Antifragile: Things That Gain from Disorder

I begin for readers who have not read anything else by this author, especially those who are familiar with his ideas only second-hand. His second book, Fooled by Randomness, is by far the easiest introduction to his ideas. It is relatively short and illustrates his ideas in dramatic and amusing stories. For people with technical backgrounds, the first book, Dynamic Hedging, makes the points in a much more restricted domain (managing risk of financial options) which allows more precision. The Bed of Procrustes is striking and insightful, but as it is a series of loosely connected aphorisms, the reader has to sort out the links for herself.

Taleb’s third and most commercially successful book, The Black Swan, and this one (which may become his most successful), lay out his ideas in more breadth and depth. The three in the first paragraph are relatively non-controversial. They are critical mainly of people who are safe to ridicule, those who are blind to the uncertainty in the universe in fields that are ruled by randomness, such as finance. The Black Swan and Antifragile attack–in the most intemperate language–people, ideas and professions accustomed to reflexive worship. The attacks are vigorous and directed at the core beliefs that underpin large areas of modern life.

These latter two books are more difficult to read. They are long, and their complex ideas are interwoven in overlapping essays rather than dissected in textbook order. Every page contains outrageous contentions that few readers will accept in full. You can skate on the surface taking the books as pure iconoclasm, amusing and provocative but ultimately specious. They’re actually valuable taken in that spirit, but they are far deeper and more important than that.

The Black Swan concentrates on the case that long-term outcomes are dominated by events that are individually highly improbable, and also that are inherently unpredictable–Black Swans. Many people have interpreted “inherently unpredictable” as “hard to predict,” and set to work on techniques to predict Black Swans. That misses the point. The events only have their impact BECAUSE they were not predicted. If someone invented a Black Swan prediction system, all it would do is make different highly improbable events into the Black Swans.

A common criticism of The Black Swan is that it tears opposing ideas down without giving any positive advice about what to do. That is, if long-term outcomes are dominated by Black Swans, why do anything at all except wait around and hope the unpredictable, improbable events are good for you rather than bad? In fact, there is quite a bit of sound advice in The Black Swan (see the short review by David Aldous at [...] for the best and most balanced summary of the claims) but the advice is about avoiding predictable disaster caused by unpredictable events, and keeping yourself open to positive outcomes from improbable events.

Antifragile complements The Black Swan by celebrating systems that gain from disorder, trading away short-term predictability and micro-rationality for long-term success exploiting macro-unpredictability. It’s a bold attitude, amply supported by argument and example from many fields. If anything, it is more outrageous and iconoclastic than The Black Swan. It is Taleb’s most important book to date, as it closes the circle. On one level, the universe (at least as perceived by humans) is ruled by disorder, but on another level, the crucial elements are those that gain from disorder as eventually these are fitter for survival than any element, however strong, that requires order.

If you have read any of Taleb’s other books, I suggest Antifragile is the best next one to read. If you have not read any, I suggest starting with either Fooled by Randomness or if you have a technical background, Dynamic Hedging; then moving on to Antifragile. However, it is certainly possible to read Antifragile with no prior preparation. Eventually, everyone should read all of his books (or all of his thinking, most of which is available free at his website). But if you have to pick only one, Antifragile is the best choice.

I picked up “Antifragile” at Logan Airport in Boston on my way to Greece for a little R & R. I work as a Hospitalist in Gloucester, MA and my 12-hour days don’t give much time for outside reading, so I use these getaways to juice what I call my “Airport Education”.

I first must warn the reader that this book is not an easy read. Some criticize Taleb for his lack of editing. I had no problems with the editing but the ideas presented sometimes approached the limits of my intelligence, which I consider a good thing.

As a practicing physician I am not really qualified to criticize or endorse his economic concepts although they seem to make sense. I view him more as a modern philosopher and I find his ideas very attractive and thought provoking. I think he is one of the more profound thinkers of our time.

When it comes to his views on medicine, I am very qualified to comment after spending almost 40 years in the medical trenches. What I find surprising is that despite coming from totally different directions, we seem to have ended up in the same place. His view that you should stay away from physicians unless you are seriously ill reflects my experience. Interventional treatments for people who are not seriously ill often do more harm than good. That’s one reason I left primary care to work in an acute care setting. Most people who are a little sick simply do not benefit much from additive treatments like medications or many elective surgeries. Over the long run, such treatments often increase a person’s fragility.

