HOME  |   ENGINEERING  |   RESEARCH  |   CONTACT
Antifragile: Things that Gain from Disorder

NASSIM TALEB
2012

Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better.

Prologue
  • The antifragile loves randomness and uncertainty, which also means—crucially—a love of errors, a certain class of errors. Antifragility has a singular property of allowing us to deal with the unknown, to do things without understanding them—and do them well.
  • We are largely better at doing than we are at thinking, thanks to antifragility.
  • The Black Swan problem: the impossibility of calculating the risks of consequential rare events and predicting their occurrence.
  • 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. If antifragility is the property of all those natural (and complex) systems that have survived, depriving these systems of volatility, randomness, and stressors will harm them.
  • The tragedy of modernity: as with neurotically overprotective parents, those trying to help are often hurting us the most.
  • If about everything top-down fragilizes and blocks antifragility and growth, everything bottom-up thrives under the right amount of stress and disorder.
  • Some become antifragile at the expense of others by getting the upside (or gains) from volatility, variations, and disorder and exposing others to the downside risks of losses or harm.
  • The chief ethical rule is the following: Thou shalt not have antifragility at the expense of the fragility of others.
  • Black Swans are large-scale unpredictable and irregular events of massive consequence—unpredicted. Black Swans hijack our brains, making us feel we “sort of” or “almost” predicted them, because they are retrospectively explainable. Life is more, a lot more, labyrinthine than shown in our memory—our minds are in the business of turning history into something smooth and linear, which makes us underestimate randomness.
  • The modern world may be increasing in technological knowledge, but, paradoxically, it is making things a lot more unpredictable. We are victims to a new disease, called in this book neomania, that makes us build Black Swan–vulnerable systems—“progress.” The rarer the event, the less tractable, and the less we know about how frequent its occurrence.
  • Antifragility is not just the antidote to the Black Swan; understanding it makes us less intellectually fearful in accepting the role of these events as necessary for history, technology, knowledge, everything.
  • Consider that Mother Nature is not just “safe.” It is aggressive in destroying and replacing, in selecting and reshuffling.
  • The antifragile gains from prediction errors, in the long run. If you follow this idea to its conclusion, then many things that gain from randomness should be dominating the world today—and things that are hurt by it should be gone. Well, this turns out to be the case.
  • Fragility is quite measurable, risk not so at all, particularly risk associated with rare events.
  • We have been unconsciously exploiting antifragility in practical life and, consciously, rejecting it—particularly in intellectual life.
  • The Fragilista belongs to that category of persons who falls for the overestimation of the reach of scientific knowledge. Because of such delusion, he is what is called a naive rationalist, a rationalizer, or sometimes just a rationalist, in the sense that he believes that the reasons behind things are automatically accessible to him. The fragilista (medical, economic, social planning) is one who makes you engage in policies and actions, all artificial, in which the benefits are small and visible, and the side effects potentially severe and invisible.
  • Heuristics are simplified rules of thumb that make things simple and easy to implement. But their main advantage is that the user knows that they are not perfect, just expedient, and is therefore less fooled by their powers. They become dangerous when we forget that.
  • Modernity has replaced ethics with legalese, and the law can be gamed with a good lawyer.
  • First ethical rule: If you see fraud and do not say fraud, you are a fraud.
  • The Triad: Fragile, Robust, and Antifragile. The fragile wants tranquility, the antifragile grows from disorder, and the robust doesn’t care too much. In the fragile category, the mistakes are rare and large when they occur, hence irreversible; With the antifragile the mistakes are small and benign, even reversible and quickly overcome.
The Antifragile: An Introduction
  • Hormesis: when a small dose of a harmful substance is actually beneficial for the organism, acting as medicine. All hormesis seems to be doing is reestablishing the natural dosage for food and hunger in humans. In other words, hormesis is the norm, and its absence is what hurts us. Depriving systems of stressors, vital stressors, is not necessarily a good thing.
  • Post-traumatic growth is the opposite of post-traumatic stress syndrome, by which people harmed by past events surpass themselves. The excess energy released from overreaction to setbacks is what innovates! Undercompensation from the absence of a stressor, inverse hormesis, absence of challenge, degrades the best of the best.
  • Layers of redundancy are the central risk management property of natural systems. Risk management professionals look in the past for information on the so-called worst-case scenario and use it to estimate future risks—this method is called “stress testing.” They never notice the following inconsistency: this so-called worst-case event, when it happened, exceeded the worst case at the time. This mental defect is called the Lucretius Problem: The fool believes that the tallest mountain in the world will be equal to the tallest one he has observed.
