Antifragile: Things That Gain From Disorder by Nassim Nicholas Taleb

Prologue

Some things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventure, risk, and uncertainty.

Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better.

The antifragile loves randomness and uncertainty, which also means—crucially—a love of errors, a certain class of errors. Antifragility has a singular property of allowing us to deal with the unknown, to do things without understanding them—and do them well. Let me be more aggressive: we are largely better at doing than we are at thinking, thanks to antifragility. I’d rather be dumb and antifragile than extremely smart and fragile, any time.

anything that has more upside than downside from random events(or certain shocks) is antifragile; the reverse is fragile.

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.

This is the tragedy of modernity: as with neurotically overprotective parents, those trying to help are often hurting us the most.

The process of discovery(or innovation, or technological progress) itself depends on antifragile tinkering, aggressive risk bearing rather than formal education.

the largest fragilizer of society, and greatest generator of crises, absence of“skin in the game.”

While in the past people of rank or status were those and only those who took risks, who had the downside for their actions, and heroes were those who did so for the sake of others, today the exact reverse is taking place. We are witnessing the rise of a new class of inverse heroes, that is, bureaucrats, bankers, Davos-attending members of the I.A.N.D.(International Association of Name Droppers), and academics with too much power and no real downside and/ or accountability. They game the system while citizens pay the price.

our minds are in the business of turning history into something smooth and linear, which makes us underestimate randomness.

Complex systems are full of interdependencies—hard to detect—and nonlinear responses.“Nonlinear” means that when you double the dose of, say, a medication, or when you double the number of employees in a factory, you don’t get twice the initial effect, but rather a lot more or a lot less.

Antifragility is not just the antidote to the Black Swan; understanding it makes us less intellectually fearful in accepting the role of these events as necessary for history, technology, knowledge, everything.

We have the illusion that the world functions thanks to programmed design, university research, and bureaucratic funding, but there is compelling—very compelling—evidence to show that this is an illusion, the illusion I call lecturing birds how to fly.

Technology is the result of antifragility, exploited by risk-takers in the form of tinkering and trial and error, with nerd-driven design confined to the backstage. Engineers and tinkerers develop things while history books are written by academics;

We have been unconsciously exploiting antifragility in practical life and, consciously, rejecting it—particularly in intellectual life.

In short, the fragilista(medical, economic, social planning) is one who makes you engage in policies and actions, all artificial, in which the benefits are small and visible, and the side effects potentially severe and invisible.

There is the medical fragilista who overintervenes in denying the body’s natural ability to heal and gives you medications with potentially very severe side effects; the policy fragilista(the interventionist social planner) who mistakes the economy for a washing machine that continuously needs fixing(by him) and blows it up; the psychiatric fragilista who medicates children to“improve” their intellectual and emotional life; the soccer-mom fragilista; the financial fragilista who makes people use“risk” models that destroy the banking system(then uses them again); the military fragilista who disturbs complex systems; the predictor fragilista who encourages you to take more risks; and many more.*

we didn’t get where we are today thanks to policy makers—but thanks to the appetite for risks and errors of a certain class of people we need to encourage, protect, and respect.

Yet simplicity has been difficult to implement in modern life because it is against the spirit of a certain brand of people who seek sophistication so they can justify their profession.

Students pay to write essays on topics for which they have to derive knowledge from a library as a self-enhancement exercise; a professional who is compensated to write and is taken seriously by others should use a more potent filter. Only distilled ideas, ones that sit in us for a long time, are acceptable—and those that come from reality.

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

Compromising is condoning. The only modern dictum I follow is one by George Santayana: A man is morally free when … he judges the world, and judges other men, with uncompromising sincerity. This is not just an aim but an obligation.

My experience is that money and transactions purify relations; ideas and abstract matters like“recognition” and“credit” warp them, creating an atmosphere of perpetual rivalry. I grew to find people greedy for credentials nauseating, repulsive, and untrustworthy.

Antifragile

They are capable of detecting the differences between the various nuances of the rainbow, but they do not express these in their vocabularies. These populations are culturally, though not biologically, color-blind.

fiscal deficits have proven to be a prime source of fragility in social and economic 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).

The excess energy released from overreaction to setbacks is what innovates!

It contradicts modern methods and ideas of innovation and progress on many levels, as we tend to think that innovation comes from bureaucratic funding, through planning, or by putting people through a Harvard Business School class by one Highly Decorated Professor of Innovation and Entrepreneurship(who never innovated anything) or hiring a consultant(who never innovated anything).

The world as a whole has never been richer, and it has never been more heavily in debt, living off borrowed money. The record shows that, for society, the richer we become, the harder it gets to live within our means. Abundance is harder for us to handle than scarcity.

If tired after an intercontinental flight, go to the gym for some exertion instead of resting. Also, it is a well-known trick that if you need something urgently done, give the task to the busiest(or second busiest) person in the office. Most humans manage to squander their free time, as free time makes them dysfunctional, lazy, and unmotivated—the busier they get, the more active they are at other tasks. Overcompensation, here again.

And to return to the drivers of innovation: the additional quantities of motivation and willpower, so to speak, stemming from setbacks can be also seen as extra capacity, no different from extra boxes of victuals.

The same can be seen in the Fukushima nuclear reactor, which experienced a catastrophic failure in 2011 when a tsunami struck. It had been built to withstand the worst past historical earthquake, with the builders not imagining much worse—and not thinking that the worst past event had to be a surprise, as it had no precedent. Likewise, the former chairman of the Federal Reserve, Fragilista Doctor Alan Greenspan, in his apology to Congress offered the classic“It never happened before.” Well, nature, unlike Fragilista Greenspan, prepares for what has not happened before, assuming worse harm is possible.*

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.

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.

“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.”

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

Just as in matters of seduction, people lend the most to those who need them the least.

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.

True, while humans self-repair, they eventually wear out(hopefully leaving their genes, books, or some other information behind—another discussion).

Many things such as society, economic activities and markets, and cultural behavior are apparently man-made but grow on their own to reach some kind of self-organization. They may not be strictly biological, but they resemble the biological in that, in a way, they multiply and replicate—think of rumors, ideas, technologies, and businesses.

In the complex world, the notion of“cause” itself is suspect; it is either nearly impossible to detect or not really defined—another reason to ignore newspapers, with their constant supply of causes for things.

I get mellow and lose physical energy when it rains, become more meditative, and tend to write more and more slowly then, with the raindrops hitting the window, what Verlaine called autumnal“sobs”(sanglots). Some days I enter poetic melancholic states, what the Portuguese call saudade or the Turks hüzün(from the Arabic word for sadness). Other days I am more aggressive, have more energy—and will write less, walk more, do other things, argue with researchers, answer emails, draw graphs on blackboards. Should I be turned into a vegetable or a happy imbecile?

