Antifragile: Things That Gain from Disorder

by Taleb, Nassim Nicholas

  In other words, what is called sacrifice. And the word “sacrifice” is related to sacred, the domain of the holy that is separate from that of the profane.

  In traditional societies, a person is only as respectable and as worthy as the downside he (or, more, a lot more, than expected, she) is willing to face for the sake of others. The most courageous, or valorous, occupy the highest rank in their society: knights, generals, commanders. Even mafia dons accept that such rank in the hierarchy makes them the most exposed to be whacked by competitors and the most penalized by the authorities. The same applies to saints, those who abdicate, devote their lives to serve others—to help the weak, the deprived, and the dispossessed.

  So Table 7 presents 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.

  Click here for a larger image of this table.

  Let me follow my emotions and start with the third column, on the far right, the one about heroes and people of courage. The robustness—even antifragility—of society depends on them; if we are here today, it is because someone, at some stage, took some risks for us. But courage and heroism do not mean blind risk taking—it is not necessarily recklessness. There is a pseudocourage that comes from risk blindness, in which people underestimate the odds of failure. We have ample evidence that the very same people become chicken and overreact in the face of real risks; the exact opposite. For the Stoics, prudence is connatural to courage—the courage to fight your own impulses (in an aphorism by—who else—Publilius Syrus, prudence was deemed the courage of the general).

  Heroism has evolved through civilization from the martial arena to that of ideas. Initially, in preclassical times, the Homeric hero was someone principally endowed with physical courage—since everything was physical. In later classical times, for such people as the great Lacedaemonian king Agiselaus, a truly happy life was one crowned by the privilege of death in battle, little else, perhaps even nothing else. But for Agiselaus, courage had already evolved from purely martial prowess into something greater. Courage was often seen in acts of renunciation, as when one is ready to sacrifice himself for the benefit of others, of the collective, something altruistic.

  Finally, a new form of courage was born, that of the Socratic Plato, which is the very definition of the modern man: the courage to stand up for an idea, and enjoy death in a state of thrill, simply because the privilege of dying for truth, or standing up for one’s values, had become the highest form of honor. And no one has had more prestige in history than two thinkers who overtly and defiantly sacrificed their lives for their ideas—two Eastern Mediterraneans; one Greek and one Semite.

  We should pause a little when we hear happiness defined as an economic or otherwise puny materialistic condition. You can imagine how distraught I feel when I hear about the glorified heroism-free “middle class values,” which, thanks to globalization and the Internet, have spread to any place easily reached by British Air, enshrining the usual opiates of the deified classes: “hard work” for a bank or a tobacco company, diligent newspaper reading, obedience to most, but not all, traffic laws, captivity in some corporate structure, dependence on the opinion of a boss (with one’s job records filed in the personnel department), good legal compliance, reliance on stock market investments, tropical vacations, and a suburban life (under some mortgage) with a nice-looking dog and Saturday night wine tasting. Those who meet with some success enter the gallery of the annual billionaire list, where they will hope to spend some time before their fertilizer sales are challenged by competitors from China. They will be called heroes—rather than lucky. Further, if success is random, a conscious act of heroism is nonrandom. And the “ethical” middle class may work for a tobacco company—and thanks to casuistry call themselves ethical.

  I am even more distraught for the future of the human race when I see a nerd behind a computer in a D.C. suburb, walking distance from a Starbucks coffeehouse, or a shopping mall, capable of blowing up an entire battalion in a remote place, say Pakistan, and afterward going to the gym for a “workout” (compare his culture to that of knights or samurai). Cowardice enhanced by technology is all connected: society is fragilized by spineless politicians, draft dodgers afraid of polls, and journalists building narratives, who create explosive deficits and compound agency problems because they want to look good in the short term.

  A disclaimer. Table 7 does not imply that those with soul in the game are necessarily right or that dying for one’s ideas makes one necessarily good for the rest of us: many messianic utopians have caused quite a bit of harm. Nor is a grandiose death a necessity: many people fight evil in the patient grind of their daily lives without looking like heroes; they suffer society’s ingratitude even more—while media-friendly pseudoheroes rise in status. These people will not get a statue from future generations.

  A half-man (or, rather, half-person) is not someone who does not have an opinion, just someone who does not take risks for it.

  The great historian Paul Veyne has recently shown that it is a big myth that gladiators were forced labor. Most were volunteers who wanted the chance to become heroes by risking their lives and winning, or, when failing, to show in front of the largest crowd in the world how they were able to die honorably, without cowering—when a gladiator loses the fight the crowd decides whether he should be spared or put to death by the opponent. And spectators did not care for nonvolunteers, as these did not have their soul in the fight.

