Antifragile: Things That Gain from Disorder

by Taleb, Nassim Nicholas

  WHAT DOES NOT KILL ME KILLS OTHERS

  Time to debunk a myth.

  As an advocate of antifragility I need to warn about the illusion of seeing it when it is not really there. We can mistake the antifragility of the system for that of the individual, when in fact it takes place at the expense of the individual (the difference between hormesis and selection).

  Nietzsche’s famous expression “what does not kill me makes me stronger” can be easily misinterpreted as meaning Mithridatization or hormesis. It may be one of these two phenomena, very possible, 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.” In other words, I passed an exit exam. I’ve discussed the problem in earlier writings of the false illusion of causality, with a newspaper article saying that the new mafia members, former Soviet exiles, had been “hardened by a visit to the Gulag” (the Soviet concentration camps). Since the sojourn in the Gulag killed the weakest, one had the illusion of strengthening. Sometimes we see people having survived trials and imagine, given that the surviving population is sturdier than the original one, that these trials are good for them. In other words, the trial can just be a ruthless exam that kills those who fail. All we may be witnessing is that transfer of fragility (rather, antifragility) from the individual to the system that I discussed earlier. Let me present it in a different way. The surviving cohort, clearly, is stronger than the initial one—but not quite the individuals, since the weaker ones died.

  Someone paid a price for the system to improve.

  Me and Us

  This visible tension between individual and collective interests is new in history: in the past it was dealt with by the near irrelevance of individuals. Sacrifice for the sake of the group is behind the notion of heroism: it is good for the tribe, bad for those who perish under the fever of war. This instinct for heroism and the fading of individual interests in favor of the communal has become aberrant with suicide bombers. These pre-death terrorists get into a mood similar to an ecstatic trance in which their emotions drive them to become indifferent to their own mortality. It is a fallacy that suicide bombers are driven by the promise of a reward of some Islamic paradise with virgins and other entertainment, for, as the anthropologist Scott Atran has pointed out, the first suicide bombers in the Levant were revolutionaries of Greek Orthodox background—my tribe—not Islamists.

  There is something like a switch in us that kills the individual in favor of the collective when people engage in communal dances, mass riots, or war. Your mood is now that of the herd. You are part of what Elias Canetti calls the rhythmic and throbbing crowd. You can also feel a different variety of crowd experience during your next street riot, when fear of authorities vanishes completely under group fever.

  Let us now generalize the point. Looking at the world from a certain distance, I see a total tension between man and nature—a tension in the trade-off of fragilities. We saw how nature wants herself, the aggregate, to survive—not every species—just as, in turn, every single species wants its individuals to be fragile (particularly after reproduction), for evolutionary selection to take place. We saw how such transfer of fragility from individuals to species is necessary for its overall survival: species are potentially antifragile, given that DNA is information, but members of the species are perishable, hence ready to sacrifice and in reality designed to do so for the benefit of the collective.

  Antifragility shmantifragility. Some of the ideas about fitness and selection here are not very comfortable to this author, which makes the writing of some sections rather painful—I detest the ruthlessness of selection, the inexorable disloyalty of Mother Nature. I detest the notion of improvement thanks to harm to others. As a humanist, I stand against the antifragility of systems at the expense of individuals, for if you follow the reasoning, this makes us humans individually irrelevant.

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

  The unit in traditional cultures is the collective; and it could be perceived to be harmed by the behavior of an individual—the honor of the family is sullied when, say, a daughter becomes pregnant, or a member of the family engages in large-scale financial swindles and Ponzi schemes, or, worst, may even teach a college course in the charlatanic subject of financial economics. And these mores persist. Even as recently as the late nineteenth century or early twentieth, it was common in, say, rural France for someone to spend all his savings to erase the debts of a remote cousin (a practice called passer l’éponge, literally, to use a sponge to erase the liability from the chalkboard), and to do so in order to preserve the dignity and good name of the extended family. It was perceived as a duty. (I confess having done some of that myself in the twenty-first century!)

  Clearly the system needs to be there for the individual to survive. So one needs to be careful in glorifying one interest against others in the presence of interdependence and complexity.4

  In the Cosa Nostra, the Sicilian mafia, the designation “man of honor” (uomo d’onore) implies that the person caught by the police would remain silent and not rat on his friends, regardless of benefits, and that life in prison is preferable to a plea that entails hurting other members. The tribe (Cosa Nostra) comes before the individual. And what broke the back of the mafia was the recent generation of plea bargainers. (Note that “honor” in the mafia is limited to such in-group solidarity—they otherwise lie, and there is nothing honorable about them in other domains. And they kill people from behind, something that on the east side of the Mediterranean is considered the purest form of cowardice.)

