"The acclaimed author of the influential bestseller The Black Swan, Nicholas Nassim Taleb takes a next big step with a deceptively simple concept: the "antifragile." Like the Greek hydra that grows two heads for each one it loses, people, systems, and institutions that are antifragile not only withstand shocks, they benefit from them. In a modern world dominated by chaos and uncertainty, Antifragile is a revolutionary vision from one of the most subversive and important thinkers of our time"--
The author’s colleague summarized the book succinctly: “Everything gains or loses from volatility. Fragility is what loses from volatility and uncertainty.” But the book is titled “Antifragile” and seeks to focus on “things that gain from disorder.” Any particular restaurant is fragile; it can easily go out of business as a result of an economic slowdown, a change in tastes, the loss of the chief, and many other circumstances. However, the collection of restaurants in the region is antifragile; as any one restaurant goes out of business it is replaced by a more suitable one and the collection of restaurants becomes better. Evolution works in a similar way—the gene pool improves and endures even as individuals die.
The author provides formal definitions of fragile and antifragile in terms of non-linear responses to volatility. Fragile systems are harmed more by large changes than small changes. Antifragile systems gain more from changes than they lose. Consider how one stock, a diversified portfolio of stocks, and a stock broker are affected by volatility in the Dow Jones industrial average. A single stock can have a large change in value, much greater than the change in the index, even over a short time frame. A diversified portfolio will be less volatile, with changes similar to the volatility of the index. A stock broker makes money on every sale whether the stock is going up or down. The single stock is fragile, the portfolio robust, and the stock broker is antifragile. This idea leads to the chief ethical rule: “Thou shalt not have antifragility at the expense of the fragility of others”
Taleb cautions us to beware of people who make predictions without having any skin in the game, agents that gain from risks they advise you take, captains that are absent when the ship goes down, executives who enjoy incentives without disincentives, organizations that are too big to fail, complex regulations, noise interpreted as signal, procedures to treat minor medical conditions that expose you to large risks, iatrogenics, wrong beliefs, shifting the burden of evidence, and novelty.
Become stronger by exposing yourself to the acute stresses of natural exercise, routine failures, and everyday grime. Learn from everyday encounters with randomness and risk. Do more and talk less. Invest like a venture capitalist. Seek (free) options that can have large payoffs. Evaluate payoffs rather than truth. Advance via negativa.
The book relies on many quirky or unusual terms, collected into a glossary, including: Fragilista, lecturing birds how to fly, barbell strategy, Ludic fallacy, hormesis, naïve interventionism, turkey illusion, agency problem, the green lumber fallacy, via negativa, and the Lindy effect.
Perhaps someday these ideas will be presented in a well-written book that is half as long and twice as clear.
Taleb's concept of anti-fragility (or convexity) is simple, yet not easily grasped thanks to our default Western way of thinking about things. Taleb's willingness to engage with his critics in his characteristically lively manner makes an otherwise unfortunate (and serious) matter as enjoyable as it can be empowering (or depressing, as you care to look at it).
Not simply worth the read -- this should be mandatory.
The good news is that there is some organization this time. After an introductory section he applies his big idea to six different areas of application, in six sections. You can read one to see if you find his idea of use.
In The Black Swan, Taleb explained the existence of high impact rare events beyond the realms of normal expectations. In his new book, Taleb goes much further. He tells us how to live in a world that is unpredictable and chaotic, and how to thrive during moments of disaster. Antifragility is about loving randomness, uncertainty, opacity, adventure and disorder, and benefitting from a variety of shocks. It is a new word because it is a new concept. Many of the greatest breakthroughs in human endeavour come from the trial and error that is part of antifragility. And some of the best systems we know of, including evolution, have antifragility at their heart. Medicine, economics, even politics, could all be improved by embracing it. It is often what really drives innovation and invention. Our failure to realize this has even led to many huge historical misunderstandings about religion and belief. So, how can we take advantage of antifragility? Taleb ranges over ideas and real-life situations, from why debt brings fragility, why if we lose nothing we will gain nothing, and why we should detest the lack of accountability at the heart of capitalism. He shows us that chaos is what makes us human. (source: Bol.com)
This is not a fitness guide.
This is not a diet guide.
This is not a screed against the dismal science.
This is not a call for fundamental economic and political change.
This is not an autobiography.
This is, as Taleb himself has called it, a work of philosophy which touches on all of the above. I'd also call it a field guide to understanding important parts of the natural and social worlds. It finds much inspiration in the ancient texts of the Mediterranean. Taleb says "moderns have severe handicaps when it comes to wisdom".
