in Book Summaries

Takeaways from ‘Antifragile: Things that Gain from Disorder’

I recently finished Nassim Nicholas Taleb’s book Antifragile: Things that Gain from Disorder off of Zach Obront‘s recommendation, and boy, was it a read.

I’d previously completed his previous book The Black Swan (referring to large unpredictable unusual events) and found Taleb’s style  reminiscent of a ‘street academic’ – someone who knows what he is talking about in a technical manner but teaches it to you in the language of the streets. He invents gangster characters who epitomize his ideas, ties learnings back to historical events, authors, or his own unique experience as a Lebanese expatriate, and isn’t afraid to call out people who he thinks are messing the world up.

His books are dense – I found it hard to read more than a few chapters in one sitting – but in a good way, as they the knowledge comes fast and furious. You need time afterwards to be able to sit back and soak it in. This was the case for Antifragile, although I found it more thorough and satisfying than Black Swan because it focused on how Black Swans can be a source of strength rather then weakness. It is much more actionable than his other work.

Overall I found it a very worthy read, although his massive ego is distracting at times, and I disagreed with his disparagement of neomania (the obsession with the new for its own sake). Sure, the paleo diet still makes sense, as does grandmotherly advice (he laments that we are moving away from grandmothers towards academics), but technology and knowledge builds upon itself, so I think in many industries what is new truly is better. But I agree that new for its own sake is bad – for example, the iPhone 4 is just as capable as the 5 for my purposes.

What follows are some of the most intriguing concepts from the book, along with actionables and some choice quotes.

Concepts:

Antifragility – “Fragile things are at best unharmed, robust things are at best and worst unharmed, while antifragile is the true opposite, at worst unharmed.” 

Taleb argues that antifragility is the best way to be, because you will always face hazards, disorder, and uncertainty, so it is best to benefit from them if you can rather than simply surviving them. Political movements and rebellions are very antifragile – if you try to squash them they get stronger. ‘That which does not kill you makes you stronger’ applies here.

Moral: Being robust is not enough. Turn entropy to your advantage.

Barbell Strategy – a barbell strategy is when you embrace the concept of risk but rely on safety. So, you might ‘weight’ your stocks 80% in safe bets (like treasury bills), and 20% in high risk high rewards. Then, risk can’t hurt you – if the risky ones tank, you still can sit pretty on your 80% of safety, but if they explode, then all the better.

Moral: It boils down to avoiding the middle path – be mostly conservative and a little bit crazy. Then you get the best of both with little to lose

The Turkey Problem illustrates why you can’t rely on forecasting and predictions. A turkey is fed for 1,000 days by the butcher, and every day increases its confidence that the butcher loves turkeys and will continue to treat it well. But on Thanksgiving, that predication is proven grossly incorrect. The turkey is vulnerable to the Black Swan of the knife, no matter how many days it is treated well.

Moral: Never rely on predictions.

Mithridatism (or hormeosis) – when you treat something with small amounts of a detrimental substance in order to build up immunity to the substance, like with vaccines. Or the Hydra of Greek myth – cutting its head off made it stronger. Or carrying water on your head daily -this improves posture and strengthens the neck. There are plenty of applications for this outside of medicine. Taleb notes that this is one of the defining differences between machines and organisms – small stressors stack and can overwhelm the former, whereas they make the latter stronger over time.

Moral: A regular dose of bad can be good.

Tourisification – “the systematic removal of uncertainty and randomness from things, trying to make matters highly predictable in their smallest details. All that for the sake of comfort, convenience, and efficiency

This attack on randomness is rampant today, what with liability forms,  lifeless tourist trap cities, and the general overreaction to any sort of risk possible. Proponents claim it is for the best, but really it makes things more fragile. It turns life into a stale certainty, rather than an exciting uncertainty. The opposite of a tourist is a flaneur – one who embraces the optionality present in every new turn of events.

Moral: Step outside the lines, make mistakes, get dirty – sticking to the itinerary sucks the best of life out in favor of safety.

Skin in the game – An actor has skin in the game if the outcome of the event affects him personally. Taleb denigrates all forecasters, economists, and commentators because they are giving advice without reaping the effects of the advice. If someone takes that advice, it reflects poorly/well on them, not the advisor. Thus it is not as important to them to be correct as it would be if they were the ones faced with the outcome.

Carlos Micelli makes a great point that the modern education system does not have skin in the game due to over-tourisificaiton “Here’s your diploma – good luck finding a job!”. The success of alumni does not truly matter to a university – just their donations.

Taleb notes that Romans would make engineers sleep under their aqueducts, to confirm solid construction. Talk about skin in the game! Likewise, Taleb supports Ralph Nader’s proposed requirement that people voting for war must have one direct relative who would fight in it – otherwise their vote is worthless.

Moral: People need to be affected directly by their own actions, or else they’re useless. There’s no such thing as “retweets do not imply endorsement

Failed entrepreneurs should be treated as heroes: Just like fallen soldiers, they risked personal wellness in order to push innovation forward. If they succeed, the world benefits, but if they fail, only they go bankrupt. The risk is shifted onto themselves – just like a soldier putting their life before their country! Taleb notes “There’s no such thing as a failed entrepreneur/researcher any more than a there is a successful consultant or commentator.

Moral: Entrepreneurs shoulder inordinate risk at personal cost for public gain and should be recognized as such.

The Swiss lack of big government – Switzerland does not have a large central government. Instead it has cantons – near sovereign micro states united in confederation. Thus enmities stay at the municipal level – over things like where to place the water fountain. Since governance is bottom up not top down, the volatility inherent in government is neutralized and antifragility is achieved. I mean, look at how well they do when bad things happen in the rest of the world. Though I’ll wager the mountains help with that.

Moral: United small governments is better than one big one. Bureaucracy sucks.

Taleb’s auto didacticism – In school he duly achieved, but he truly learned  by renting books by the truckload and reading at least 30 hours every week. His rule was to only read things he was interested in, and so would switch books midway if they lost relevance – the important thing was to keep reading. Five years later he was set for life and has made an academic career out of small probability events.

Moral: What you’re told to read, you forget, but what you read on your own, you remember.

This is a lot more fun, efficient, and memorable method than studying just the books you’re told to in school. Couldn’t we assign homework like this? Give out Kindles and track how many hours each week they spend reading their prepurchased library of options on whatever subject they desired. I would have certainly preferred that to Catcher in the Rye – ugh!

Quotes:

Fewer pedestrians die jaywalking than using regular crossings. Motorists need the sense of danger to feed their attention, rather than external controls. In Drachten, Netherlands, all street signs were removed and traffic accidents decreased. Antifragility is whetted by danger and responsibility.”

“My idea of the modern Stoic sage is someone who transforms fear into prudence, pain into information, mistakes into initiation, and desire into undertaking. A Stoic is a Buddhist with attitude, one who says “f*** you” to fate.”

“Venture capitalists back entrepreneurs more than ideas. Why? Because innovations drift, and one needs flaneurial abilities to capture opportunities that arise rather than staying locked in a 5 year strategic plan.”

“Charlatans are recognizable in that they give you only positive advice, while avoiding the negative. In practice, the learning of life is what to avoid.”

“Amateurs in any discipline are the best, if you can connect with them. Unlike dilettantes, career professionals are to knowledge what prostitutes are to love. (Reminds me of Tim Ferriss’s looking for the odd men out when learning from pros)

“No doctor derives pleasure from the health of his friends, no soldier from the peace of his city, and so on. Never ask anyone for their opinion, forecast, or recommendation. Just ask them what they have—or don’t have—in their portfolio.”

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