  My greatest lesson in courage came from my father—as a child, I had admired him before for his erudition, but was not overly fazed since erudition on its own does not make a man. He had a large ego and immense dignity, and he demanded respect. He was once insulted by a militiaman at a road check during the Lebanese war. He refused to comply, and got angry at the militiaman for being disrespectful. As he drove away, the gunman shot him in the back. The bullet stayed in his chest for the rest of his life so he had to carry an X-ray image through airport terminals. This set the bar very high for me: dignity is worth nothing unless you earn it, unless you are willing to pay a price for it.

  A lesson I learned from this ancient culture is the notion of megalopsychon (a term expressed in Aristotle’s ethics), a sense of grandeur that was superseded by the Christian value of “humility.” There is no word for it in Romance languages; in Arabic it is called Shhm—best translated as nonsmall. If you take risks and face your fate with dignity, there is nothing you can do that makes you small; if you don’t take risks, there is nothing you can do that makes you grand, nothing. And when you take risks, insults by half-men (small men, those who don’t risk anything) are similar to barks by nonhuman animals: you can’t feel insulted by a dog.

  HAMMURABI

  Let us now work with the elements of Table 7 and bring the unifying foundational asymmetry (between upside and downside) into our central theme, ethics. Just as only business school professors and similar fragilistas separate robustness and growth, we cannot separate fragility and ethics.

  Some people have options, or have optionality, at the expense of others. And the others don’t know it.

  The effects of transfers of fragility are becoming more acute, as modernity is building up more and more people on the left column—inverse heroes, so to say. So many professions, most arising from modernity, are affected, becoming more antifragile at the expense of our fragility—tenured government employees, academic researchers, journalists (of the non-myth-busting variety), the medical establishment, Big Pharma, and many more. Now how do we solve the problem? As usual, with some great help from the ancients.

  Hammurabi’s code—now about 3,800 years old—identifies the need to reestablish a symmetry of fragility, spelled out as follows:

  If a builder builds a house and the house collapses and causes the death of the owner of the house—the builder shall be put to death. If it
causes the death of the son of the owner of the house, a son of that builder shall be put to death. If it causes the death of a slave of the owner of the house—he shall give to the owner of the house a slave of equal value.

  It looks like they were much more advanced 3,800 years ago than we are today. The entire idea is that the builder knows more, a lot more, than any safety inspector, particularly about what lies hidden in the foundations—making it the best risk management rule ever, as the foundation, with delayed collapse, is the best place to hide risk. Hammurabi and his advisors understood small probabilities.

  Now, clearly the object here is not to punish retrospectively, but to save lives by providing up-front disincentive in case of harm to others during the fulfillment of one’s profession.

  These asymmetries are particularly severe when it comes to small-probability extreme events, that is, Black Swans—as these are the most misunderstood and their exposure is easiest to hide.

  Fat Tony has two heuristics.

  First, never get on a plane if the pilot is not on board.

  Second, make sure there is also a copilot.

  The first heuristic addresses the asymmetry in rewards and punishment, or transfer of fragility between individuals. Ralph Nader has a simple rule: people voting for war need to have at least one descendant (child or grandchild) exposed to combat. For the Romans, engineers needed to spend some time under the bridge they built—something that should be required of financial engineers today. The English went further and had the families of the engineers spend time with them under the bridge after it was built.

  To me, every opinion maker needs to have “skin in the game” in the event of harm caused by reliance on his information or opinion (not having such persons as, say, the people who helped cause the criminal Iraq invasion come out of it completely unscathed). 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 (to repeat, forecasts induce risk taking; they are more toxic to us than any other form of human pollution).

  We can derive plenty of sub-heuristics from Fat Tony’s rules, particularly to mitigate the weaknesses of predictive systems. Predicting—any prediction—without skin in the game can be as dangerous for others as unmanned nuclear plants without the engineer sleeping on the premises. Pilots should be on the plane.

  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 rest of this chapter will present a few syndromes, with, of course, some ancient remedies.

  THE TALKER’S FREE OPTION

  We closed Book I by arguing that we need to put entrepreneurs and risk takers, “failed” or not, on top of the pyramid, and, unless they take personal risks when they expose others, academizing academics, talkers, and political politicians at the bottom. The problem is that society is currently doing the exact opposite, granting mere talkers a free option.

  The idea that Fat Tony milked suckers when they ran to the exit door seemed at first quite inelegant to Nero. Benefiting from the misfortune of others—no matter how hideous these are and can be—is not the most graceful approach to life. But Tony had something at risk, and would have been personally harmed by an adverse outcome. Fat Tony had no agency problem. This makes it permissible. For there is an even worse problem associated with the opposite situation: people who just talk, prognosticate, theorize.

  In fact, speculative risk taking is not just permissible; it is mandatory. No opinion without risk; and, of course, no risk without hope for return. If Fat Tony had an opinion, he felt he needed, for ethical reasons, to have a corresponding exposure. As they say in Bensonhurst, you got to do so if you have an opinion. Otherwise, you do not really have an opinion at all. You need to be earmarked as someone who has no downside for his opinion, with a special status in society, perhaps something below that of ordinary citizen. Commentators need to have a status below ordinary citizens. Regular citizens, at least, face the downside of their statements.