  Likewise, we humans may have to be self-centered at the expense of other species, at the risk of ecological fragility, if it insures our survival. Our interests—as a human race—prevail over those of nature; and we can tolerate some inefficiency, some fragility, in order to protect individuals, although sacrificing nature too much may eventually hurt ourselves.

  We saw the trade-off between the interests of the collective and those of the individual. An economy cannot survive without breaking individual eggs; protection is harmful, and constraining the forces of evolution to benefit individuals does not seem required. But we can shield individuals from starvation, provide some social protection. And give them respect. Or more, as we see next.

  National Entrepreneur Day

  Meanwhile, if as a utopist (indeed), I hate what I am figuring out, I think that there is hope.

  Heroism and the respect it commands is a form of compensation by society for those who take risks for others. And entrepreneurship is a risky and heroic activity, necessary for growth or even the mere survival of the economy.

  It is also necessarily collective on epistemological grounds—to facilitate the development of expertise. Someone who did not find something is providing others with knowledge, the best knowledge, that of absence (what does not work)—yet he gets little or no credit for it. He is a central part of the process with incentives going to others and, what is worse, gets no respect.5

  I am an ingrate toward the man whose overconfidence caused him to open a restaurant and fail, enjoying my nice meal while he is probably eating canned tuna.

  In order to progress, modern society should be treating ruined entrepreneurs in the same way we honor dead soldiers, perhaps not with as much honor, but using exactly the same logic (the entrepreneur is still alive, though perhaps morally broken and socially stigmatized, particularly if he lives in Japan). For there is no such thing as a failed soldier, dead or alive (unless he acted in a cowardly manner)—likewi
se, there is no such thing as a failed entrepreneur or failed scientific researcher, any more than there is a successful babbler, philosophaster, commentator, consultant, lobbyist, or business school professor who does not take personal risks. (Sorry.)

  Psychologists label “overconfidence” a disease, blinding people to the odds of success when engaging in ventures. But there is a difference between the benign, heroic type of risk taking that is beneficial to others, in the antifragile case, and the nastier modern type related to negative Black Swans, such as the overconfidence of “scientists” computing the risks of harm from the Fukushima reactor. In the case of the former, what they call overconfidence is a good thing, not something to medicate.

  And compare entrepreneurs to the beancounting managers of companies who climb the ladder of hierarchy with hardly ever any real downside. Their cohort is rarely at risk.

  What Erasmus called ingratitudo vulgi, the ingratitude of the masses, is increasing in the age of globalization and the Internet.

  My dream—the solution—is that we would have a National Entrepreneur Day, with the following message:

  Most of you will fail, disrespected, impoverished, but we are grateful for the risks you are taking and the sacrifices you are making for the sake of the economic growth of the planet and pulling others out of poverty. You are at the source of our antifragility. Our nation thanks you.

  1 A technical comment on why the adaptability criterion is innocent of probability (the nontechnical reader should skip the rest of this note). The property in a stochastic process of not seeing at any time period t what would happen in time after t, that is, any period higher than t, hence reacting with a lag, an incompressible lag, is called nonanticipative strategy, a requirement of stochastic integration. The incompressibility of the lag is central and unavoidable. Organisms can only have nonanticipative strategies—hence nature can only be nonpredictive. This point is not trivial at all, and has even confused probabilists such as the Russian School represented by Stratonovich and the users of his method of integration, who fell into the common mental distortion of thinking that the future sends some signal detectable by us. We wish.

  2 Strong antifragility is when the love of volatility knows no bound—the gains have a remote limit or are truly unlimited—the sky is the limit. These can only exist in artificial, man-made life such as economic contracts and cultural products, not really in natural processes. More in the Appendix.

  3 He and his co-authors published in the journal Genes a paper on the idea of antifragility in biological systems. Interestingly, the article was in response to a draft of this book; in turn this book was modified in response to Danchin’s article.

  4 Many people think at first that their own death is the worst Black Swan scenario. It is not. Unless they’ve studied too much modern economics, they would agree explicitly that their death plus the death of their loved ones plus the termination of humanity would be a vastly worse outcome than their own death. Recall my comment on complex systems. We are a mere part of a large chain, and we are worried about both ourselves and the system, as well as the preservation of parts of that large chain.

  5 A correspondent, Jean-Louis Rheault, wrote, “I have noticed that the more people glorify the entrepreneur as an abstraction, the more they will scorn an actual one they meet.”

  BOOK II

  Modernity and the Denial of Antifragility

  As in Baudelaire’s sad poem about the albatross, what is made to fly will not do well trapped on the ground, where it is forced to traipse. And it is quite fitting that “volatility” comes from volare, “to fly” in Latin. Depriving political (and other) systems of volatility harms them, causing eventually greater volatility of the cascading type.