  • Information is antifragile; it feeds more on attempts to harm it than it does on efforts to promote it.
  • In the complex world, the notion of “cause” itself is suspect; it is either nearly impossible to detect or not really defined. The crux of complex systems, those with interacting parts, is that they convey information to these component parts through stressors.
  • Causal Opacity: it is hard to see the arrow from cause to consequence, making much of conventional methods of analysis, in addition to standard logic, inapplicable.
  • Humans tend to do better with acute than with chronic stressors, particularly when the former are followed by ample time for recovery, which allows the stressors to do their jobs as messengers. Machines: use it and lose it; organisms: use it or lose it.
  • The antifragility of some comes necessarily at the expense of the fragility of others. In a system, the sacrifices of some units—fragile units, that is, or people—are often necessary for the well-being of other units or the whole.
  • The most interesting aspect of evolution is that it only works because of its antifragility; 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. Nature prefers to let the game continue at the informational level, the genetic code. So organisms need to die for nature to be antifragile.
  • With evolution, something hierarchically superior to that organism benefits from the damage. From the outside, it looks like there is hormesis, but from the inside, there are winners and losers. The natural was built from nonsystemic mistake to nonsystemic mistake. Antifragility in biology works thanks to layers. This rivalry between suborganisms contributes to evolution. 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.
  • The antifragility of the higher level may require the fragility—and sacrifice—of the lower one.
  • Nietzsche’s famous expression “what does not kill me makes me stronger” can be easily misinterpreted as meaning Mithridatization or hormesis. But it could as well mean: what did not kill me did not make me stronger, but spared me because I am stronger than others; but it killed others and the average population is now stronger because the weak are gone.
  • Nature wants herself, the aggregate, to survive—not every species.
Modernity and the Denial of Antifragility
  • Man-made smoothing of randomness produces smooth, steady, but fragile. Vulnerable to large shocks that can make it go to zero.
  • The centralized state resembles the income of a banker. The city-state model that of a taxi driver. One has a large employer, the other many small ones—so he can select the ones that fit him the best and hence has, at any point in time, “more options.” One has the illusion of stability, but is fragile; the other one the illusion of variability, but is robust and even antifragile. The risk properties (of the fragile bank employee) are vastly different from those of the second one (the comparatively antifragile artisan taxi driver).
  • A little bit of agitation gives resources to souls and what makes the species prosper isn’t peace, but freedom.
  • Light control works; close control leads to overreaction. Variations also act as purges. Small forest fires periodically cleanse the system of the most flammable material, so this does not have the opportunity to accumulate. Systematically preventing forest fires from taking place “to be safe” makes the big one much worse. When some systems are stuck in a dangerous impasse, randomness and only randomness can unlock them and set them free.
  • Stochastic Resonance: add random noise to the background makes you hear the sounds (say, music) with more accuracy.
  • The method of annealing in metallurgy is a technique used to make metal stronger and more homogeneous. It involves the heating and controlled cooling of a material, to increase the size of the crystals and reduce their defects. The heat causes the atoms to become unstuck from their initial positions and wander randomly through states of higher energy; the cooling gives them more chances of finding new, better configurations.
  • The ancients evolved hidden and sophisticated ways and tricks to exploit randomness.
  • in the past, when we were not fully aware of antifragility and self-organization and spontaneous healing, we managed to respect these properties by constructing beliefs that served the purpose of managing and surviving uncertainty.
  • Iatrogenics means literally “caused by the healer,” or causing harm while trying to help. Until penicillin, medicine had a largely negative balance sheet—going to the doctor increased your chance of death.
  • Theories are superfragile; they come and go. Phenomenologies stay, is “robust” and usable. Theories are overhyped, and are unreliable for decision making — outside physics. Physics is privileged; it is the exception.
  • The argument is not against the notion of intervention; It is against naive intervention and lack of awareness and acceptance of harm done by it.
  • Experiments show that alertness is weakened when one relinquishes control to the system. Motorists need the stressors and tension coming from the feeling of danger to feed their attention and risk controls, rather than some external regulator.
  • We humans are very bad at filtering information, particularly short-term information, and procrastination can be a way for us to filter better, to resist the consequences of jumping on information.
  • Time is the best test of fragility—it encompasses high doses of disorder—and nature is the only system that has been stamped “robust” by time.
  • In medicine, we are discovering the healing powers of fasting, as the avoidance of the hormonal rushes that come with the ingestion of food.
A Nonpredictive View of the World
  • The dual strategy of mixing high risks and highly conservative actions is preferable to just a simple medium-risk approach to things.