Subtractive treatments such as lifestyle changes or removing toxic elements from your diet tend to be much more effective at improving your health, leaving you much more antifragile in the long run.

To summarize Taleb’s beliefs when it comes to health:

1. Intermittent fasting and starvation are good stressors that improve health and prolong life.

2. Additive therapies such as medications should only be used when a person is seriously ill. If you are only a little ill, subtractive therapies such as removing sugar, HFCS and grains from your diet makes more much more sense because this approach respects our evolutionary history.

3. The only beverages he drinks are water, coffee and red wine. This mimics my preferences. I also sometimes slip in a few shots of ouzo, especially when in Greece.

4. He believes that aerobic exercise is for fools. He does extreme weight lifting, interval training and long, slow walks. In my view this reflects the most research on exercise.

5. He follows the Greek Orthodox calendar to guide his eating and to provide variety in composition, timing and quantity of food. Our ancient ancestors did the same but not out of choice–they had to eat whatever was available to them and this was certainly not on a set schedule. I am also Greek Orthodox and do the same.

6. The only fruits he eats are those he recognized from when he was growing up in Lebanon. They tend to be small and sour rather than large and sweet like our modern fruits.

7. He rarely eats breakfast.

8. He believes that excess fructose is a chronic toxin.

In a nutshell, after years of medical training and 40 years of clinical practice, this is basically what I advise my patients to do because this approach seems to be much more effective than the interventionist approach championed by mainstream medicine. I’ve had the advantage of time to see how various approaches play out over the long run.

To be honest with you, I think Taleb could put on a white coat, throw a stethoscope around his neck and outperform most physicians when it comes to improving patient’s health and quality of life, excluding of course trauma and acute serious illnesses. Yes, this is a compliment to Taleb but it is also a condemnation of our current state of affairs in medicine.

Primary care physicians are paid zippo for preventing diabetes but insurance companies do pay for “managing” diabetes once you get the disease. According to this logic, primary care physicians should have donuts in their waiting rooms! His views on exercise also mirror the latest research showing that the benefits of exercise follow a convex curve–those who don’t exercise and those who do a lot of intense aerobic exercise are likely shortening their lives. Those who do moderate exercise–say slow, random walking tend to extend their lifespan.

I know that the focus of his book is economics, yet I believe that his views on health are likely to have a much greater impact on people’s lives. After all, if you lose your health, all the money in the world isn’t really worth that much.

I highly recommend this book to anyone who wants to challenge their brain and improve their health.

How could one give anything less than five stars to a book so filled with insight and erudition? If you have read Taleb’s other philosophy books, Fooled by Randomness, The Black Swan and The Bed of Procrustes, and sought out the recordings of his rare media appearances (I recommend the EconTalk podcast interviews) you are no doubt anticipating this book as highly as I was.

Although the concept around which the book is based — antifragility, the property of gaining from disorder and uncertainty — is freshly named, it is, as Taleb has said, just another way of looking at his one big idea of “convexity”. Graph the observed relationship between any two related variables that affect your life. In a world where most effects are non-linear — ex. double the medicine dose does not make you twice as well — you can be on the favorable side of the curve or the unfavorable side. If The Black Swan was all about taking ‘tail risk’ into account — focusing on just the tail of the curve — Antifragile is about the entire curve, and how to find shelter under the bend of it where randomness, chaos, unpredictable events, time, stressors and errors strengthen you instead of destroy you.

Taleb has divided Antifragile into six sub-books which apply this idea across a number of domains. In biology, the mechanics of evolution provide a way to continue life despite massive environmental shocks. In medicine, the concept of hormesis, whereby some substance that is harmful in a large amount is beneficial in a small amount, and the “via negativa”, subtractive remedies that remove harmful substances have a better upside than additive remedies, prescriptions of new drugs, which can have rare but fatal side-effects, both demonstrate antifragile qualities. In finance, picking options which are long vega or long gamma. In health, the way bones strengthen with impacts and the way healthy bones reduces the hallmarks of aging. In ethics, systems where people have no ‘skin in the game’ are extremely fragile, those where they have “soul” in the game are antifragile. In politics, nation-states are fragile, decentralized city states (like the Swiss cantons) are anti-fragile.

The sub-books, of course, are divided much more organically, and can be sampled in any order. Although Taleb plans to soon release all his philosophical writings and technical papers as one large book, The Incerto, which can also be sampled in any order, I do not believe random sampling is the optimal way to understand his work. I think a reader with no knowledge of Taleb’s ideas should begin either with Fooled by Randomness or The Black Swan, which assume less familiarity with the concepts, and create the building blocks of the larger idea of antifragility.