If large pharmaceutical companies were able to eliminate the seasons, they would probably do so—for a profit, of course.

My friend Chad Garcia improved his Russian thanks to an involuntary stay in the quarantine section of a hospital in Moscow for an imagined disease. It was a cunning brand of medical kidnapping, as during the mess after the end of the Soviet rule, hospitals were able to extort travelers with forced hospital stays unless they paid large sums of money to have their papers cleared.

This is my term for an aspect of modern life that treats humans as washing machines, with simplified mechanical responses—and a detailed user’s manual. 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.

The fragility of every startup is necessary for the economy to be antifragile, and that’s what makes, among other things, entrepreneurship work: the fragility of individual entrepreneurs and their necessarily high failure rate.

Restaurants are fragile; they compete with each other, but the collective of local restaurants is antifragile for that very reason. Had restaurants been individually robust, hence immortal, the overall business would be either stagnant or weak, and would deliver nothing better than cafeteria food—and I mean Soviet-style cafeteria food. Further, it would be marred with systemic shortages, with, once in a while, a complete crisis and government bailout. All that quality, stability, and reliability are owed to the fragility of the restaurant itself.

So some parts on the inside of a system may be required to be fragile in order to make the system antifragile as a result. Or the organism itself might be fragile, but the information encoded in the genes reproducing it will be antifragile. The point is not trivial, as it is behind the logic of evolution. This applies equally to entrepreneurs and individual scientific researchers.

In fact, the most interesting aspect of evolution is that it only works because of its antifragility; it is in love with stressors, randomness, uncertainty, and disorder—while individual organisms are relatively fragile, the gene pool takes advantage of shocks to enhance its fitness.

If nature ran the economy, it would not continuously bail out its living members to make them live forever. Nor would it have permanent administrations and forecasting departments that try to outsmart the future—it would not let the scam artists of the United States Office of Management and Budget make such mistakes of epistemic arrogance.

For instance, if you drink a poisonous substance in small amounts, the mechanism by which your organism gets better is, according to Danchin, evolutionary within your system, with bad(and weak) proteins in the cells replaced by stronger—and younger—ones and the stronger ones being spared(or some similar operation). When you starve yourself of food, it is the bad proteins that are broken down first and recycled by your own body—a process called autophagy. This is a purely evolutionary process, one that selects and kills the weakest for fitness.

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.

Further, the random element in trial and error is not quite random, if it is carried out rationally, using error as a source of information.

Had the Titanic not had that famous accident, as fatal as it was, we would have kept building larger and larger ocean liners and the next disaster would have been even more tragic. So the people who perished were sacrificed for the greater good; they unarguably saved more lives than were lost.

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.

If every plane crash makes the next one less likely, every bank crash makes the next one more likely. We need to eliminate the second type of error—the one that produces contagion—in our construction of an ideal socioeconomic system.

Leopards, who move like a true symphony of nature, are not instructed by personal trainers on the“proper form” to lift a deer up a tree. Human advice might work with artificial sports, like, say, tennis, bowling, or gun shooting, not with natural movements.

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.

cells within our bodies compete; within the cells, proteins compete, all the way through.

For the economy to be antifragile and undergo what is called evolution, every single individual business must necessarily be fragile, exposed to breaking—evolution needs organisms(or their genes) to die when supplanted by others, in order to achieve improvement, or to avoid reproduction when they are not as fit as someone else. Accordingly, the antifragility of the higher level may require the fragility—and sacrifice—of the lower one. Every time you use a coffeemaker for your morning cappuccino, you are benefiting from the fragility of the coffeemaking entrepreneur who failed. He failed in order to help put the superior merchandise on your kitchen counter.

People go to business school to learn how to do well while ensuring their survival—but what the economy, as a collective, wants them to do is to not survive, rather to take a lot, a lot of imprudent risks themselves and be blinded by the odds.

People have difficulty realizing that the solution is building a system in which nobody’s fall can drag others down—for continuous failures work to preserve the system.

“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.”

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.

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.

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.

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.

this avoidance of small mistakes makes the large ones more severe.

John has one large employer, George many small ones—so he can select the ones that fit him the best and hence has, at any point in time,“more options.” One has the illusion of stability, but is fragile; the other one the illusion of variability, but is robust and even antifragile.

the most stable country in the world does not have a government. And it is not stable in spite of not having a government; it is stable because it does not have one.

Also note that the hideously glitzy scenes one encounters in Switzerland, in all of Geneva, in some parts of Zurich(the center), and particularly in the ski resorts such as Gstaadt and San Moritz are not the direct product of the country nor part of its mission, but the result of its success, as Switzerland acts as a magnet for the ugly rich and tax refugees.

the last major country that is not a nation-state, but rather a collection of small municipalities left to their own devices.

Switzerland is similar to the income of the second brother, stable because of the variations and noise at the local level. Just as the income of the cab driver shows instability on a daily basis but annual stability, likewise Switzerland shows stability at the aggregate level, as the ensemble of cantons produces a solid system.

The way people handle local affairs is vastly different from the way they handle large, abstract public expenditures: we have traditionally lived in small units and tribes and managed rather well in small units.*

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.

The problem is that by creating bureaucracies, we put civil servants in a position to make decisions based on abstract and theoretical matters, with the illusion that they will be making them in a rational, accountable way.

Also consider that lobbyists—this annoying race of lobbyists—cannot exist in a municipality or small region. The Europeans, thanks to the centralization of(some) power with the European Commission in Brussels, are quickly discovering the existence of these mutants coming to manipulate democracy for the sake of some large corporation.

Note another element of Switzerland: it is perhaps the most successful country in history, yet it has traditionally had a very low level of university education compared to the rest of the rich nations. Its system, even in banking during my days, was based on apprenticeship models, nearly vocational rather than the theoretical ones. In other words, on techne(crafts and know how), not episteme(book knowledge, know what).

Mediocristan has a lot of variations, not a single one of which is extreme; Extremistan has few variations, but those that take place are extreme.

Human overintervention to smooth or control processes causes a switch from one kind of system, Mediocristan, into another, Extremistan. This effect applies to all manner of systems with constrained volatility—health, politics, economics, even someone’s mood with and without Prozac. Or the difference between the entrepreneur-driven Silicon Valley(first) and the banking system(second).

it is quite a myth that planning helps corporations: in fact we saw that the world is too random and unpredictable to base a policy on visibility of the future. What survives comes from the interplay of some fitness and environmental conditions.