  • The traditional understanding of Stoicism in the literature is of some indifference to fate—among other ideas of harmony with the cosmos. It is about continuously degrading the value of earthly possessions. Stoicism makes you desire the challenge of a calamity. And Stoics look down on luxury: Seneca’s version of that Stoicism is antifragility from fate. No downside from Lady Fortuna, plenty of upside.
  • By mentally writing off belongings so one does not feel any pain from losses. The volatility of the world no longer affects you negatively. Stoicism is about the domestication, not necessarily the elimination, of emotions.
  • The modern Stoic sage is someone who transforms fear into prudence, pain into information, mistakes into initiation, and desire into undertaking.
  • Invest in good actions. Things can be taken away from us—not good deeds and acts of virtue. If you have more to lose than to benefit from events of fate, there is an asymmetry, and not a good one. Fragility implies more to lose than to gain, equals more downside than upside, equals (unfavorable) asymmetry. Antifragility implies more to gain than to lose, equals more upside than downside, equals (favorable) asymmetry.
  • All solutions to uncertainty are in the form of barbells. The idea of a combination of extremes kept separate, with avoidance of the middle. One can also call it, more technically, a bimodal strategy, as it has two distinct modes rather than a single, central one.
  • Antifragility is the combination aggressiveness plus paranoia.
Optionality, Technology, and the Intelligence of Antifragility
  • The Teleological Fallacy: the illusion that you know exactly 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.
  • Optionality will take us many places, but at the core, an option is what makes you antifragile and allows you to benefit from the positive side of uncertainty, without a corresponding serious harm from the negative side.
  • Intelligence makes you discount antifragility and ignore the power of optionality. The edge from optionality is in the larger payoff when you are right, which makes it unnecessary to be right too often.
  • Growth in society may not come from raising the average but from increasing the number of people in the “tails,” that small, very small number of risk takers crazy enough to have ideas of their own, those endowed with that very rare ability called imagination, that rarer quality called courage, and who make things happen.
  • If you “have optionality,” you don’t have much need for what is commonly called intelligence, knowledge, insight, skills. All you need is the wisdom to not do unintelligent things to hurt yourself and recognize favorable outcomes when they occur.
  • Evolution can produce astonishingly sophisticated objects without intelligence, simply thanks to a combination of optionality and some type of a selection filter, plus some randomness.
  • Two types of knowledge:
    • Apophatic: The first is a way of doing things that we cannot really express in clear and direct language. We do and do well.
    • The second type acquire in school, can codify, what is explainable.
  • The error of naive rationalism leads to overestimating the role and necessity of the second type, academic knowledge, in human affairs—and degrading the uncodifiable, more complex, intuitive, or experience-based type.
  • In an Epiphenomenon, you don’t usually observe A without observing B with it, so you are likely to think that A causes B, or that B causes A.
  • Less is more in action: the more studies, the less obvious elementary but fundamental things become; activity, on the other hand, strips things to their simplest possible model.
  • Theory should stay independent from practice and vice versa.
  • The difference between a narrative and practice—the important things that cannot be easily narrated—lies mainly in optionality, the missed optionality of things. The “right thing” here is typically an antifragile payoff. And my argument is that you don’t go to school to learn optionality, but the reverse: to become blind to it.
  • Prometheus means “fore-thinker” while Epimetheus means “after-thinker,” equivalent to someone who falls for the retrospective distortion of fitting theories to past events in an ex post narrative manner.
  • Optionality is Promethean, narratives are Epimethean.
  • In theory there is no difference between theory and practice; in practice there is. Things that are implemented tend to want to be born from practice, not theory.
  • Knowledge formation, even when theoretical, takes time, some boredom, and the freedom that comes from having another occupation, therefore allowing one to escape the journalistic-style pressure of modern publish-and-perish academia to produce cosmetic knowledge.
  • When engaging in tinkering, you incur a lot of small losses, then once in a while you find something rather significant. In the antifragile case (of positive asymmetries, positive Black Swan businesses), such as trial and error, the sample track record will tend to underestimate the long-term average; it will hide the qualities, not the defects. In the fragile case of negative asymmetries (turkey problems), the sample track record will tend to underestimate the long-term average; it will hide the defects and display the qualities.
  • Traditions provide an aggregation of filtered collective knowledge.
  • The payoff, what happens to you (the benefits or harm from it), is always the most important thing, not the event itself.
  • Philosophers talk about truth and falsehood. People in life talk about payoff, exposure, and consequences (risks and rewards), hence fragility and antifragility. And sometimes philosophers and thinkers and those who study conflate Truth with risks and rewards.
