Antifragile

I also learned something quite amusing from the episode. My book was mistakenly submitted to four referees, all four of them academic financial economists instead of "quants" (quantitative analysts who work in finance using mathematical models). The person who made the submissions wasn't quite aware of the difference. The four academics rejected my book, interestingly, for four sets of completely different reasons, with absolutely no intersection in their arguments. We practitioners and quants aren't too fazed by remarks on the part of academics - it would be like prostitutes listenting to technical commentary by nuns. What struch me was that if I had been wrong, all of them would have provided the exact same reason for rejction. That's antifragility. Then, of course, as the publisher saw the mistake, the book was submitted to quantitative reviewers, and it saw the light of day. (p.264）

2016-03-20 19:33:21 ve called the Black Swan problem—the impossibility of calculating the risks of consequential rare events and predicting their occurrence. Sensitivity to harm from

2016-03-20 19:33:29 volatility is tractable, more so than forecasting the event that would cause the harm. So we propose to stand our current approaches to prediction, prognostication, and risk management on their heads.

2016-03-22 18:31:57 Black Swans hijack our brains, making us feel we “sort of” or “almost” predicted them, because they are retrospectively explainable. We don’t realize the role of these Swans in life because of this illusion of predictability.

2016-03-22 19:36:19 The rarer the event, the less tractable, and the less we know about

2016-03-22 19:36:24 how frequent its occurrence—yet the

2016-03-22 21:33:28 the study of the sensitivity of things to volatility is the strange business specialty in which I spent most of

2016-03-22 21:33:34 my adult life,

2016-03-23 22:25:18 moderns try today to create inventions from situations of comfort, safety, and predictability instead of accepting the notion that “necessity really is the mother of invention.”

2016-03-23 22:26:55 Undercompensation from the absence of a stressor, inverse hormesis, absence of challenge, degrades the best of the best.

2016-03-23 22:29:02 This paradox of attention has been a little bit investigated: there is empirical evidence of the effect of “disfluency.” Mental effort moves us into higher gear, activating more vigorous and more analytical brain ma

2016-03-23 22:29:11 chinery.

2016-03-23 22:30:04 Consider our bedtime predilection for the rustle of tree leaves or the sound of the ocean: there are even electric contraptions that produce “white noise”

2016-03-23 23:44:31 Psychologists have shown the irony of the process of thought control: the more energy you put into trying to control your ideas and what you think about, the more your ideas end up controlling you.

2016-03-24 00:11:18 For the nonorganic, noncomplex, say, an object on the table, equilibrium (as traditionally defined) happens in a state of inertia. So for something organic, equilibrium (in that sense) only happens with death.

2016-03-25 03:25:59 There are hundreds of thousands of plane flights every year, and a crash in one plane does not involve others, so errors remain confined and highly epistemic—whereas globalized economic systems operate as one: errors spread and compound.

2016-03-25 03:43:06 And of course you learn from the errors of others. You may never know what type of person someone is unless they are given opportunities to violate moral or ethical codes.

2016-03-27 21:03:53 Finally, a thought. He who has never sinned is less reliable than he who has only sinned once.

2016-03-25 20:58:35 Obama’s mistake illustrates the illusion of local causal chains—that is, confusing catalysts for causes and assuming that one can know which catalyst will produce which effect.

2016-03-25 21:52:16 My idea of the modern Stoic sage is someone who transforms fear into prudence, pain into informa

2016-03-25 21:52:21 tion, mistakes into initiation, and desire into undertaking.

2016-03-27 21:05:48 One finds similar ideas in ancestral lore: it is explained in a Yiddish proverb that says “Provide for the worst; the best can take care of itself.” This may sound like a platitude, but it is not: just observe how people tend to provide for the best and hope that the worst will take care of itself.

2016-03-26 06:32:47 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.

2016-03-27 06:10:42 Now the very simple point, in fact, that allows for a detection of fragility: For the fragile, shocks bring higher harm as their intensity increases (up to a certain level).