We rely, he argues, too much on the illusion of knowledge, too much on false precision, ignorantly intervene, centralize our decisions, try futilely to avoid random risk. Taleb practices "naturalistic risk management" - ways of minimizing bad risk and benefiting from the "Extended Disorder Family": uncertainty, variability, imperfect knowledge, chaos, volatility, time, the unknown, randomness, error, and stressors". Weak things are hurt by disorder; robust things are unchanged, and, as the title indicates, Taleb's coinage "antifragile" designates those things benefitting from disorder.
Taleb's book has whole charts placing everything from types of literature to ways of thinking to stress to economic systems to medicine to errors into the appropriate column of this Central Triad of reaction to disorder. He may be, as he says, given to "angry, dismissive, and irascible" prose, but there is a missionary zeal behind this work. Before thanking the reader at the conclusion for reading the book, he embraces disorder as not only potentially life altering in a good way but the key to life's zest, accomplishment, and ethics. Taleb, as he often notes, has plenty of "F*** you" money by applying his ideas successfully in the world of finance, so money is not the primary motive for this book. He so wants you to be exposed to these ideas that he uses a barrage of ideas to get his points home. There is an opening laying out important concepts of the book and providing a roadmap to the rest of the book. There is a glossary. There is a bibliography. There's a ten page appendix graphically summarizing the book. There is a highly technical appendix with mathematical arguments. Taleb promises a free e-book with the most elaborate supporting technical documents and arguments. There are quotes from Roman and Greek and Arab classics. There are historical anecdotes. There are personal anecdotes - usually negatively reflecting on famous economists - from Taleb's life. There are the dialogues between Nero, a fictionalized version of Taleb, and Fat Tony. The latter is the opposite of Taleb, unintellectual and inarticulate but illustrative of Taleb's caution that unintelligible in not unintelligent and many facts are irrelevant in successfully making money off suckers - the speciality of Nero and Fat Tony.
Taleb on investment: a barbell strategy of investing mostly in safe options with ten percent in highly risky - but potentially highly profitable - stock.
Taleb on fitness: your body probably doesn't benefit most from regular, low-grade exercise but, rather, from random, high output, high stress exercise. He talks about his own experience in bulking up after a bodyguard (hired after Taleb's public and successful predictions of 2008's financial crisis resulted in death threats) introduced him to the idea of simply trying short workouts where he just tries to best his personal record of weight lifted.
Taleb on health: your body probably doesn't like regular feeding or eating things your ancestors didn't eat. It needs the stress of deprivation occasionally.
Taleb on economics: intervention by the "Soviet-Harvard" school of economists causes a great deal of havoc. There is a tyranny of talkers who never pay the price for their bad advice - unlike the old days when bankers in charge of failed institutions were executed.
Taleb on social and political change: we need to force politicians and leaders to put "skin in the game" whether it's making war or running a company. The "principal-agent problem" was solved in the old tradition of the captain going down with his ship, the Roman engineer being forced to camp out under the bridge he built. The modern economic elite too often socialize loses and privatize profits. Limited-liability corporations should be curtailed, corporate officers' personal assets be placed at risk in certain circumstances. Globalization is economic efficiency, but efficiency is the enemy of reliability. We rely too much on the false precision of models. Massive 19th Century building projects were often completed much closer to schedule than modern ones because there was not the illusion of proper planning facilitated by computers crunching metrics.
I don't take Taleb as an absolute guru. I disagree with him somewhat on the harm stemming from large corporations though I would certainly support the notion that, in effect, "too big to fail" is too big to be allowed to exist. On a more minor level, I don't agree with his opinions on science fiction's lack of literary worth -- which partly stems from Taleb's justified suspicion of "neomania" - or his hostility to private gun ownership in America. But I do think this and his [[ASIN:081297381X The Black Swan: Second Edition: The Impact of the Highly Improbable: With a new section: "On Robustness and Fragility"]]are important reminders of our systematic mental fallibilities and the inescapable role of randomness in the world. And there is a welcome humanity - as well as a modified application of the stoicism of Senca to the modern world - in Taleb's efforts to acknowledge, accept, and use the chaos around us.
In short, I do consider this a modern work of wisdom.
The key to antifragile systems, according to Taleb, is convexity. Convex functions are asymmetric in that they limit the downsides but keep open the upsides, so that with high volatility the system can actually reap high rewards and benefit from variability. Convex systems thrive in Extremistan Concave functions are the opposite, they can thrive in Mediocristan, but will blow up in Extremistan where black swans come along and negate any and all gains previously accrued. Concavity is not sustainable, convexity is. The exemplar of convexity is optionality. Taleb uses an anecdote about the pre-socratic philosopher Thales as an example of optionality. Thales leased olive presses using an option contract, so that he has the right, but not the obligation, to use them. If the season is bountiful, he will use his right and profit, if the season turns out to be bad, he has the option to not lease the presses and avoid incurring any losses. Optionality turns a win-lose situation into a win-break even situation, if things work out you win, if they don't you break even or suffer minimal inconvenience. The downside is limited, the upside is unlimited. This is the essence of antifragility.
