People kept suggesting I read Antifragile: Things That Gain from Disorder by Nicholas Nassim Taleb, so I finally dug in. The book has one central concept: systems are antifragile when exposure to volatility tends to make them stronger. Taleb writes about how the concept surrounds us, but up until now hasn’t had a word.
We describe things as fragile when stressors makes them worse. The porcelain tea cup, for example. Sitting unperturbed on a table it is perfectly fine. But a bump to the table could send it to the floor. There’s a good chance it breaks. Few scenarios or events would make the tea cup stronger.
Many consider robust to be the opposite of fragile. But robust things stay the same when exposed to variability. They don’t improve.
But there are things that do improve with stress.
The fauna and flora of the Earth through evolution. Dinosaurs went extinct 65 million years ago due to an extreme event. But life survived and was stronger afterwards. Humanity, a single species, has grown taller, more attractive, and smarter over generations. Our bodies get stronger when we work them. Life is antifragile.
One important note here. The system often strengthens at the expense of the level below. It is a hierarchy. Our muscles strengthen when the stress from working out damages and kills cells. Antifragility flows like this all the way up.
The author references an interesting point made about the Titanic. Had it not hit an iceberg and sunk, we’d have likely continued making larger ships in the same fashion until one did. That tragedy would no doubt have taken more lives.
This is one of the reasons air travel is so safe. Every catastrophe results in better safety for all future flights.
So we see this in life and knowledge, but also in many complex systems. The economy left untouched operates the same way. The strong companies survive while many fail. So many problems arise when we manipulate the system, even with great intentions.
Interventionalism
Feeling the need to change the system is interventionalism. We do it across many things because we seek to improve a situation.
Medicine is a great example of this. Before penicillin, doctors likely killed more people than they saved. In fact, in the 1800’s Ignaz Semmelweis observed that giving birth in a hospital was more dangerous than giving birth at home.
We hope that by intervening in a complex system, we improve the results. These interventions often cause unintended side effects that ripple out and worsen other aspects. It’s not to say we shouldn’t act. Many interventions are positive. But one of our most effective actions is often inaction.
Unfortunately, that’s not how we’ve structured society. People don’t get credit for not doing something. It’s why managers micro-manage. It’s why reviewers always find something to fix. Give an article to ten editors and they likely will all find different things to change about it—many of those wrong or subjective.
An interesting case study about this follows a cohort of 389 children with chronic throat issues. The doctors declared 174 of those children needed surgery to remove their tonsils. The 215 who didn’t need the surgery were presented in front of different doctors, who prescribed surgery for 99 of them. Different doctors then saw the remaining 116 and scheduled 52 more for surgery.
On the one hand, the doctor could do nothing and let the problem resolve itself. If the problem instead gets worse, it’s easy to sue for negligence. On the other, if the doctor intervenes when it would have resolved itself, we’re none the wiser. If the surgery causes problems, you signed the waiver knowing the risks, didn’t you?
This leads to iatrogenics. The urge to do something to make things better that instead leads to “death by healer.” It’s recognized in medicine, and is becoming more recognized in other complex fields.
Optionality
Taleb defines optionality as the property of asymmetric upside with corresponding limited downside. Ironically, we saw this with the banking crisis of the late 2000’s. The banks made many bad bets by treating subprime mortgages as reliable bonds. When more and more lenders foreclosed on homes, the market crashed. Had the federal government not bailed out the banks, many of them could have gone out of business. Instead, the bail out limited the downside of these bad bets. The upside—had it been a good idea—would give enormous profits. The profits were privatized, the losses socialized. The many benefit the few.
Then there are CEO’s with golden parachutes. With great performance, Chief Execs can become billionaires. With terrible performance—or bad luck—they still walk out with millions.
Optionality explains why we are a litigious society. If you sue, the worst that can happen is the court dismisses it or you lose the trial. They could countersue, but usually it’s not worth it. But if you win the trial? You could win incredible sums. We’ve all heard the stories.
When you can structure a situation so that the upsides outweigh the downsides and the downsides are limited, you have optionality. You don’t have to be particularly smart, and you can be wrong more often than you are right. You only have to do two things. Don’t do anything that will obviously hurt yourself. Recognize good outcomes and repeat the action that led to them.
Absence of Evidence is Not Evidence of Absence
People are quick to mistake not seeing something happen to be evidence that it doesn’t happen. It’s a common fallacy.
Over the last several years we’ve seen many floods that media outlets declare as once-in-500 years natural disasters.
Well. Wait a second. How can they all be so rare and yet so common these days?
Not even considering global warming or other possible causes, one of the obvious is we don’t have the history or knowledge. It is challenging to detect risk for an event. Our models are almost always wrong.
Very few people predicted the 2007 stock market crash would happen. In fact, if you had looked at people’s projections at the beginning of that year, it is likely would have been positive.
This is the author’s point on the value of antifragility. We can more easily detect if something is fragile than its risk. Fukushima, for instance, was in a position that was susceptible to tsunami if one were to happen. But when built it was assumed the risk of one was low enough to warrant a Nuclear plant’s construction at the location.
Black Swans
Taleb published Black Swan years ago, and touches on it in this book. Black swans are exceptionally rare events, which can be either massively positive or negative. The tsunami to hit Fukushima was one. The stock market crash another. Creating a unicorn startup like AirBNB would be an example of a positive one.
When we look at our chances of something, we judge it by what we’ve seen in the past. That doesn’t tell us what’s possible, just what’s happened before that we’ve seen. If we suffer a record-breaking earthquake, we must realize the previous record was at one time never seen before either.
Personal Takeaways
So working out seems like a no-brainer. The body gets better when exposed to moderate stresses and given time to recover. I’ve taken this to heart and began running and lifting weights again. Intermittent fasting is another healthy behavior. I also suppose this would apply to cold showers and limiting the use of A/C or heat. Damn. I guess I need to try them.
The book discusses Stoicism for a significant part. I’ve wanted to read Seneca’s works for a while now, so I bumped it up a few spots on my reading list.
In general, I’m looking for opportunities that have great upside and limited downsides. Writing is one of those. Meditation, too. Learning useful skills as well.
It’s also why I’m more convinced than ever to reduce my debt and move back into an apartment. With an apartment, I have the option to move to find work or to cut my current commute. With a house, I’m stuck on that plot. Still wonder about the financials in the longterm, but I’ll figure that out.
My next post will be about applying what I’ve learned from Antifragile to software development. There are a ton of connections to industry best practices, so I cannot wait to explore them.