The northern Levant, roughly today’s northern part of Syria and Lebanon, stayed perhaps the most prosperous province in the history of mankind, over the long, very long stretch of time from the pre-pottery Neolithic until very modern history, the middle of the twentieth century. That’s twelve thousand years—compared to, say, England, which has been prosperous for about five hundred years, or Scandinavia, now only prosperous for less than three hundred years. Few areas on the planet have managed to thrive with so much continuity over any protracted stretch of time, what historians call longue durée. Other cities came and went; Aleppo, Emesa(today Homs), and Laodicea(Lattakia) stayed relatively affluent.

“We people of Aleppo prefer war to prison.” I thought that he meant that they were going to put him in jail, but then I realized that by“prison” he meant the loss of political and economic freedoms.

“It seemed, wrote Machiavelli, that in the midst of murders and civil wars, our republic became stronger [and] its citizens infused with virtues. … A little bit of agitation gives resources to souls and what makes the species prosper isn’t peace, but freedom.”

Clearly neither the Romans nor the Ottomans were allowing local autonomy out of love of freedom on the part of others; they just did it for convenience. A combination of empire(for some affairs) and semi-independent regions(left alone for their own business) provides more stability than the middle: the centralized nation-state with flags and discrete borders.

mediocrity cannot handle more than one enemy, so war here turns into an alliance there. Tension was always present somewhere but without large consequences, like precipitation in the British Isles; mild rain and no floods are vastly more manageable than the opposite: long droughts followed by intense rainfall. In other words, Mediocristan.

Then of course the contagious creation of nation-states in the late nineteenth century led to what we saw with the two world wars and their sequels: more than sixty million(and possibly eighty million) victims. The difference between war and no war became huge, with marked discontinuity.

A collection of statelings is similar to the restaurant business we discussed earlier: volatile, but you never have a generalized restaurant crisis—unlike, say, the banking business. Why? Because it is composed of a lot of independent and competing small units that do not individually threaten the system and make it jump from one state to another. Randomness is distributed rather than concentrated.

never has the world been more prone to more damage; never.* It is hard to explain to naive data-driven people that risk is in the future, not in the past.

Light control works; close control leads to overreaction, sometimes causing the machinery to break into pieces.

When a currency never varies, a slight, very slight move makes people believe that the world is ending.

Indeed, confusing people a little bit is beneficial—it is good for you and good for them. For an application of the point in daily life, imagine someone extremely punctual and predictable who comes home at exactly six o’clock every day for fifteen years. You can use his arrival to set your watch. The fellow will cause his family anxiety if he is barely a few minutes late. Someone with a slightly more volatile—hence unpredictable—schedule, with, say, a half-hour variation, won’t do so.

Variations also act as purges. Small forest fires periodically cleanse the system of the most flammable material, so this does not have the opportunity to accumulate. Systematically preventing forest fires from taking place“to be safe” makes the big one much worse.

A“weak hand” is clearly someone who is fragile but doesn’t know it and is lulled by a false sense of security. When many such weak hands rush to the door, they collectively cause crashes.

When some systems are stuck in a dangerous impasse, randomness and only randomness can unlock them and set them free. You can see here that absence of randomness equals guaranteed death.

Indeed, the longer it takes for the blowup to occur, the worse the resulting harm to both economic and political systems.

Time for American policy makers to understand that the more they intervene in other countries for the sake of stability, the more they bring instability(except for emergency-room-style cases). Or perhaps time to reduce the role of policy makers in policy affairs. One of life’s packages: no stability without volatility.

My definition of modernity is humans’ large-scale domination of the environment, the systematic smoothing of the world’s jaggedness, and the stifling of volatility and stressors.

We are moving into a phase of modernity marked by the lobbyist, the very, very limited liability corporation, the MBA, sucker problems, secularization(or rather reinvention of new sacred values like flags to replace altars), the tax man, fear of the boss, spending the weekend in interesting places and the workweek in a putatively less interesting one, the separation of“work” and“leisure”(though the two would look identical to someone from a wiser era), the retirement plan, argumentative intellectuals who would disagree with this definition of modernity, literal thinking, inductive inference, philosophy of science, the invention of social science, smooth surfaces, and egocentric architects. Violence is transferred from individuals to states.

Remember that you need a name for the color blue when you build a narrative, but not in action—the thinker lacking a word for“blue” is handicapped; not the doer.(I’ve had a hard time conveying to intellectuals the intellectual superiority of practice.)

The famously mistreated Austro-Hungarian doctor Ignaz Semmelweis had observed that more women died giving birth in hospitals than giving birth on the street. He called the establishment doctors a bunch of criminals—which they were: the doctors who kept killing patients could not accept his facts or act on them since he“had no theory” for his observations. Semmelweis entered a state of depression, helpless to stop what he saw as murders, disgusted at the attitude of the establishment. He ended up in an asylum, where he died, ironically, from the same hospital fever he had been warning against.

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

But when you medicate a child for an imagined or invented psychiatric disease, say, ADHD or depression, instead of letting him out of the cage, the long-term harm is largely unaccounted for. Iatrogenics is compounded by the“agency problem” or“principal-agent problem,” which emerges when one party(the agent) has personal interests that are divorced from those of the one using his services(the principal). An agency problem, for instance, is present with the stockbroker and medical doctor, whose ultimate interest is their own checking account, not your financial and medical health, respectively, and who give you advice that is geared to benefit themselves. Or with politicians working on their career.

Incompetence is double-sided.

Uninhibited by their common prejudices, they managed to produce interesting work. I also saw similar irony in trading: a fellow was so upset with his year-end bonus that he started making huge bets with his employer’s portfolio—and ended up making them considerable sums of money, more than if he had tried to do so on purpose.

These attempts to eliminate the business cycle lead to the mother of all fragilities. Just as a little bit of fire here and there gets rid of the flammable material in a forest, a little bit of harm here and there in an economy weeds out the vulnerable firms early enough to allow them to“fail early”(so they can start again) and minimize the long-term damage to the system.

An ethical problem arises when someone is put in charge. Greenspan’s actions were harmful, but even if he knew that, it would have taken a bit of heroic courage to justify inaction in a democracy where the incentive is to always promise a better outcome than the other guy, regardless of the actual, delayed cost.

(Beware what you wish for: small government might in the end be more effective at whatever it needs to do. Reduction in size and scope may make it even more intrusive than large government.)

Here, all I am saying is that we need to avoid being blind to the natural antifragility of systems, their ability to take care of themselves, and fight our tendency to harm and fragilize them by not giving them a chance to do so.

What should we control? As a rule, intervening to limit size(of companies, airports, or sources of pollution), concentration, and speed are beneficial in reducing Black Swan risks.

Motorists need the stressors and tension coming from the feeling of danger to feed their attention and risk controls, rather than some external regulator—fewer pedestrians die jaywalking than using regulated crossings.