Knowing how Taleb feels about Platonism, with all due respect I believe there is a better form of Antifragile that could have been published. The book, compared to his others, contains more awkward phrasing and narrative leaps. The introduction refers off-handedly to Fat Tony, a character from his other books, with no contextualizing for new readers. There is nothing that threw me for long, but I’ve read his previous books multiple times, and have been closely following the development of this one.

Taleb has said he refuses to be edited. This is a mistake. His writing is antifragile to critiques and reformulation. Not that he doesn’t submit it to some shocks. He does put out drafts of his chapters online, and has cultivated a salon of erudites on his facebook page, which provided him some excellent insights in the book.

With as many insights and fascinating detours into the history of science and philosophy as this book contains, any infelicities of phrase can be easily overlooked. Antifragile, in its comprehensive exploration of Taleb’s ‘big idea’, makes his previous ones seem like appendices. The second edition of The Black Swan ended with an essay “On Robustness and Fragility”. With this book, Taleb moves beyond being robust and resilient into a third realm, the anti-fragile. While it may not enjoy the same initial mass popularity as his previous books, I suspect Antifragile will endure longer, given the power of its ideas.

Summary Thoughts

1. He doesn’t like academic/unaccountable government policy. Who does?
2. He bridges an important gap between Chaos Theory and Behavioral Finance.
3. He’s transitioning from market practitioner to philosopher. Tough sell.

Content Highlights

1. “I’d rather be dumb and antifragile than extremely smart and fragile” (pg 4) Wall St “smart” is changing
2. “anything that has more upside than downside from random events is antifragile; the reverse is fragile (pg 5)
3. “This is the tragedy of modernity… those trying to help are often hurting us the most (pg 5) #agreed
4. ” I.A.N.D (International Association of Name Droppers)” (pg 6) #funny
5. “academics with too much power and no real downside and/or accountability” (pg 6) #yep
6. “Less is more and usually more effective”, cites Steve Jobs (pg 11); good advice, #practice it
7. “only practitioners (or people who do things) tend to spontaneously get to the point” (pg 13)
8. “Table 1: The Central Triad (3 Types of Exposures” (pgs 24-27) very #thoughtful/concise on Behavioral Econ
9. “We are all… similarly handicapped, unable to recognize the same idea…” (pg 39) good pt on #context #bias
10. “Abundance is harder for us to handle than scarcity” (pg 42)

11. “Equilibrium, Not Again” (pg 60) solid complexity theory (Stuart Kaufman) reference vs #Keynesians
12. “Leopards… are not instructed by personal trainers on the “proper form” to lift a deer up a tree” (pg 73) #true
13. “you learn from the errors of others…” (pg 73), #important lessons, especially on Wall St
14. “National Entrepreneur Day” (pg 79) #Obama, please read
15. “what is made to fly will not do well on the ground… volatility comes from volare, “to fly” in Latin” (pg 81)
16. “Nature loves small errors… humans don’t.” (pg 85) #evolve
17. “those experiencing a brand of variations called chaos can be stabilized by adding randomness to them” (pg 103)
18. “For a theory is a very dangerous thing to have… Theories are superfragile.” (pg 116) #awesome quotes
19. “Men feel good less intensely than bad.” (pg 155) good quote by Livy in the context of #Seneca’s thoughts
20. “Seneca’s Barbell” (pg 161) #important pg to read related to your #Cash position and #Drawdown risk

21. “An agent does not move except out of intention for an end.” (pg 169) #quote from St Thomas Aquinas
22. “Convex Tinkering” (pg 182) makes an #excellent risk mgt pt on asymmetry with a picture
23. “Life is long Gamma” (pg 184) would love to hear the anti-free market #answer to that
24. “Risk taking ain’t gambling, and optionality ain’t lottery tickets” (pg 185) this ain’t Kansas, and I ain’t Toto
25. “Few want to jeopardize their jobs and reputation for the sake of change” (pg 192) #truth
26. “Evolution does not rely on narratives, humans do” (pg 207) #money quote
27. Table 4: “The difference between teleological and optionality” (pg 214) good thinkers framework
28. Chapter 15 = “History Written by the Losers” #rant
29. “The difference between humans and animals lies in the ability to collaborate” (pg 233), bingo #collaboration
30. “Nokia … began as a paper mill” (pg 235), #re-learn, find a way to win