  This section, Book II, deals with the fragility that comes from the denial of hormesis, the natural antifragility of organisms, and how we hurt systems with the very best of intentions by playing conductor. We are fragilizing social and economic systems by denying them stressors and randomness, putting them in the Procrustean bed of cushy and comfortable—but ultimately harmful—modernity.

  Procrustes was an inn-keeper in Greek mythology who, in order to make the travelers fit in his bed, cut the limbs of those who were too tall and stretched those who were too short. But he had the bed fitting the visitor with total perfection.

  As we saw in Chapter 3, treating an organism like a simple machine is a kind of simplification or approximation or reduction that is exactly like a Procrustean bed. It is often with the most noble intentions that we do so, as we are pressured to “fix” things, so we often blow them up with our fear of randomness and love of smoothness.1

  Book II will also discuss the competition between man and natural forces, the craving of volatility by some antifragile systems, and how we make social, political (and other) systems vulnerable to Black Swans when we overstabilize them.

  1 Where simplifications fail, causing the most damage, is when something nonlinear is simplified with the linear as a substitute. That is the most common Procrustean bed.

  CHAPTER 5

  The Souk and the Office Building

  The Reds and the Whites all go to Zurich—War is not a prison—The turkey’s thwarted projects—Remember we are in Extremistan

  TWO TYPES OF PROFESSIONS

  Consider the fate of Ioannis (John) and Georgios (George), two identical twin brothers, born in Cyprus (both of them), currently both living in the Greater London area. John has been employed for twenty-five years as a clerk in the personnel department of a large bank, dealing with the relocation of employees around the globe. George is a taxi driver.

  John has a perfectly predictable income (or so he thinks), with benefits, four weeks’ annual vacation, and a gold watch every twenty-five years of employment. Every month, £3,082 is deposited in his local Nat West checking account. He spends a portion of it for the mortgage on his house west of London, the utilities, and feta cheese, and has a bit left for his savings. He used to wake up on Saturday morning, the day when people stretch and linger in bed, anxiety free, telling himself “life is good”—until the banking crisis, when he realized that his job could be “made redundant.” Unemployment would seriously hit him hard. As a personnel expert, he has seen the implosions of long careers, with persons who, laid off at the age of fifty, never recovered.

  George, who lives on the same street as his brother, drives a black taxi—meaning he has a license for which he spent three years expanding his frontal lobes by memorizing streets and itineraries in Greater London, which gives him the right to pick up clients in the streets. His income is extremely variable. Some days are “good,” and he earns several hundred pounds; some are worse, when he does not even cover his costs; but, year after year, he averages about the same as his brother. To date, he has only had a single day in his twenty-five-year career without a fare. Because of the variability of his income, he keeps moaning that he does not have the job security of his brother—but in fact this is an illusion, for he has a bit more.

  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.

  Artisans, say, taxi drivers, prostitutes (a very, very old profession), carpenters, plumbers, tailors, and dentists, have some volatility in their income but they are rather robust to a minor professional Black Swan, one that would bring their income to a complete halt. Their risks are visible. Not so with employees, who have no volatility, but can be surprised to see their income going to zero after a phone call from the personnel department. Employees’ risks are hidden.

  Thanks to variability, these artisanal careers harbor a bit of antifragility: small variations make them adapt and change continuously by learning from the environment and being, sort of, continuously under pressure to be fit. Remember that stressors are information; these careers face a continuous supply of these stressors that make them adjust opportunistically. In addition, they are open to gifts and positive
surprises, free options—the hallmark of antifragility, as we will see in Book IV. George was used to having, once in a while, a crazy request, one he was free to decline: during the Icelandic volcano scare, when U.K. air traffic was shut down, he was asked by a rich old lady to drive her to a wedding in the South of France—a two-thousand-mile round-trip journey. Likewise, a prostitute faces the small probability of seeing a severely infatuated rich client give her a very expensive diamond, or even an offer of matrimony, in what can be expected to be a short transitional period before her widowhood.

  And George has the freedom to continue until he drops (many people continue to drive cabs into their eighties, mostly to kill time), since he is his own boss, compared to his brother, who is completely unhireable in his fifties.

  The difference between the two volatilities in income applies to political systems—and, as we will see in the next two chapters, to about everything in life. Man-made smoothing of randomness produces the equivalent of John’s income: smooth, steady, but fragile. Such income is more vulnerable to large shocks that can make it go to zero (plus some unemployment benefits if he resides in one of the few welfare states). Natural randomness presents itself more like George’s income: smaller role for very large shocks, but daily variability. Further, such variability helps improve the system (hence the antifragility). A week with declining earnings for a taxi driver or a prostitute provides information concerning the environment and intimates the need to find a new part of town where clients hang around; a month or so without earnings drives them to revise their skills.