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Books

Antifragile by Nassim Nicholas Taleb

Eleni Panagiotarakou benefits from Nassim Nicholas Taleb’s attack on the follies of over-cautiousness.

Antifragile: Things That Gain from Disorder (2012), alongside Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets (2005) and The Black Swan: The Impact of the Highly Improbable (2007) completes Nassim Nicholas Taleb’s trilogy on disorder. Whereas Fooled by Randomness focused on our underestimation of chance, and The Black Swan on rare events and our failure to predict them, the focus of Antifragile is on things that gain from the ‘disorder cluster’, which includes elements such as randomness, volatility, uncertainty, disturbances, and stressors – in other words, antifragile things are things that positively benefit from being subject to a little chaos.

One of Taleb’s starting arguments here is the idea that we live in a world which, due to its complexity, not only we do not understand, but could not possibly hope to understand. Rather than despair at this truth, Taleb proposes that we accept, love, and learn to thrive in it: amor fati. This sentiment is captured in the Prologue, ‘How to Love the Wind’, where one reads the rousing poetic call: “Wind extinguishes a candle and energizes fire. Likewise with randomness, uncertainty, chaos: you want to use them, not hide from them. You want to be the fire and wish for the wind.” (p.3). This demand for the revaluation of the randomness of life is based on his classification of things into three categories: Fragile, Robust and Antifragile. Fragile is what is harmed by exposure to disturbances; robust is what remains the same; and antifragile (a neologism), as mentioned, is what benefits from an exposure to disruption. The legendary Damocles, who dined with a sword over his head hanging by a single thread of hair, represents the ultimate fragile figure – any minute could have meant his death. The mythological Phoenix, who was reborn from his ashes, is depicted as a robust figure, remaining the same through each cataclysm. Hydra, the many-headed serpent who grew two heads to replace every one that was cut off by Hercules, is seen as the ultimate antifragile creature, gaining strength with each blow. Organic systems are seen by Taleb as inherently antifragile. Subject bones to (limited) strain and they become stronger; deprive bones from all stress and they become fragile. This is the principle of hormesis: even if they’re harmful in large doses, small doses of stressors stimulate an organism to increase its resistance. By contrast, artificial, man-made systems are seen as inherently fragile.

According to Taleb, one of the follies of modernity is the deliberate repression of disruption in natural and non-natural systems alike. The policy of wildfire suppression is invoked as an example in the case of natural systems. Until recently, all wildfires were considered destructive to forest ecology and were quickly extinguished. The folly of this policy is becoming more apparent with the publication of new ecological studies documenting the previously-unknown beneficial effects of small wildfires for fire-adapted species. In the absence of frequent, small, beneficial fires, that have been prevented by human beings, flammable materials accumulate on the forest floor, paving the way for the rare but ultimately inevitable large fires, which are catastrophic. In other words, extinguishing naturally-occurring small fires in a system which has evolved symbiotic relationships with small fires over the span of millennia is not good stewardship: it is humanity under the influence of modern arrogance dressed up as reason.

Taleb’s arguments in such seemingly disparate areas as banking, education, medicine, nutrition and politics (to mention but a few) are best understood within his overall critique of modern rationalising, and by implication, of the Enlightenment. (To be sure, if we were to classify ways of thinking, modern reasoning would be assigned to the ‘fragile’ category, Medieval European in the ‘robust’, and Ancient Mediterranean thinking in the ‘antifragile’ category.) As we know, in embracing the authority of reason, the Enlightenment rejected the authority of tradition. This is anathema for Taleb because not only does he reject the Enlightenment premise that the world is knowable (much less malleable according to human desires), he is also sympathetic to ancestral traditions and religions on account of their useful heuristics [rules of thumb] and social codes – heuristics and social codes, one should add, that often elude our understanding. An example of this validation of the enigmatic is found in the section ‘Via Negativa’. After disparaging three-times-a-day meal regimes, Taleb points out that recent medical studies hailing the beneficial effects of caloric restriction and intermittent fasting for longevity and protection against diseases, are validating ancient religious fasting interdicts (p.361). Taleb’s fondness for complex ancestral heuristics mirrors that of Michael Oakeshott, for whom, as Taleb says, traditions “provide an aggregation of filtered collective knowledge” (p.258).

Ironically, Taleb’s caustic critique of the Enlightenment with its over-focus on rationalism, traces its source back to the ancient figure of Socrates. I write ‘ironically’ because Taleb holds a deep reverence for ancient Mediterranean thinkers. Nonetheless, Taleb invokes Nietzsche’s acerbic attack on (Plato’s) Socrates in The Birth of Tragedy (1872), where Nietzsche makes the accusation that Socrates disrupted the delicate balance between the rational, self-restrained, intellectual ‘Apollonian’ forces and the irrational, chaotic, passionate ‘Dionysian’ forces that characterized Hellenic culture (pp.249-256). The ensuing ascendency of the Apollonian spirit saw its zenith in the Enlightenment during the seventeenth and eighteenth centuries in Europe.