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.

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Where simplifications fail, causing the most damage, is when something nonlinear is simplified with the linear as a substitute.

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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,

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Man-made smoothing of randomness produces the equivalent of John’s income: smooth, steady, but fragile.

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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.

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Nature loves small errors (without which genetic variations are impossible), humans don’t—hence when you rely on human judgment you are at the mercy of a mental bias that disfavors antifragility.

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But this bottom-up form of dictatorship provides protection against the romanticism of utopias, since no big ideas can be generated in such an unintellectual atmosphere—it suffices to spend some time in cafés in the old section of Geneva, particularly on a Sunday afternoon, to understand that the process is highly unintellectual, devoid of any sense of the grandiose, even downright puny (there is a famous quip about how the greatest accomplishment of the Swiss was inventing the cuckoo clock while other nations produced great works—nice story except that the Swiss did not invent the cuckoo clock). But the system produces stability—boring stability—at every possible level.

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On a large scale, others are abstract items; given the lack of social contact with the people concerned, the civil servant’s brain leads rather than his emotions—with numbers, spreadsheets, statistics, more spreadsheets, and theories.

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Mediocristan—plenty of variations that might be scary, but tend to cancel out in the aggregate (over time, or over the collection of municipalities that constitute the larger confederation or entity)—rather than the unruly one called Extremistan, in which you have mostly stability and occasionally large chaos—errors there have large consequences.

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The butcher will keep feeding the turkey until a few days before Thanksgiving. Then comes that day when it is really not a very good idea to be a turkey. So with the butcher surprising it, the turkey will have a revision of belief—right when its confidence in the statement that the butcher loves turkeys is maximal and “it is very quiet” and soothingly predictable in the life of the turkey. This example builds on an adaptation of a metaphor by Bertrand Russell. The key here is that such a surprise will be a Black Swan event; but just for the turkey, not for the butcher.

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Consider the method of annealing in metallurgy, 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. Just as with Buridan’s donkey, 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

It is said that the best horses lose when they compete with slower ones, and win against better rivals. Undercompensation from the absence of a stressor, inverse hormesis, absence of challenge, degrades the best of the best. In Baudelaire’s poem, “The albatross’s giant wings prevent him from walking”—many do better in Calculus 103 than Calculus 101.

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So not only are we made to overcompensate, but we sometimes need the noise. Like many writers, I like to sit in cafés, working, as they say, against resistance. Consider our bedtime predilection for the rustle of tree leaves or the sound of the ocean: there are even electric contraptions that produce “white noise”3 that helps people sleep better. Now these small distractions, like hormetic responses, act up to a point.

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If humans fight the last war, nature fights the next one. Your body is more imaginative about the future than you are. Consider how people train in weightlifting: the body overshoots in response to exposures and overprepares (up to the point of biological limit, of course). This is how bodies get stronger.

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The workout was limited to trying to exceed that mark once or twice, rather than spending time on un-entertaining time-consuming repetitions.

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Like tormenting love, some thoughts are so antifragile that you feed them by trying to get rid of them, turning them into obsessions. Psychologists have shown the irony of the process of thought control: the more energy you put into trying to control your ideas and what you think about, the more your ideas end up controlling you.

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Information is antifragile; it feeds more on attempts to harm it than it does on efforts to promote it. For instance, many wreck their reputations merely by trying to defend it. The wily Venetians knew how to spread information by disguising it as a secret. Try it out with the following experiment in spreading gossip: tell someone a secret and qualify it by insisting that it is a secret, begging your listener “not to tell anyone”; the more you insist that it remain a secret, the more it will spread.

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There is a visible selection bias: why did he attack you instead of someone else, one of the millions of persons deserving but not worthy of attack? It is his energy in attacking or badmouthing that will, antifragile style, put you on the map.