Some libertarians use the example of Drachten, a town in the Netherlands, in which a dream experiment was conducted. All street signs were removed. The deregulation led to an increase in safety, confirming the antifragility of attention at work, how it is whetted by a sense of danger and responsibility. As a result, many German and Dutch towns have reduced the number of street signs.

The doctor who refrains from operating on a back(a very expensive surgery), instead giving it a chance to heal itself, will not be rewarded and judged as favorably as the doctor who makes the surgery look indispensable, then brings relief to the patient while exposing him to operating risks, while accruing great financial rewards to himself.

Few understand that procrastination is our natural defense, letting things take care of themselves and exercise their antifragility; it results from some ecological or naturalistic wisdom, and is not always bad—at an existential level, it is my body rebelling against its entrapment. It is my soul fighting the Procrustean bed of modernity.

I write only if I feel like it and only on a subject I feel like writing about—and the reader is no fool.

Few can grasp the logical consequence that, instead, one should lead a life in which procrastination is good, as a naturalistic-risk-based form of decision making.

Compare him to someone imperturbable, with the ability to be calm under fire that is considered necessary to become a leader, military commander, or mafia godfather. Usually unruffled and immune to small information, he can impress you with his self-control in difficult circumstances. For a sample of a composed, calm, and pondered voice, listen to interviews with“Sammy the Bull,” Salvatore Gravano, who was involved in the murder of nineteen people(all competing mobsters). He speaks with minimal effort, as if what he is discussing is“not a big deal.” This second type sometimes reacts when necessary; in the rare situations when he is angry, unlike with the neurotic fellow, everyone knows it and takes it seriously.

Rory Sutherland signaled to me that someone with a personal doctor on staff should be particularly vulnerable to naive interventionism, hence iatrogenics; doctors need to justify their salaries and prove to themselves that they have a modicum of work ethic, something that“doing nothing” doesn’t satisfy.

In business and economic decision making, reliance on data causes severe side effects—data is now plentiful thanks to connectivity, and the proportion of spuriousness in the data increases as one gets more immersed in it. A very rarely discussed property of data: it is toxic in large quantities—even in moderate quantities.

Assume further that for what you are observing, at a yearly frequency, the ratio of signal to noise is about one to one(half noise, half signal)—this means that about half the changes are real improvements or degradations, the other half come from randomness. This ratio is what you get from yearly observations. But if you look at the very same data on a daily basis, the composition would change to 95 percent noise, 5 percent signal. And if you observe data on an hourly basis, as people immersed in the news and market price variations do, the split becomes 99.5 percent noise to 0.5 percent signal.

Newspapers should be of two-line length on some days, two hundred pages on others—in proportion with the intensity of the signal. But of course they want to make money and need to sell us junk food. And junk food is iatrogenic.

Now let’s add the psychological to this: we are not made to understand the point, so we overreact emotionally to noise. The best solution is to only look at very large changes in data or conditions, never at small ones.

Significant signals have a way to reach you.

Thanks to this, we are living more and more in virtual reality, separated from the real world, a little bit more every day while realizing it less and less. Consider that every day, 6,200 persons die in the United States, many of preventable causes. But the media only report the most anecdotal and sensational cases(hurricanes, freak accidents, small plane crashes), giving us a more and more distorted map of real risks. In an ancestral environment, the anecdote, the“interesting,” is information; today, no longer. Likewise, by presenting us with explanations and theories, the media induce an illusion of understanding the world.

It has been very hard for me to explain that the more data you get, the less you know what’s going on, and the more iatrogenics you will cause. People are still under the illusion that“science” means more data.

But often it is the state’s incompetence that can help save us from the grip of statism and modernity—inverse iatrogenics.

France in 1863 did not speak French(only one in five persons could), but rather a variety of languages and dialects(a surprising fact: the Nobel Prize in Literature in 1904 went to the Frenchman Frédéric Mistral, who wrote in Provençal, a language of southern France no longer spoken). The lack of linguistic integration—like the variety in cheese(of which there are about four hundred different types)—expresses the difficulties in centralizing the country. There was nothing ethnic or linguistic to bind the place—it was just the property of a king and a weak aristocracy. Roads were horrible and most of the country was inaccessible to travelers. Tax collection was a dangerous profession, requiring tenacity and sagacity. Indeed, the country was progressively“discovered” by Paris, in many cases after its colonies in North Africa and elsewhere.

Paris itself was barely controlled by France—no more than the Rio slums called favelas are currently ruled by the Brazilian central state.

As with a crumbling sand pile, it would be unintelligent to attribute the collapse of a fragile bridge to the last truck that crossed it, and even more foolish to try to predict in advance which truck might bring it down. Yet it is done all too often.

“why did we build something so fragile to these types of events?” Not seeing a tsunami or an economic event coming is excusable; building something fragile to them is not.

the more intelligent(and practical) action is to make the world greed-proof, or even hopefully make society benefit from the greed and other perceived defects of the human race.

What is nonmeasurable and nonpredictable will remain nonmeasurable and nonpredictable, no matter how many PhDs with Russian and Indian names you put on the job—and no matter how much hate mail I get. There is, in the Black Swan zone, a limit to knowledge that can never be reached, no matter how sophisticated statistical and risk management science ever gets.

He used the following method to detouristify his traveling: he tried to inject some randomness into his schedule by never deciding on the next destination until he had spent some time in the first one, driving his travel agent crazy—when he was in Zagreb, his next destination would be determined by his state of mind while in Zagreb. Largely, it was the smell of places that drew him to them; smell cannot be conveyed in a catalogue.

Nero learned that no matter how satisfied they could be with their work, these hotshots-who-depended-on-words were deprived of Tony’s serenity; they remained fragile to the emotional toll from the compliments they did not get, the ones others got, and from what someone of lower intellect stole from them.

A man is honorable in proportion to the personal risks he takes for his opinion—in other words, the amount of downside he is exposed to. To sum him up, Nero believed in erudition, aesthetics, and risk taking—little else.

Fat Tony did not believe in predictions. But he made big bucks predicting that some people—the predictors—would go bust.

Isn’t that paradoxical? At conferences, Nero used to meet physicists from the Santa Fe Institute who believed in predictions and used fancy prediction models while their business ventures based on predictions did not do that well—while Fat Tony, who did not believe in predictions, got rich from prediction.

Success brings an asymmetry: you now have a lot more to lose than to gain. You are hence fragile.

My idea of the modern Stoic sage is someone who transforms fear into prudence, pain into information, mistakes into initiation, and desire into undertaking.

Seneca also provides us a catalogue of social deeds: invest in good actions. Things can be taken away from us—not good deeds and acts of virtue.

“The bookkeeping of benefits is simple: it is all expenditure; if any one returns it, that is clear gain(my emphasis); if he does not return it, it is not lost, I gave it for the sake of giving.” Moral bookkeeping, but bookkeeping nevertheless.