The Complacency of Rationalism

One of Nietzsche’s projects was the recuperation of the Dionysian spirit. This also appears to be one of the unstated objectives of Antifragile. I am not suggesting that Taleb is rejecting rationalism – quite the contrary. His discourse on nonlinearity and the principles of convexity (pp.263-300), along with the Appendix (pp.435-480), which contains enough graphs and technical discussions to trigger an anxiety attack in a mathphobe, is imbued with the Apollonian qualities of razor-sharp concision and rigorous analysis. If the book reads in a non-boring, enjoyable fashion, the reader should not be fooled into thinking that this is a simple, shallow, unrational book; Taleb makes Herculean efforts to communicate clearly otherwise complex theories. Rather, what he rejects here is ‘naïve rationalism’ – namely, the idea that everything is understandable, and so controllable, by our limited minds. This same naïve rationalism, which holds that our world is understandable and hence manipulable, has led to “large-scale domination of the environment, the systemic smoothing of the world’s jaggedness, and the stifling of volatility and stressors” (p.108) – which is neither good nor desirable. As mentioned, in the case of natural systems the suppression of small wildfires leads eventually to destructive infernos. In the area of international relations, support for despotic, unstable regimes in the Middle East equally provides only short-term stability. When the inevitable revolutions finally take place, they’re marked by a high degree of violence, as the unfolding events in Syria now demonstrate. Likewise, in the banking sector, support for near-collapsing, near-insolvent banks eventually leads to blow-ups. Higher degrees of suppression of instability result in higher degrees of disturbance later. The lesson is that imposing stability for stability’s sake often only worsens a complex situation. Instead, long-term stability in complex systems is best attained via frequent, small-scale volatility. In the world of finance and corporations, the message is that bigger is not necessarily better or, as Taleb puts it, “Size makes you fragile.” The same argument is applied to the realm of political governance, where Taleb (who identifies himself as a ‘deontic libertarian’) argues for smaller-scale, decentralized government. The model of ancient city-states is seen as superior to that of modern nation-states. Behemoth states like the former USSR are seen as something to be avoided, not emulated. Their top-down models are seen as devoid of the “hunger for trial and error” from which the tinkering with and improving of complex systems stems (p.226).

The Wrath of Taleb

Taleb offers numerous suggestions for making our world a less fragile place. He argues that ‘less is more’: that, instead of introducing ‘thousands of pages of regulation’ to institutions, we should instead be adapting basic anti-fragile principles and concepts. One such concept is the so-called ‘skin in the game’ – an expression alleged to have been coined by Warren Buffett to refer to a situation where executives use their own resources to buy stock in the company they’re administering. Such involved interest leads to greater levels of responsibility. Moreover, Taleb calls the absence of skin in the game the ‘largest fragilizer’ for our society, due to the ever-increasingly-opaque environment in which players operate. He argues that we have reached a point in history where people in power exert control over situations where they can, and do, bring great harm to others while they escape unscathed themselves – or worse, derive benefits from the chaos. Culprits include armchair warmongering journalists or politicians with no relatives in war zones, bureaucrats, CEOs, and bankers. Bankers, who privatize their gains but socialize their losses by transferring the downside to shareholders and/or taxpayers, are singled out to receive the bulk of Taleb’s ethical wrath. Prompted, as it were, by his Socratic daimonion, this flâneur, himself a former financial trader, argues that the asymmetric nature of bonuses – consisting of incentives for success “without a corresponding disincentive for failure” – results in the build-up of hidden risks in the financial system which eventually leads to catastrophes. Bonuses “invite bankers to play the system by hiding the risks of rare and hard-to-predict but consequential blow-ups.” The 2007 meltdown of the subprime mortgage market in the United States, which in turn caused the global financial crisis, is given as an example of such a blow-up. Turning his gaze to the wisdom of the ancients, Taleb finds the antidote in Babylonian and Roman practices and laws that demanded accountability. For example, the Romans used to oblige engineers to sleep underneath their newly-built bridges – a rather good accountability strategy, according to this author.

Taleb’s ethical cri de coeur against bankers and others with no skin in the game culminates in his ‘Naming Names’ section, where we see him verbally lashing prominent politicians, academics, and economists. He labels many of these figures ‘Fragilistas’, due to their tendency to fragilize our society by “depriving variability-loving systems of variability” through their naïve rationalism (p.427). But public figures are not the only ones on the receiving end of his scolding. Neurotically overprotective parents (‘soccer moms’) are likewise castigated for sucking volatility and so challenge out of their children’s lives (pp.242-243). Prison-like structured schedules for children, and medication for some modern paediatric disorders such as ADHD, often administered in complicity with doctors and teachers, are cited as examples of damaging Procrustean-like actions depriving children of exposure to risk, and so the chance to grow.

Taleb’s prose is discursive and flows in a clear and pleasing manner. Taleb also offers his readers plenty of nuggets of wisdom gained from Mother Nature, empirical science, and his own life experiences as an ex-trader. Lin Yutang once wrote: “The wise man reads both books and life itself.” Antifragile is a product of such wise reading.

Eleni Panagiotarakou is an Assistant Professor at Concordia University, Montreal, where she teaches Political Theory.

• Antifragile: Things That Gain from Disorder, by Nassim Nicholas Taleb, Random House, 2012, 560 pages, $33.00, ISBN: 978-1846141560.