Book V
  • For the fragile, shocks bring higher harm as their intensity increases (up to a certain level). Asymmetry is necessarily nonlinearity. More harm than benefits: simply, an increase in intensity brings more harm than a corresponding decrease offers benefits. 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 (equivalently, less harm) as their intensity increases (up to a point).
  • The more Concave an exposure, the more harm from the unexpected, and disproportionately so - concavity.
  • The effect of variability in food sources and the nonlinearity in the physiological response is central to biological systems.
  • The Hubris Hypothesis: irrational for companies to engage in mergers given their poor historical record. There appears to be something about size that is harmful to corporations. Squeezes are much, much more expensive (relative to size) for large corporations. The gains from size are visible but the risks are hidden, and some concealed risks seem to bring frailties into the companies - the costs of a squeeze. Smooth functioning at regular times is different from the rough functioning at times of stress.
  • The interpretation in the past was that projects take longer than planned because the estimates are too optimistic. Decision scientists and business psychologists have theorized something called the

    Planning Fallacy. Black Swan effects are necessarily increasing, as a result of complexity, interdependence between parts, globalization, and the beastly thing called “efficiency” that makes people now sail too close to the wind.

  • The Idea of Positive and Negative Model Error: neutral errors affect you both ways. There is no one-sidedness to them, so these errors can be kept under control thanks to size limits. But that is not the case with most things we build, and with errors related to things that are fragile, in the presence of negative convexity effects. These class of errors have one-way outcomes, that is, negative.
  • Consider a small change in the assumptions: look at how large the effect and if there is acceleration of such effect.
  • The notion of average is of no significance when one is fragile to variations. The dispersion in possible outcomes matters. Let us call that second piece of information the second-order effect, or, more precisely, the convexity effect.
  • The hidden benefit of antifragility is that you can guess worse than random and still end up outperforming. Here lies the power of optionality—your function of something is very convex, so you can be wrong and still do fine—the more uncertainty, the better.
Book VI
  • Apophatic: focuses on what cannot be said directly in words, from the Greek apophasis (saying no, or mentioning without mentioning). An avoidance of direct description, leading to a focus on negative description, what is called in Latin via negativa.
  • The less-is-more idea in decision making: that simpler methods for forecasting and inference can work much, much better than complicated ones.
  • The eighty/twenty idea, based on the discovery that 20 percent owned 80 percent. These effects are very general. Few realize that we are moving into the far more uneven distribution of 99/1 across many things that used to be 80/20: Almost everything contemporary has winner-take-all effects, which includes sources of harm and benefits. 1 percent modification of systems can lower fragility (or increase antifragility) by about 99 percent.
  • The less-is-more idea as an aid in decision making: if you have more than one reason to do something just don’t do it. By invoking more than one reason you are trying to convince yourself to do something.
  • From the track record of the 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. The most fragile is the predictive.
  • Pre-rich and post-rich technology people and the new category of technology intellectuals. They have an additive approach to the future (failure to subtract the fragile rather than add to destiny), there is a profound lack of elegance. Technothinkers tend to have an “engineering mind”, a lack of charm, an interest in objects instead of persons, causing them to neglect their looks. They love precision at the expense of applicability. And they typically share an absence of literary culture.
  • An absence of literary culture is actually a marker of future blindness because it is usually accompanied by a denigration of history. To understand the future, you just need some respect for the past, some curiosity about the historical record, a hunger for the wisdom of the elders, and a grasp of the notion of “heuristics,” these often unwritten rules of thumb that are so determining of survival. You will be forced to give weight to things that have been around, things that have survived.
  • Technology can cancel the effect of bad technologies, by self-subtraction. Technology is at its best when it is invisible. It may be a natural property of technology to only want to be displaced by itself.
  • The nonperishable is anything that does not have an organic unavoidable expiration date. The perishable is typically an object, the nonperishable has an informational nature to it.
  • Lindy Effect: the old is expected to stay longer than the young in proportion to their age. For the perishable, every additional day in its life translates into a shorter additional life expectancy. For the nonperishable, every additional day may imply a longer life expectancy. 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.
  • Another mental bias causing the overhyping of technology comes from the fact that we notice change, not statics. Impulses to buy new things that will eventually lose their novelty, particularly when compared to newer things, are called Treadmill Effects. We notice differences and become dissatisfied with some items and some classes of goods. Articles made by an artisan cause fewer treadmill effects. And they tend to have some antifragility.
  • Top-down is usually irreversible, so mistakes tend to stick, whereas bottom-up is gradual and incremental, with creation and destruction along the way, though presumably with a positive slope. Further, things that grow in a natural way, have a fractal quality to them. Like everything alive, all organisms, like lungs, or trees, grow in some form of self-guided but tame randomness. Fractal entails both jaggedness and a form of self-similarity in things. Fractals induce a certain wealth of detail based on a small number of rules of repetition of nested patterns.