What matters is the route taken, the order of events, not just the destination—what scientists call a path-dependent property. Path dependence can be illustrated as follows: your experience in getting a kidney stone operation first and anesthesia later is different from having the procedures done in the opposite sequence. Or your enjoyment of a meal with coffee and dessert first and tomato soup last would not be the same as the inverse order.

In other words, if something is fragile, its risk of breaking makes anything you do to improve it or make it“efficient” inconsequential unless you first reduce that risk of breaking. As Publilius Syrus wrote, nothing can be done both hastily and safely—almost nothing.

As to growth in GDP(gross domestic product), it can be obtained very easily by loading future generations with debt—and the future economy may collapse upon the need to repay such debt. GDP growth, like cholesterol, seems to be a Procrustean bed reduction that has been used to game systems. So just as, for a plane that has a high risk of crashing, the notion of“speed” is irrelevant, since we know it may not get to its destination, economic growth with fragilities is not to be called growth, something that has not yet been understood by governments.

growth was very modest, less than 1 percent per head, throughout the golden years surrounding the Industrial Revolution, the period that propelled Europe into domination. But as low as it was, it was robust growth—unlike the current fools’ race of states shooting for growth like teenage drivers infatuated with speed.

American writers, on the other hand, tend to become members of the media or academics, which makes them prisoners of a system and corrupts their writing, and, in the case of research academics, makes them live under continuous anxiety, pressures, and indeed, severe bastardization of the soul. Every line you write under someone else’s standards, like prostitution, kills a corresponding segment deep inside.

Georges Simenon, one of the most prolific writers of the twentieth century, only wrote sixty days a year, with three hundred days spent“doing nothing.” He published more than two hundred novels.

In social policy, it consists in protecting the very weak and letting the strong do their job, rather than helping the middle class to consolidate its privileges, thus blocking evolution and bringing all manner of economic problems that tend to hurt the poor the most.

Before the United Kingdom became a bureaucratic state, it was barbelled into adventurers(both economically and physically) and an aristocracy. The aristocracy didn’t really have a major role except to help keep some sense of caution while the adventurers roamed the planet in search of trading opportunities, or stayed home and tinkered with machinery.

More barbells. Do crazy things(break furniture once in a while), like the Greeks during the later stages of a drinking symposium, and stay“rational” in larger decisions. Trashy gossip magazines and classics or sophisticated works; never middlebrow stuff. Talk to either undergraduate students, cab drivers, and gardeners or the highest caliber scholars; never to middling-but-career-conscious academics. If you dislike someone, leave him alone or eliminate him; don’t attack him verbally.*

So just as Stoicism is the domestication, not the elimination, of emotions, so is the barbell a domestication, not the elimination, of uncertainty.

So let us call here the teleological fallacy the illusion that you know exactly where you are going, and that you knew exactly where you were going in the past, and that others have succeeded in the past by knowing where they were going.

The rational flâneur is someone who, unlike a tourist, makes a decision at every step to revise his schedule, so he can imbibe things based on new information, what Nero was trying to practice in his travels, often guided by his sense of smell. The flâneur is not a prisoner of a plan. Tourism, actual or figurative, is imbued with the teleological illusion; it assumes completeness of vision and gets one locked into a hard-to-revise program, while the flâneur continuously—and, what is crucial, rationally—modifies his targets as he acquires information.

Now a warning: the opportunism of the flâneur is great in life and business—but not in personal life and matters that involve others. The opposite of opportunism in human relations is loyalty, a noble sentiment—but one that needs to be invested in the right places, that is, in human relations and moral commitments.

Never ask people what they want, or where they want to go, or where they think they should go, or, worse, what they think they will desire tomorrow. The strength of the computer entrepreneur Steve Jobs was precisely in distrusting market research and focus groups—those based on asking people what they want—and following his own imagination. His modus was that people don’t know what they want until you provide them with it.

Like Britain in the Industrial Revolution, America’s asset is, simply, risk taking and the use of optionality, this remarkable ability to engage in rational forms of trial and error, with no comparative shame in failing, starting again, and repeating failure. In modern Japan, by contrast, shame comes with failure, which causes people to hide risks under the rug, financial or nuclear, making small benefits while sitting on dynamite, an attitude that strangely contrasts with their traditional respect for fallen heroes and the so-called nobility of failure.

Thales, by funding his own philosophy, became his own Maecenas, perhaps the highest rank one can attain: being both independent and intellectually productive.

Beyond books, consider this simple heuristic: your work and ideas, whether in politics, the arts, or other domains, are antifragile if, instead of having one hundred percent of the people finding your mission acceptable or mildly commendable, you are better off having a high percentage of people disliking you and your message(even intensely), combined with a low percentage of extremely loyal and enthusiastic supporters. Options like dispersion of outcomes and don’t care about the average too much.

No one at present dares to state the obvious: growth in society may not come from raising the average the Asian way, but from increasing the number of people in the“tails,” that small, very small number of risk takers crazy enough to have ideas of their own, those endowed with that very rare ability called imagination, that rarer quality called courage, and who make things happen.

The fragile has no option. But the antifragile needs to select what’s best—the best option.

The implication is nontrivial. For if you think that education causes wealth, rather than being a result of wealth, or that intelligent actions and discoveries are the result of intelligent ideas, you will be in for a surprise.

Just taking something to market requires struggling against a collection of naysayers, administrators, empty suits, formalists, mountains of details that invite you to drown, and one’s own discouraged mood on occasion. In other words, to identify the option(again, there is this option blindness). This is where all you need is the wisdom to realize what you have on your hands.

For there is a category of things that we can call half-invented, and taking the half-invented into the invented is often the real breakthrough. Sometimes you need a visionary to figure out what to do with a discovery, a vision that he and only he can have. For instance, take the computer mouse, or what is called the graphical interface: it took Steve Jobs to put it on your desk, then laptop—only he had a vision of the dialectic between images and humans—later adding sounds to a trilectic. The things, as they say, that are“staring at us.”

hence a straightforward and practical testing heuristic: the simpler and more obvious the discovery, the less equipped we are to figure it out by complicated methods. The key is that the significant can only be revealed through practice. How many of these simple, trivially simple heuristics are currently looking and laughing at us?

both governments and universities have done very, very little for innovation and discovery, precisely because, in addition to their blinding rationalism, they look for the complicated, the lurid, the newsworthy, the narrated, the scientistic, and the grandiose, rarely for the wheel on the suitcase. Simplicity, I realized, does not lead to laurels.

The historian David Wooton relates a gap of two centuries between the discovery of germs and the acceptance of germs as a cause of disease, a delay of thirty years between the germ theory of putrefaction and the development of antisepsis, and a delay of sixty years between antisepsis and drug therapy.