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“My son, I am very disappointed in you,” he said. “I never hear anything wrong said about you. You have proven yourself incapable of generating envy.”

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You do not want to “control” your reputation; you won’t be able to do it by controlling information flow. Instead, focus on altering your exposure, say, by putting yourself in a position impervious to reputational damage. Or even put yourself in a situation to benefit from the antifragility of information. In that sense, a writer is antifragile, but we will see later most modernistic professions are usually not.

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So I end this section with a thought. It is quite perplexing that those from whom we have benefited the most aren’t those who have tried to help us (say with “advice”) but rather those who have actively tried—but eventually failed—to harm us.

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Now the crux of complex systems, those with interacting parts, is that they convey information to these component parts through stressors, or thanks to these stressors: your body gets information about the environment not through your logical apparatus, your intelligence and ability to reason, compute, and calculate, but through stress, via hormones or other messengers we haven’t discovered yet.

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For complex systems are, well, all about information. And there are many more conveyors of information around us than meet the eye. This is what we will call 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. As I said, the predictability of specific events is low, and it is such opacity that makes it low. Not only that, but because of nonlinearities, one needs higher visibility than with regular systems—instead what we have is opacity.

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Such a stressor would be certainly better than the mild but continuous stress of a boss, mortgage, tax problems, guilt over procrastinating with one’s tax return, exam pressures, chores, emails to answer, forms to complete, daily commutes—things that make you feel trapped in life. In other words, the pressures brought about by civilization. In fact, neurobiologists show that the former type of stressor is necessary, the second harmful, for one’s health.

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And once in a while one hears shouts of “who is governing us?” as if the world needs someone to govern it.

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It is 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.

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it consists in converting activities, and not just travel, into the equivalent of a script like those followed by actors. We will see how touristification castrates systems and organisms that like uncertainty by sucking randomness out of them to the last drop—while providing them with the illusion of benefit. The guilty parties are the education system, planning the funding of teleological scientific research, the French baccalaureate, gym machines, etc.

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Unlike with hormesis, the unit does not get stronger in response to stress; it dies. But it accomplishes a transfer of benefits; other units survive—and those that survive have attributes that improve the collective of units, leading to modifications commonly assigned the vague term “evolution” in textbooks and in the New York Times Tuesday science section. So the antifragility of concern here is not so much that of the organisms, inherently weak, but rather that of their genetic code, which can survive them. The code doesn’t really care about the welfare of the unit itself—quite the contrary, since it destroys many things around it.

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The more noise and disturbances in the system, up to a point, barring those extreme shocks that lead to extinction of a species, the more the effect of the reproduction of the fittest and that of random mutations will play a role in defining the properties of the next generation.

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Even when there is extinction of an entire species after some extreme event, no big deal, it is part of the game. This is still evolution at work, as those species that survive are fittest and take over from the lost dinosaurs—evolution is not about a species, but at the service of the whole of nature.

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We can simplify the relationships between fragility, errors, and antifragility as follows. When you are fragile, you depend on things following the exact planned course, with as little deviation as possible—for deviations are more harmful than helpful. This is why the fragile needs to be very predictive in its approach, and, conversely, predictive systems cause fragility. When you want deviations, and you don’t care about the possible dispersion of outcomes that the future can bring, since most will be helpful, you are antifragile.

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And of course you learn from the errors of others. You may never know what type of person someone is unless they are given opportunities to violate moral or ethical codes.

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Further, my characterization of a loser is someone who, after making a mistake, doesn’t introspect, doesn’t exploit it, feels embarrassed and defensive rather than enriched with a new piece of information, and tries to explain why he made the mistake rather than moving on. These types often consider themselves the “victims” of some large plot, a bad boss, or bad weather.

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Finally, a thought. He who has never sinned is less reliable than he who has only sinned once.

someone who has made plenty of errors—though never the same error more than once—is more reliable than someone who has never made any.

Someone paid a price for the system to improve.