  • If something that makes no sense to you (religion or some age-old habit or practice called irrational); if that something has been around for a very, very long time, then, irrational or not, you can expect it to stick around much longer, and outlive those who call for its demise.
  • The non-natural needs to prove its benefits, not the natural. According to the statistical principle, nature is to be considered much less of a sucker than humans. In a complex domain, only time—a long time—is evidence.
  • Mistaking absence of evidence for evidence of absence tends to affect smart and educated people, as if education made people more confirmatory in their responses and more liable to fall into simple logical errors.
  • The first principle of iatrogenics is as follows: we do not need evidence of harm to claim that a drug or an unnatural via positiva procedure is dangerous. Second principle of iatrogenics: it is not linear. We should not take risks with near-healthy people; but we should take a lot, a lot more risks with those deemed in danger.
  • What Mother Nature does is rigorous until proven otherwise; what humans and science do is flawed until proven otherwise.
  • An attribution problem arises when the person imputes his positive results to his own skills and his failures to luck.
  • Another fooled-by-randomness-style mistake is to think that because life expectancy at birth used to be thirty until the last century, the bulk of the deaths coming from birth and childhood mortality. Conditional life expectancy was high. Perhaps legal enforcement contributed more than doctors to the increase in length of life. Gains in life expectancy are more societal than from the result of scientific advance.
  • When we are herbivores, we eat steadily; but when we are predators we eat more randomly. Hence our proteins need to be consumed randomly for statistical reasons.
  • Starvation causes the expression of a gene coding a protein which brings longevity and other effects. What ritual fasts do is try to bring nonlinearities in consumption to match biological properties.
  • Walking effortlessly, at a pace below the stress level, can have some benefits.
Book VII
  • Under opacity and in the newfound complexity of the world, people can hide risks and hurt others, with the law incapable of catching them. Under such epistemic limitations, skin in the game is the only true mitigator of fragility.
  • In older societies, the main difference between us and them is the disappearance of a sense of heroism; a shift away from a certain respect—and power—to those who take downside risks for others. Heroism is the exact inverse of the agency problem: power seems to go to those who steal a free option from society.
  • Another Triad: there are those with no skin in the game but who benefit from others, those who neither benefit from nor harm others, and, finally, the grand category of those sacrificial ones who take the harm for the sake of others.
  • If you don’t take risks, there is nothing you can do that makes you grand, nothing.
  • Two heuristics: every opinion maker needs to have “skin in the game” in the event of harm caused by reliance on his information or opinion. Further, anyone producing a forecast or making an economic analysis needs to have something to lose from it, given that others rely on those forecasts. The second heuristic is that we need to build redundancy, a margin of safety, avoiding optimization, mitigating (even removing) asymmetries in our sensitivity to risk.
  • The information age with its transferring of fragility is much more acute now, under modernity’s connectivity, and the newfound invisibility of causal chains. The intellectual today is vastly more powerful and dangerous than before. The “knowledge world” causes separation of knowing and doing (within the same person) and leads to the fragility of society. In traditional societies even those who fail—but have taken risks—have a higher status than those who are not exposed.
  • The asymmetry (antifragility of postdictors): postdictors can cherry-pick and produce instances in which their opinions played out and discard mispredictions into the bowels of history. It is like a free option—to them; we pay for it. Volatility tends to benefit them: the more volatility, the higher the illusion of intelligence.
  • Anything one needs to market heavily is necessarily either an inferior product or an evil one. By definition, what is being marketed is necessarily inferior, otherwise it would not be advertised. Marketing is bad manners. Marketing beyond conveying information is insecurity.
  • Only a sense of honor can lead to commerce.
  • Free person: someone who cannot be squeezed into doing something he would otherwise never do.
  • One should give more weight to witnesses and opinions when they present the opposite of a conflict of interest.
  • The Tragedy of Big Data. The more variables, the more correlations that can show significance in the hands of a “skilled” researcher. Falsity grows faster than information; it is nonlinear (convex) with respect to data. Increasingly, data can only truly deliver via negativa–style knowledge—it can be effectively used to debunk, not confirm.
  • Education, in the sense of the formation of character, personality, and acquisition of true knowledge, likes disorder.
  • Innovation is precisely something that gains from uncertainty.
  • The best way to verify that you are alive is by checking if you like variations.
  • An ethical life isn’t so when stripped of personal risks.

These notes were taken from Nassim's book. For more info visit his website at www.fooledbyrandomness.com


© 2020 Cedric Joyce