31. “Trial and error is freedom.” (pg 246) #RiskMgt101
32. “You are taking the joy of ignorance out of out of the things we don’t understand” (pg 253) Fat Tony to Socrates
33. “What is not intelligible to me is not necessarily unintelligent” (pg 256) #Nietzsche
34. “It would be like prostitutes listening to technical commentary by nuns” (pg 264) Bernanke, comments?
35. “Smile! A better way to understand convexity and concavity” (pg 272) #pics summarize hundreds of pages
36. “Squeezes are exacerbated by size” (pg 279) think #HedgeFundBubble, Short Interest, etc.
37. “If you have favorable asymmetries, or positive convexity… in the long run you will do reasonably well” (pg 300)
38. “Innovation is saying no to 1,000 things.” (pg 305) quotes Steve #Jobs again
39. “we are moving into the far more uneven distribution of 99/1 across many things that used to be 80/20″ (pg 306)
40. “absence of literary culture is actually a marker of future blindness” (pg 314) on some #techies vs the classics

41. “Medicine, Convexity, and Opacity” (pg 337), you can skip this chapter unless you like to rip on doctors
42. “mention of the fragilista journalists Friedman or Krugman can lead to explosive bouts of anger” (pg 362) #lol
43. Chapter 23 = “Skin In The Game” (pg 375) 1st three pages and Table 7 of this chapter #excellent
44. “a person is only as respectable … as the downside he is willing to face for the sake of others” (pg 376) #skin
45. “you can’t feel insulted by a dog” (pg 380) #woof
46. “in traditional societies even those who fail have a higher status than those who are not exposed” (pg 383)
47. “Isn’t this unethical?” (pg 413) crushes Princeton’s Alan #Blinder for his conflicts of interest as an academic
48. “Everything gains or losses from volatility. Fragility is what loses from volatility and uncertainty” (pg 421) #conclusion
49. “Prometheus is long disorder; Epimetheus is short disorder” (pg 422) #conclusion
50. “living things are long volatility. The best way to verify that you are alive is by checking if you like variations” (pg 423)

Buy the book. A must read as we continue to narrow the gap between Chaos Theory and Behavioral Finance.
KM

I have to declare at the outset that this is the first book to excite me in a long time and it still excites me now that I have completed reading it.

Taleb begins with a relatively simple proposition, that there are some things that actually gain from discorder. In itself that would hardly seem like a remarkable statement but consider that most of us are active participants in a game where conformity rules and the crabs pull back those who attemp to escape from the bucket.

I read mainly academic books, written in academic prose, following the steps, joinging up the dots, so this book was a severe jolt to my system. It takes you by the seat of the pants and throws you around like a waltzer in a fairground. No disrespect to the author but sometimes I felt like I was reading to a narrator who wrote like Groucho Marx speaks. You are experiency an intellectual maelstrom where the central ideas are enveloped in examples and histories from across the world which swirl around constantly to bring the point into clear focus.

Fortunately you need no expertise in non-linear dynamics and complexity theories to understand Taleb’s points as he uses tools on a variety of levels to bring the points home.

The book is certainly provocative and will make uncomfortable reading for those in established positions in politics, corporations, economics and business schools, should they choose to read it. It is original in that it turns on it’s head much of what is accepted behaviour in the modern world and pushes the reader through a gestalt switch into seeing the world in a new light.

Infuriating? The breakneck speed with which the reader engages the book reminds me of the scene in 2001 where the astronaught is propelled through the star gate. As he moves forward everything is changing around him and he is awestruck by the carnival of lights until he finds himself in a somewhat recognisable room but still changes come. Essentially what I am saying is that there is so much a reader can take at any time and the book is a Pandora’s Box, a treasure trove of ideas that it is very hard to absorb all of them as you read.

Perhaps Mr. Taleb will authorise a Reader’s Digest version.

I encourage everyone to read this book and have their perception of life changed. As for myself, as soon as I have met my committments with the items on my Vine list, I shall read it again.

A remarkable book that deserves a wider audience.

People forget to mention the most important aspect of the book: It’s fun to read! Yes, the tone can be harsh, even ruthless. Don’t get offended by Taleb’s tone. A fraud is a fraud and Taleb calls it that. Ruthlessness is just the expression of moral outrage. So, enjoy the read. It’s fun. You will have a fabulous time.