Now, as a skeptical empiricist, I do not consider that resisting new technology is necessarily irrational: waiting for time to operate its testing might be a valid approach if one holds that we have an incomplete picture of things. This is what naturalistic risk management is about. However, it is downright irrational if one holds on to an old technology that is not naturalistic at all yet visibly harmful, or when the switch to a new technology(like the wheel on the suitcase) is obviously free of possible side effects that did not exist with the previous one.

One needs to be intelligent in recognizing the favorable outcome and knowing what to discard.

If you are looking for your misplaced wallet in your living room, in a trial and error mode, you exercise rationality by not looking in the same place twice. In many pursuits, every trial, every failure provides additional information, each more valuable than the previous one—if you know what does not work, or where the wallet is not located. With every trial one gets closer to something, assuming an environment in which one knows exactly what one is looking for. We can, from the trial that fails to deliver, figure out progressively where to go.

I met him and shared ideas with him: his investors(like mine at the time, as I was still involved in that business) were for the most part not programmed to understand that for a treasure hunter, a“bad” quarter(meaning expenses of searching but no finds) was not indicative of distress, as it would be with a steady cash flow business like that of a dentist or prostitute. By some mental domain dependence, people can spend money on, say, office furniture and not call it a“loss,” rather an investment, but would treat cost of search as“loss.”

He realized that some things need to break for the system to improve—what is labeled creative destruction—a notion developed, among so many other ones, by the philosopher Karl Marx and a concept discovered, we will show in Chapter 17, by Nietzsche. But a reading of Schumpeter shows that he did not think in terms of uncertainty and opacity; he was completely smoked by interventionism, under the illusion that governments could innovate by fiat, something that we will contradict in a few pages.

As per the Yiddish saying:“If the student is smart, the teacher takes the credit.” These illusions of contribution result largely from confirmation fallacies: in addition to the sad fact that history belongs to those who can write about it(whether winners or losers), a second bias appears, as those who write the accounts can deliver confirmatory facts(what has worked) but not a complete picture of what has worked and what has failed.

And of course iatrogenics is never part of the discourse. They never tell you if education hurt you in some places.

A dictator—just like a government—will feel indispensable because the alternative is not easily visible, or is hidden by special interest groups. The Federal Reserve Bank of the United States, for instance, can wreak havoc on the economy yet feel convinced of its effectiveness. People are scared of the alternative.

Whenever an economic crisis occurs, greed is pointed to as the cause, which leaves us with the impression that if we could go to the root of greed and extract it from life, crises would be eliminated. Further, we tend to believe that greed is new, since these wild economic crises are new. This is an epiphenomenon: greed is much older than systemic fragility. It existed as far back as the eye can go into history.

Someone standing today looking at events without having lived them would be inclined to develop illusions of causality, mostly from being mixed-up by the sequence of events. In real life, in spite of all the biases, we do not have the same number of asynchronies that appear to the student of history. Nasty history, full of lies, full of biases!

We are suckers for the sophisticated.

Serious empirical investigation(largely thanks to one Lant Pritchet, then a World Bank economist) shows no evidence that raising the general level of education raises income at the level of a country. But we know the opposite is true, that wealth leads to the rise of education—not an optical illusion.

Wealth and Economic Growth → Education

(parties are great for optionality).

Education has benefits aside from stabilizing family incomes. Education makes individuals more polished dinner partners, for instance, something non-negligible. But the idea of educating people to improve the economy is rather novel.

aim for education other than the one we have today: raising values, making good citizens, and“learning,” not economic growth

Likewise, in ancient times, learning was for learning’s sake, to make someone a good person, worth talking to, not to increase the stock of gold in the city’s heavily guarded coffers.

(something psychologists call the halo effect, the mistake of thinking that skills in, say, skiing translate unfailingly into skills in managing a pottery workshop or a bank department, or that a good chess player would be a good strategist in real life).*

Entrepreneurs are selected to be just doers, not thinkers, and doers do, they don’t talk, and it would be unfair, wrong, and downright insulting to measure them in the talk department.

Evolution does not rely on narratives, humans do. Evolution does not need a word for the color blue.

“Good speculative bets come to you, you don’t get them by just staying focused on the news.”

People with too much smoke and complicated tricks and methods in their brains start missing elementary, very elementary things. Persons in the real world can’t afford to miss these things; otherwise they crash the plane. Unlike researchers, they were selected for survival, not complications. So I saw the less is more in action: the more studies, the less obvious elementary but fundamental things become; activity, on the other hand, strips things to their simplest possible model.

Rubinstein refuses to claim that his knowledge of theoretical matters can be translated—by him—into anything directly practical. To him, economics is like a fable—a fable writer is there to stimulate ideas, indirectly inspire practice perhaps, but certainly not to direct or determine practice. Theory should stay independent from practice and vice versa—and we should not extract academic economists from their campuses and put them in positions of decision making. Economics is not a science and should not be there to advise policy.

Sometimes, even when an economic theory makes sense, its application cannot be imposed from a model, in a top-down manner, so one needs the organic self-driven trial and error to get us to it.

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.

It is a way—the only way—to domesticate uncertainty, to work rationally without understanding the future, while reliance on narratives is the exact opposite: one is domesticated by uncertainty, and ironically set back. You cannot look at the future by naive projection of the past.

intellect is associated with fragility and instills methods that conflict with tinkering.

religious stories might have no value as narratives, but they may get you to do something convex and antifragile you otherwise would not do, like mitigate risks. English parents controlled children with the false narrative that if they didn’t behave or eat their dinner, Boney(Napoleon Bonaparte) or some wild animal might come and take them away. Religions often use the equivalent method to help adults get out of trouble, or avoid debt. But intellectuals tend to believe their own b*** t and take their ideas too literally, and that is vastly dangerous.

An idea does not survive because it is better than the competition, but rather because the person who holds it has survived! Accordingly, wisdom you learn from your grandmother should be vastly superior(empirically, hence scientifically) to what you get from a class in business school(and, of course, considerably cheaper). My sadness is that we have been moving farther and farther away from grandmothers.

classroom education does not lead to wealth as much as it comes from wealth(an epiphenomenon).

antifragile risk taking—not education and formal, organized research—is largely responsible for innovation and growth, while the story is dressed up by textbook writers. It does not mean that theories and research play no role; it is that just as we are fooled by randomness, so we are fooled into overestimating the role of good-sounding ideas.

Because of a spate of biases, historians are prone to epiphenomena and other illusions of cause and effect.