Taleb describes many other concepts that are synergistic with antifragility in order to derive heuristics to abide by. The Lindy effect gives us a heuristic to expect that older technologies and ideas will last longer than newer ones (on average). Iatrogenics gives us a heuristic to first do no harm by removing harmful things from systems instead of adding on supposedly beneficial things to them. The green lumber fallacy gives us a heuristic to do what works based on cost/benefit analysis in practice without erroneously theorizing why they work and coming up with postdictive fantasies. The heuristic 'small is beautiful' gives us a bias for smaller and more decentralized systems compared with the fragility of bigger and more centralized ones. Finally, the 'skin in the game' heuristic gives a solution to the agency problem by making sure those that take risks that can harm others are personally liable when things go wrong. Taleb uses examples from many domains and colorful anecdotes throughout history to defend these heuristics and get these points across.
I think the overall message of the book is incredibly important and insightful, but my biggest criticism of Taleb is his extreme discounting of the possibility to actually understand complex systems. I agree that there is an aspect of irreducible uncertainty to such systems that cannot be overcome, but there are still ways to use our advancing knowledge of complex-adaptive systems to turn black swans into gray swans (to use Taleb's own idea from his book The Black Swan). I understand that Taleb's main concern is for things to not blow up and for people to first just do things that work in practice, but he is too conservative and skeptical with his epistemological approach. Maybe it is just hyperbolic rhetoric to hammer in his ideas that would otherwise not get the attention they deserve, which is fine, but I'd prefer a middle ground where Taleb's ideas can inform and improve our scientific processes, preserving our ability to create theoretical models of the world instead of abandoning it outright.
Nassim Taleb is polarizing, his ideas doubly so, but I find myself on his side more often than not and recommend this book highly.
Or is it?
I started off pretty well, somehow managing to get my brain around the whole idea of antifragile, a word the author, Nassim Nicholas Taleb, admits he made up. There is no real word in English that properly names this idea. Everyone understands the idea of fragile, something that is destroyed when stressed. But the opposite of fragile is more than just something that survives difficulties. Antifragility, Taleb tells us, is the idea of a phenomenon that goes beyond mere resilience; antifragility is the idea of something that actually improves with difficulties and uncertainty.
Taleb gives us lots of great examples of things that are antifragile: "...evolution, culture, ideas, revolutions, political systems, technological innovation, cultural and economic success, corporate survival, good recipes (say, chicken soup or steak tartare with a drop of cognac), the rise of cities, cultures, legal systems, equatorial forests, bacterial resistance...even our own existence as a species on this planet."
I'm high-five-ing him, right and left...love this idea of antifragile, Taleb.
That was the Prologue, however. Round about the second or third page of Chapter 1, I find that I'm reading along, with no idea what Mr. Taleb is explaining. He tries, he really does, and now and then I read a paragraph and think I'm back on the highway. The Soviet-Harvard Department of Ornithology, for example. (How well do I know that department, the people who lecture to birds about proper techniques for flying, observe and write reports about the birds' flying abilities, and then seek funding to ensure that the lectures will continue!) But, soon I'm back driving in the dark again.
I don't know if I really read this book. Can I add it to my 2013 Book Log? Does it count? Please don't ask me to summarize it or outline it or (heaven forbid!) don't test me on it.
But if I didn't really read it, why did I like it so much? And why can't I stop thinking about it?
Maybe what I did when I read Antifragile was antireading. Maybe antireading is the kind of reading where you turn the pages and read the words, but understand only a smidgen of what's there, and then you think about it for weeks, and come back to the book again and again, and maybe try to reread it, and it tweaks your map about this life, even through you really didn't understand much of what you read to begin with.
Maybe antireading is the best kind of reading of all.
So conventional thinking, government bailouts, and anyone without a stake in the outcome will not help one consider the black swan events that can threaten survival. Besides the philosopher references, Mr. Taleb uses a street-smart contemporary called Fat Tony to explore volatility management in a variety of disciplines. Despite a few diversionary flights (for some of us, e-books and physical books can co-exist without threatening the grand order of things) the book offers interesting insight about risk management that is very pertinent today.
There are books that you might read just for pleasure, an easy escape into some world unlike your own that doesn't require much of you in the reading except that you sit back, relax and enjoy the ride.
