we're obsessed by having the newest version of it. But for classical art, literature, works that have endured, older tends to be better. You likely replace your phone every 2 years, but not the painting on your wall.

• Medicine: There's no good evidence for the benefits of reducing swelling, but we automatically do it as part of the reflex to do something.

• There are also cases where we get some small immediate benefits, and ignore the unknown larger side effects down the line. This would include drugs like Thalidomide, and nutritional interventions like Trans Fat. When we find something that seems to have a "free lunch," like steroids or trans fat, something that helps the healthy withut a clear downside, it is likely there will be a concealed trap somewhere. It's a "sucker's bet."

• Some more real and potential examples: Vioxx, and anti-inflammatory medicine that ends up causing heart issues; Bariatric surgery for overweight people (in place of dieting); Anti-depressants in non-suicidal cases; Cortisone; Disinfectants and other cleaning products; Hormone replacement therapy; Hysterectomies; Cesarean births when the mother won't otherwise die; Whitening of rice, wheat; Sunscreen; Excessive hygiene; Not eating dirt; High fructose corn syrup; Soy milk; Child psychiatry.

• He specifies though that iatrogenics is only a concern when someone is not terminal. IF they are at risk of death, iatrogenics don't matter, it's the little unnecessary interventions that are problematic.

• He also specifies that what mother nature does and has done is rigorous until proven otherwise, but what humans do is flawed until proven otherwise. Nature's fat's turn out to be very healthy, human designed ones, not so much.

• Treating the tumor that will not kill you shortens your life since chemotherapy is toxic.

• Diet: Drink no liquid that isn't at least a thousand years old (wine, water, coffee). Eat nothing invented or re-engineered by humans.

• When consuming plants they would have been regular, meat irregular, so it would make sense to eat mostly plant based most of the time then feast on meat intermittently.

• In nature, we had to expend energy to eat. Lions do not eat then hunt for fun. Fasting is quite good for us, and natural. We do not need to load up on food before doing something, rather, re-feed after.

• Other removals: "I would add that, in my own experience, a considerable jump in my personal health has been achieved by removing offensive irritants: the morning newspapers (the mere mention of the names of the fragilista journalists Thomas Friedman or Paul Krugman can lead to explosive bouts of unrequited anger on my part), the boss, the daily commute, air-conditioning (though not heating), television, emails from documentary filmmakers, economic forecasts, news about the stock market, gym “strength training” machines, and many more.”

• Wealth: He also points out the ill health and early death of many rich people, and argues: "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 (elimination of iatrogenics).”

The Ethics of Fragility and Antifragility

• Two rules for skin in the game:

• Never get on a plane if the pilot is not on board

• Make sure there is also a copilot

• Another rule: "Never ask anyone for their opinion, forecast, or recommendation. Just ask them what they have, or don't have, in their portfolio."

• Watch what people do, not what they say. Many researchers on happiness are earning more than $70,000 a year despite their own research saying it won't make them any happier.

• Only large corporations can afford to sell you things that kill you. Small ones go bust too easily, so there is a risk from taking advice and products that could not survive on small scales.

• Something being marketed is necessarily inferior, otherwise it would not need to be aggressively marketed. Marketing beyond conveying information is insecurity.

• The pursuit of meaning within Big Data has brought about many more spurious and random relationships than meaningful understanding. The false relationships will grow much faster than the real one, simply because chance allows so many more of them to be found.

Quotes

• "If you see a fraud and do not say fraud, you are a fraud."

• "A man is morally free when... he judges the world, and judges other men, with uncompromising sincerity." - [[George Santayana]] #Quote

• "If humans fight the last war, nature fights the next one."

• "Ancestral life had no homework, no boss, no civil servants, no academic grades, no conversation with the dean, no consultant with an MBA, no table of procedure, no application form, no trip to New Jersey, no grammatical stickler, no conversation with someone boring: all life was random stimuli and nothing, good or bad, ever felt like work. Dangerous, yes, but boring, never."

• "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."

• "Convincing - and confident - disciplines, say, physics, tend to use little statistical backup, while political science and economics, which have never produced anything of note, are full of elaborate statistics and statistical “evidence” (and you know that once you remove the smoke, the evidence is not evidence). The situation in science is similar to detective novels in which the person with the largest number of alibis turns out to be the guilty one." #Quote

• "I derived the rule that what is called “healthy” is generally unhealthy, just as “social” networks are antisocial, and the “knowledge”-based economy is typically ignorant." #Quote

• "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 were not 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." #Quote