Nobody worries that a child ignorant of the various theorems of aerodynamics and incapable of solving an equation of motion would be unable to ride a bicycle. So why didn’t he transfer the point from one domain to another?

picked up through natural selection, survivorship, apprenticeship to experienced practitioners, and one’s own experience. Traders trade → traders figure out techniques and products → academic economists find formulas and claim traders are using them → new traders believe academics → blowups(from theory-induced fragility)

Practitioners don’t write; they do. Birds fly and those who lecture them are the ones who write their story. So it is easy to see that history is truly written by losers with time on their hands and a protected academic position.

architects(or what were then called Masters of Works) relied on heuristics, empirical methods, and tools, and almost nobody knew any mathematics—according to the medieval science historian Guy Beaujouan, before the thirteenth century no more than five persons in the whole of Europe knew how to perform a division. No theorem, shmeorem. But builders could figure out the resistance of materials without the equations we have today—buildings that are, for the most part, still standing.

generations of collective tinkering resulting in the evolution of recipes. These food recipes are embedded in cultures. Cooking schools are entirely apprenticeship based.

Even medicine today remains an apprenticeship model with some theoretical science in the background, but made to look entirely like science.

Phase Two, the Internet. It had been set up as a resilient military communication network device, developed by a research unit of the Department of Defense called DARPA and got a boost the days when Ronald Reagan was obsessed with the Soviets. It was meant to allow the United States to survive a generalized military attack. Great idea, but add the personal computer plus Internet and we get social networks, broken marriages, a rise in nerdiness, the ability for a post-Soviet person with social difficulties to find a matching spouse. All that thanks to initial U.S. tax dollars(or rather budget deficit) during Reagan’s anti-Soviet crusade.

For a long time I had on the wall of my study the following quote by Jacques Le Goff, the great French medievalist, who believes that the Renaissance came out of independent humanists, not professional scholars. He examined the striking contrast in period paintings, drawings, and renditions that compare medieval university members and humanists:

As to the hobbyist in general, evidence shows him(along with the hungry adventurer and the private investor) to be at the source of the Industrial Revolution. Kealey, who we mentioned was not a historian and, thankfully, not an economist, in The Economic Laws of Scientific Research questions the conventional“linear model”(that is, the belief that academic science leads to technology)—for him, universities prospered as a consequence of national wealth, not the other way around. He even went further and claimed that like naive interventions, these had iatrogenics that provided a negative contribution. He showed that in countries in which the government intervened by funding research with tax money, private investment decreased and moved away. For instance, in Japan, the almighty MITI(Ministry for Technology and Investment) has a horrible record of investment. I am not using his ideas to prop up a political program against science funding, only to debunk causal arrows in the discovery of important things.

Kealey presents a convincing—very convincing—argument that the steam engine emerged from preexisting technology and was created by uneducated, often isolated men who applied practical common sense and intuition to address the mechanical problems that beset them, and whose solutions would yield obvious economic reward.

By some vicious turn of events, governments have gotten huge payoffs from research, but not as intended—just consider the Internet.

But the interesting constant is that when a result is initially discovered by an academic researcher, he is likely to disregard the consequences because it is not what he wanted to find—an academic has a script to follow. So, to put it in option terms, he does not exercise his option in spite of its value, a strict violation of rationality(no matter how you define rationality), like someone who both is greedy and does not pick up a large sum of money found in his garden.

studying the chemical composition of ingredients will make you neither a better cook nor a more expert taster—it might even make you worse at both.(Cooking is particularly humbling for teleology-driven fellows.)

Collaboration has explosive upside, what is mathematically called a superadditive function, i.e., one plus one equals more than two, and one plus one plus one equals much, much more than three. That is pure nonlinearity with explosive benefits—we will get into details on how it benefits from the philosopher’s stone. Crucially, this is an argument for unpredictability and Black Swan effects: since you cannot forecast collaborations and cannot direct them, you cannot see where the world is going. All you can do is create an environment that facilitates these collaborations, and lay the foundation for prosperity. And, no, you cannot centralize innovations, we tried that in Russia.

For one the invisible hand is the market, for the other it is God. It has been difficult for people to understand that, historically, skepticism has been mostly skepticism of expert knowledge rather than skepticism about abstract entities like God, and that all the great skeptics have been largely either religious or, at least, pro-religion(that is, in favor of others being religious).

For an illustration of business drift, rational and opportunistic business drift, take the following. Coca-Cola began as a pharmaceutical product. Tiffany & Co., the fancy jewelry store company, started life as a stationery store. The last two examples are close, perhaps, but consider next: Raytheon, which made the first missile guidance system, was a refrigerator maker(one of the founders was no other than Vannevar Bush, who conceived the teleological linear model of science we saw earlier; go figure). Now, worse: Nokia, who used to be the top mobile phone maker, began as a paper mill(at some stage they were into rubber shoes). DuPont, now famous for Teflon nonstick cooking pans, Corian countertops, and the durable fabric Kevlar, actually started out as an explosives company. Avon, the cosmetics company, started out in door-to-door book sales. And, the strangest of all, Oneida Silversmiths was a community religious cult but for regulatory reasons they needed to use as cover a joint stock company.

When engaging in tinkering, you incur a lot of small losses, then once in a while you find something rather significant. Such methodology will show nasty attributes when seen from the outside—it hides its qualities, not its defects. In the antifragile case(of positive asymmetries, positive Black Swan businesses), such as trial and error, the sample track record will tend to underestimate the long-term average; it will hide the qualities, not the defects.

about anyone who studied conventional statistics without getting very deep into the subject(just to theorize in social science or teach students) will get the turkey problem wrong. I have a simple rule, that those who teach at Harvard should be expected to have much less understanding of things than cab drivers or people innocent of canned methods of inference(it is a heuristic, it can be wrong, but it works; it came to my attention as the Harvard Business School used to include Fragilista Robert C. Merton on its staff).

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.

Our misunderstanding of convex tinkering, antifragility, and how to tame randomness is woven into our institutions—though not consciously and explicitly.

Seeing the nontransferability of skills from one domain to the other led me to skepticism in general about whatever skills are acquired in a classroom, anything in a non-ecological way, as compared to street fights and real-life situations.

It is not well advertised that there is no evidence that abilities in chess lead to better reasoning off the chessboard—even those who play blind chess games with an entire cohort can’t remember things outside the board better than a regular person.

soccer moms try to eliminate the trial and error, the antifragility, from children’s lives, move them away from the ecological and transform them into nerds working on preexisting(soccer-mom-compatible) maps of reality. Good students, but nerds—that is, they are like computers except slower. Further, they are now totally untrained to handle ambiguity.

Provided we have the right type of rigor, we need randomness, mess, adventures, uncertainty, self-discovery, near-traumatic episodes, all these things that make life worth living, compared to the structured, fake, and ineffective life of an empty-suit CEO with a preset schedule and an alarm clock. Even their leisure is subjected to a clock, squash between four and five, as their life is sandwiched between appointments. It is as if the mission of modernity was to squeeze every drop of variability and randomness out of life—with(as we saw in Chapter 5) the ironic result of making the world a lot more unpredictable, as if the goddesses of chance wanted to have the last word.