  So counter to the entire idea of the intellectual and commentator as a detached and protected member of society, I am stating here that I find it profoundly unethical to talk without doing, without exposure to harm, without having one’s skin in the game, without having something at risk. You express your opinion; it can hurt others (who rely on it), yet you incur no liability. Is this fair?

  But this is the information age. This effect of transferring fragility might have been present throughout history, but it 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. How?

  In the old days, privilege came with obligations—except for the small class of intellectuals who served a patron or, in some cases, the state. You want to be a feudal lord—you will be first to die. You want war? First in battle. Let us not forget something embedded in the U.S. Constitution: the president is commander in chief. Caesar, Alexander, and Hannibal were on the battlefield—the last, according to Livy, was first-in, last-out of combat zones. George Washington, too, went to battle, unlike Ronald Reagan and George W. Bush, who played video games while threatening the lives of others. Even Napoleon was personally exposed to risks; his showing up during a battle was the equivalent of adding twenty-five thousand troops. Churchill showed an impressive amount of physical courage. They were in it; they believed in it. Status implied you took physical risks.

  Note that in traditional societies even those who fail—but have taken risks—have a higher status than those who are not exposed.

  Now, again, the idiocy of predictive systems, making me emotional. We may have more social justice today than before the Enlightenment, but we also have more, a lot more transfers of optionality, more than ever—a patent setback. Let me explain. This knowledge shknowledge business necessarily means shifting to talk. Talk by academics, consultants, and journalists, when it comes to predictions, can be just talk, devoid of embodiment and stripped of true evidence. As in anything with words, it is not the victory of the most correct, but that of the most charming—or the one who can produce the most academic-sounding material.

  We mentioned earlier how the political philosopher Raymond Aron sounded uninteresting in spite of his predictive abilities, while those who were wrong about Stalinism survived beautifully. Aron was about as colorless as they come: in spite of his prophetic insights he looked, wrote, and lived like a tax accountant while his enemy, say, Jean-Paul Sartre, who led a flamboyant lifestyle, got just about everything wrong and even put up with the occupying Germans in an extremely cowardly manner. Sartre the coward looked radiant, impressive, and, alas, his books survived (please stop calling him a Voltaire; he was no Voltaire).

  I got nauseous in Davos making eye contact with the fragilista journalist Thomas Friedman who, thanks to his influential newspaper op-eds, helped cause the Iraq war. He paid no price for the mistake. The real reason for my malaise was perhaps not just that I saw someone I consider vile and harmful. I just get disturbed when I see wrong and do nothing about it; it is biological. It is guilt, for Baal’s sake, and guilt is what I do not have to put up with. There is another central element of ancient Mediterranean ethics: Factum tacendo, crimen facias acrius: For Publilius Syrus, he who does not stop a crime is an accomplice. (I’ve stated my own version of this in the prologue, which needs to be reiterated: if you see fraud and don’t say fraud, you are a fraud.)

  Thomas Friedman was a bit responsible for the Iraq invasion of 2003, and not only paid no penalty for it but continues to write for the op-ed page of The New York Times, confusing innocent people. He got—and kept—the upside, others get the downside. A writer with arguments can harm more people than any serial criminal. I am singling him out here because, at the
core, the problem is his promotion of the misunderstanding of iatrogenics in complex systems. He promoted the “earth is flat” idea of globalization without realizing that globalization brings fragilities, causes more extreme events as a side effect, and requires a great deal of redundancies to operate properly. And the very same error holds with the Iraq invasion: in such a complex system, the predictability of the consequences is very low, so invading was epistemologically irresponsible.

  Natural and ancestral systems work by penalties: no perpetual free option given to anyone. So does society in many things with visible effects. If someone drives a school bus blindfolded, and has an accident, he either exits the gene pool the old-fashioned way, or, if for some reason he is not harmed by the accident, he will incur enough penalties to be prevented from driving other people ever again. The problem is that the journalist Thomas Friedman is still driving the bus. There is no penalty for opinion makers who harm society. And this is a very bad practice. The Obama administration was after the crisis of 2008 populated with people who drove the bus blindfolded. The iatrogenists got promoted.

  Postdicting

  Words are dangerous: postdictors, who explain things after the fact—because they are in the business of talking—always look smarter than predictors.

  Because of the retrospective distortion, people who of course did not see an event coming will remember some thought to the effect that they did, and will manage to convince themselves that they predicted it, before proceeding to convince others. There will be after every event many more postdictors than true predictors, people who had an idea in the shower without taking it to its logical conclusion, and, given that many people take a lot of showers, say, nearly twice a day (if you include the gym or the episode with the mistress), they will have a large repertoire to draw from. They will not remember the numerous bath-generated ideas they had in the past that were either noise, or that contradicted the observed present—but as humans crave self-consistency, they will retain those elements of what they thought in the past that cohere with their perception of the present.