Book Review: Antifragile by Nassim Nicholas Taleb

Haft Suarez review of Antifragile

This is the first in a series of book reviews we’ll be writing. Going forward, when we find something particularly striking, we’ll share it. 

Antifragile, by Nassim Nicholas Taleb, is a special book, one of those works you come across only rarely. It grabs you by the shoulders. It shakes you violently. It turns your world upside down. It is a book that cannot possibly be encapsulated in a review, and yet we are going to try and express it in such a way that makes it accessible.

First, some definitions.

Antifragile is a term Taleb coins to describe things which have more upside than downside from random events or shocks. In other words, antifragile things are those that benefit from stress and disorder.

Humans, to a point, demonstrate antifragility. For example, if you go to the gym and lift weights, your muscles grow back stronger.

Beyond that point, humans are fragile. If you are squashed by a heavy rock, that’s it. There is no benefit.

This interplay between fragility and antifragility is where the book gets really interesting. Because as Taleb writes, our individual fragility at the extremes serves to make us antifragile as a species. And this is what he really wants to discuss: the degree to which systems are exposed to harm.

In his view of modernity, the steady march toward artificial stability makes us more vulnerable to large shocks. The banking crisis of 2008 is one such example. Taleb’s call is to embrace the chaos and the randomness of life, to suffer many small setbacks instead of massive breakdowns.

Antifragile is a new word to describe an old concept. In the months since the book’s release, it’s been fascinating to see the reception. Reviewers have critiqued Taleb’s style. They have used his professional background as fodder for pigeonholing the book. They have tried to divine what his ideas mean for national policy.

They have mostly missed the point.

Antifragile is Taleb’s philosophical manifesto. It is a way of organizing your life so as to benefit from the reality that we live in a chaotic, disordered, and uncertain world.

Consider:

In every domain or area of application, we propose rules for moving from the fragile toward the antifragile, through reduction of fragility or harnessing antifragility. And 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.

Crucially, 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. They will weaken, die, or blow up. We have been fragilizing the economy, our health, political life, education, almost everything … by suppressing randomness and volatility. Just as spending a month in bed (preferably with an unabridged version of War and Peace and access to The Sopranos’ entire eighty-six episodes) leads to muscle atrophy, complex systems are weakened, even killed, when deprived of stressors. Much of our modern, structured, world has been harming us with top-down policies and contraptions (dubbed “Soviet-Harvard delusions” in the book) which do precisely this: an insult to the antifragility of systems.

At no point in history have so many non-risk-takers, that is, those with no personal exposure, exerted so much control. The chief ethical rule is the following: Thou shalt not have antifragility at the expense of the fragility of others.

Modernity has replaced ethics with legalese, and the law can be gamed with a good lawyer.

To summarize, the problem with artificially suppressed volatility is not just that the system tends to become extremely fragile; it is that, at the same time, it exhibits no visible risks. Also remember that volatility is information. In fact, these systems tend to be too calm and exhibit minimal variability as silent risks accumulate beneath the surface. Although the stated intention of political leaders and economic policy makers is to stabilize the system by inhibiting fluctuations, the result tends to be the opposite. These artificially constrained systems become prone to Black Swans. Such environments eventually experience massive blowups…catching everyone off guard and undoing years of stability or, in almost all cases, ending up far worse than they were in their initial volatile state. Indeed, the longer it takes for the blowup to occur, the worse the resulting harm to both economic and political systems.

How do you innovate? First, try to get in trouble. I mean serious, but not terminal, trouble. I hold—it is beyond speculation, rather a conviction—that innovation and sophistication spark from initial situations of necessity, in ways that go far beyond the satisfaction of such necessity (from the unintended side effects of, say, an initial invention or attempt at invention). Naturally, there are classical thoughts on the subject, with a Latin saying that sophistication is born out of hunger (artificia docuit fames). The idea pervades classical literature: in Ovid, difficulty is what wakes up the genius (ingenium mala saepe movent), which translates in Brooklyn English into “When life gives you a lemon …”

A midlevel bank employee with a mortgage would be fragile to the extreme. In fact he would be completely a prisoner of the value system that invites him to be corrupt to the core—because of his dependence on the annual vacation in Barbados. The same with a civil servant in Washington.

Look for optionality; in fact, rank things according to optionality, (ii) preferably with open-ended, not closed-ended, payoffs; (iii) Do not invest in business plans but in people, so look for someone capable of changing six or seven times over his career, or more (an idea that is part of the modus operandi of the venture capitalist Marc Andreessen); one gets immunity from the backfit narratives of the business plan by investing in people. It is simply more robust to do so; (iv) Make sure you are barbelled, whatever that means in your business.

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 final lesson is that one should not expect laurels for bringing the truth

There’s a lot to unpack there, concepts dealing with optionality, iatrogenics, the use of heuristics, barbells, hormesis, and intervention. But it’s beyond the scope of this review to do that for you.

Ultimately, despite Taleb’s distaste for best-of lists, we’re comfortable saying Antifragile is the best book we’ve read so far this year. But no doubt if Taleb ever reads this he’ll tell us we’re a pair of idiots and that we misunderstood the entire thing.