“We do not study for life, but only for the lecture room,”

When I was about ten I realized that good grades weren’t as good outside school as they were in it, as they carried some side effects.

People who build their strength using these modern expensive gym machines can lift extremely large weights, show great numbers and develop impressive-looking muscles, but fail to lift a stone; they get completely hammered in a street fight by someone trained in more disorderly settings. Their strength is extremely domain-specific and their domain doesn’t exist outside of ludic—extremely organized—constructs. In fact their strength, as with over-specialized athletes, is the result of a deformity.

I was rather a barbell autodidact as I studied the exact minimum necessary to pass any exam, overshooting accidentally once in a while, and only getting in trouble a few times by undershooting. But I read voraciously, wholesale, initially in the humanities, later in mathematics and science, and now in history—outside a curriculum, away from the gym machine so to speak.

So the number of pages absorbed could grow faster than otherwise. And you find gold, so to speak, effortlessly, just as in rational but undirected trial-and-error-based research. It is exactly like options, trial and error, not getting stuck, bifurcating when necessary but keeping a sense of broad freedom and opportunism. Trial and error is freedom.

“much of what other people know isn’t worth knowing.”

But there is something central in following one’s own direction in the selection of readings: what I was given to study in school I have forgotten; what I decided to read on my own, I still remember.

“What is not intelligible to me is not necessarily unintelligent” is perhaps the most potent sentence in all of Nietzsche’s century—and we used a version of it in the prologue, in the very definition of the fragilista who mistakes what he does not understand for nonsense.

For Tony, the distinction in life isn’t True or False, but rather sucker or nonsucker. Things are always simpler with him. In real life, as we saw with the ideas of Seneca and the bets of Thales, exposure is more important than knowledge; decision effects supersede logic. Textbook“knowledge” misses a dimension, the hidden asymmetry of benefits—just like the notion of average. The need to focus on the payoff from your actions instead of studying the structure of the world(or understanding the“True” and the“False”) has been largely missed in intellectual history.

The payoff, what happens to you(the benefits or harm from it), is always the most important thing, not the event itself.

And the problem is deeply ingrained in standard reactions; the predictors’ reply when we point out their failures has typically been“we need better computation” in order to predict the event better and figure out the probabilities, instead of the vastly more effective“modify your exposure” and learn to get out of trouble, something religions and traditional heuristics have been better at enforcing than naive and cosmetic science.

Harvard is like a Vuitton bag or a Cartier watch. It is a huge drag on the middle-class parents who have been plowing an increased share of their savings into these institutions, transferring their money to administrators, real estate developers, professors, and other agents. In the United States, we have a buildup of student loans that automatically transfer to these rent extractors. In a way it is no different from racketeering: one needs a decent university“name” to get ahead in life; but we know that collectively society doesn’t appear to advance with organized education.

For the fragile, shocks bring higher harm as their intensity increases(up to a certain level).

The example is shown in Figure 9. Let us generalize. Your car is fragile. If you drive it into the wall at 50 miles per hour, it would cause more damage than if you drove it into the same wall ten times at 5 mph. The harm at 50 mph is more than ten times the harm at 5 mph.

Lifting one hundred pounds once brings more benefits than lifting fifty pounds twice, and certainly a lot more than lifting one pound a hundred times. Benefits here are in weight-lifter terms: strengthening the body, muscle mass, and bar-fight looks rather than resistance and the ability to run a marathon.

Now, to see the effect of fragility from size, look at Figure 15 showing losses as a function of quantity sold. A fire sale of $ 70 billion worth of stocks leads to a loss of $ 6 billion. But a fire sale a tenth of the size, $ 7 billion would result in no loss at all, as markets would absorb the quantities without panic, maybe without even noticing. So this tells us that if, instead of having one very large bank, with Monsieur Kerviel as a rogue trader, we had ten smaller banks, each with a proportional Monsieur Micro-Kerviel, and each conducted his rogue trading independently and at random times, the total losses for the ten banks would be close to nothing.

Someone unfamiliar with the business who naively optimizes the size of the place(Heathrow airport, for example) might miss the idea that smooth functioning at regular times is different from the rough functioning at times of stress.

evidence of such bias, called overconfidence. Decision scientists and business

The obvious is usually missed here: the Crystal Palace project did not use computers, and the parts were built not far from the source, with a small number of businesses involved in the supply chain. Further, there were no business schools at the time to teach something called“project management” and increase overconfidence. There were no consulting firms. The agency problem(which we defined as the divergence between the interest of the agent and that of his client) was not significant. In other words, it was a much more linear economy—less complex—than today.

Black Swan effects are necessarily increasing, as a result of complexity, interdependence between parts, globalization, and the beastly thing called“efficiency” that makes people now sail too close to the wind. Add to that consultants and business schools. One problem somewhere can halt the entire project—so the projects tend to get as weak as the weakest link in their chain(an acute negative convexity effect). The world is getting less and less predictable, and we rely more and more on technologies that have errors and interactions that are harder to estimate, let alone predict.

This concentration is harmful. Extreme consumption of, say, tuna, can hurt other animals, mess with the ecosystem, and lead species to extinction. And not only does the harm scale nonlinearly, but the shortages lead to disproportional rises in prices.

Jennifer Dunne, a complexity researcher who studies hunter-gatherers, examined evidence about the behavior of the Aleuts, a North American native tribe, for which we have ample data, covering five millennia. They exhibit a remarkable lack of concentration in their predatorial behavior, with a strategy of prey switching. They were not as sticky and rigid as us in their habits. Whenever they got low on a resource, they switched to another one, as if to preserve the ecosystem. So they understood convexity effects—or, rather, their habits did.

The information that the average temperature is seventy degrees Fahrenheit does not simplify the situation for your grandmother. It is information squeezed into a Procrustean bed—and these are necessarily committed by scientific modelers, since a model is by its very nature a simplification. You just don’t want the simplification to distort the situation to the point of being harmful.

90,000 cars for an hour, then 110,000 cars for the next one, for an average of 100,000, and traffic will be horrendous. On the other hand, assume we have 100,000 cars for two hours, and traffic will be smooth and time in traffic short.

The hidden benefit of antifragility is that you can guess worse than random and still end up outperforming. Here lies the power of optionality—your function of something is very convex, so you can be wrong and still do fine—the more uncertainty, the better. This explains my statement that you can be dumb and antifragile and still do very well.

Michelangelo was asked by the pope about the secret of his genius, particularly how he carved the statue of David, largely considered the masterpiece of all masterpieces. His answer was:“It’s simple. I just remove everything that is not David.”

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