This is not that kind of book.
This book grabbed me from nearly the very first page and never let me go. It requires a lot of engagement from the reader, a lot of thought and, at least in my case, a good dictionary close at hand. That said in my humble opinion it is well worth the effort. Taleb's premise makes so much sense and his examples are so compelling I kept going and going. In 400+ pages now I can safely say that instances where a page has been left without underlined passages or margin notes are few and far between. There is so much here that I cannot imagine anyone who reads it not finding something to be offended by, marvel at, agree with and be challenged by. It is that kind of book and Taleb is that kind of writer.
This is how good this book is. I won the copy I read from the LibraryThing Early Reviewer Program. Before I was done I had bought a hardcover copy for myself. I will probably buy another copy for everyone on my Christmas list. They may not read it but it won't be due to not having the opportunity.
I can relat to some of this. Many years ago, was trying to figure out social and economic factors that has led to some precipitous declines in public transit ridership since World War II. When I compared data from the 1970 census on means of transportation to work to that of the 1960 census, only one metropolitan area in the U.S. had an incrase in the proportion of people using public transportation. That was Las Vegas, which had grown into a real city in the intervening ten years, and it became truly meaningful to ride buses up and down the Strip.
I began to realize that non-linearity was present in my data, and that catastrophe (think, Rene Thom) also contributed. I did not have computers of any consequence in the mid-1970's when I was thinking about these kinds of things. But now we have people like Nassim Taleb who is trying to push us into a different way of thinking about disorder and risk.
Taleb puts many stories into his book, so it is not at all dry. Sometimes, in his attempt to be far-reaching, some concepts get a little lost. My review did not have an index, and I found I wanted to flip around the book in some kind of organized randomness to follow some of Taleb's thoughts. I then waited until I could check out another copy of this book from my local library, so I could get a fuller appreciation of "Antifragile".
Taleb has a chapter named, The Cat and the Washing Machine. His point is that many presumably man-made activities, they began to act more like cats, than washing machines. Tha is, they take on a life of their own. We had a cat that would make surprise jumps into the dryer or washing machine, so I was wishing he played out more with this metaphor. I was hoping that the index might give me a pointer to further information before I got there by a linear reading of the book. But cats and washing machines are not mentioned in the index. And I had to think of what Taleb is doing: building an argument, not by deduction, and by his sloppier but more poignant inductive method.
So, you can read "at" this book, and get benefits from it.
This book follows in the footsteps of his best known work “The Black Swan” in which he points out that unexpected things happen. Just because most swans are white doesn't mean some can't be black. Hurricane Florence, the 9-11 attacks and the 1929 stock market crash are examples of black swans. If “The Black Swan” was short on practical advice, “Antifragile” is loaded with it, covering what we should eat, when we should seek medical care, what we should read, how we should get an education and how we should make our living, among other topics.
Taleb has little use for economists, big business, college professors and other intellectuals, politicians, doctors and virtually anyone who claims to be only trying to help. "This is the tragedy of modernity: as with neurotically overprotective parents, those trying to help are often hurting us the most," he says. Thus he ignores modern advice, except to ridicule it, and consults the wisdom of the past, such as Seneca, Cato the Elder and the Bible. That such writings still exist and remain helpful proves to Taleb that they are antifragile.
One finds wisdom here too, but also a bit of hypocrisy. After all Taleb, like those he criticizes, is only trying to help.
Apart from the reasonable observation that "antifragility" is a property that some systems have, and it deserves a name, Taleb's ideas are not really unexpected or revolutionary. It's not hard to think of plenty of examples of antifragile systems (e.g. weight-lifting can make you stronger over time, evolution will better-optimize a species for a changing environment if that species experiences small environmental changes periodically, the Star Trek Borg adapt to attacks used against them, etc.). The implications of antifragility that Taleb discusses seem reasonably obvious, at least as far as I got in the book.
I admit that I didn't finish the book. Taleb's writing style turned me off. Taleb comes across as immature and pompous, spending far too many words attacking academics (and other groups he despises) with childish insults that do more to undermine Taleb's own credibility than that of the groups he attacks. Aside from making Taleb seem like an schoolyard bully, these insults slow down the book and dilute Taleb's presentation of his ideas.
If you are interested in reading a book about antifragile systems that provides wonderful insight, I recommend "The Origin of Wealth" by Eric Beinhocker, an examination of evolution as a substrate-independent algorithm for improving and optimizing systems to external conditions. Beinhocker's thinking is more sophisticated that that of Taleb, and Beinhocker's presentation is both clearer and more pleasant to read.