ANTIFRAGILE

How can the world deal with the highly improbable, high-impact “black swan” events that philosopher Nassim Nicholas Taleb described in his bestseller The Black Swan? The answer comes in Taleb’s new book, Antifragile, a complex, learned, irreverent, mind-bending masterwork that just may have the longevity of the works of his favorite ancient philosophers.

Traditionally, Taleb writes, the world is divided into elements that are fragile — that will be weakened or harmed by volatility, disorder and stress — and elements that are robust — those elements that can resist such volatility and stress. According to Taleb, no such dichotomy exists — at least not, as he explains, for “what is living and organic (or complex), say, the human body, and what is inert, say, a physical object like the stapler on your desk.”

Instead, items can be classified under a triad of designations: Fragile, Robust and Antifragile. The difference between robustness and antifragility is surprisingly simple: Something robust resists “volatility, randomness, disorder and stressors” and stays the same, he writes. A robust house does not crumble because of an earthquake. Something antifragile, on the other hand, actually becomes better and stronger as a result of volatility and stressors. Taleb shows how nature is antifragile with a simple example: If you trim a tree, it grows back bigger and stronger branches. Cutting the branches helps.

The evolution of the planet and its living organisms is itself a case of antifragility. As the planet undergoes stresses, it adapts and improves. The weakest of a species eventually disappear, leading to a stronger, less fragile species. “Even when there is extinction of an entire species after some extreme event, no big deal, it is part of the game,” Taleb writes. “This is still evolution at work, as those species that survive are fittest and take over from the lost dinosaurs — evolution is not about a species, but at the service of the whole of nature.”

At the Service of the Whole

While nature benefits from volatility, shocks and extreme events, that doesn’t make the dinosaurs any happier, and therein lies one of the challenges of antifragility. As Taleb explains, “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,” he writes. “So the people who perished were sacrificed for the greater good; they unarguably saved more lives than were lost.”

Antifragility does not mean that only good things happen as a result of stress or shock; it does mean that the overall benefit or gain of the event outweighs its negative impact. The sinking of the Titanic was indeed a disaster but, in the long run, as Taleb noted above, it saved more lives than it lost. “The story of the Titanic illustrates the difference between gains for the system and harm to some of its individual parts,” he writes. Ships are fragile, but transatlantic shipping is antifragile.

Making Things Worse

The antifragile has in the past gone completely unnoticed. As a result, those who would fix the problems of the world, writes Taleb, have concentrated on making the fragile more robust. Unfortunately, these “fragilistas,” as he calls them, operate with no appreciation or awareness of the random unpredictable black swan events and in complete ignorance of the realization of the vital positive role that volatility and stressors play. Fragilistas are further handicapped by the fact that they misinterpret the past and, based on erroneous thinking, try to predict the unpredictable. For example, consider the 18th-century doctors of George Washington who tried to treat his illness through bloodletting, thus in fact hastening his death. In this and other cases, the fragilistas are making things more fragile. Much of Taleb’s work describes the myriad reasons for the failure of the fragilistas — and the impact of such failure.

So how should we proceed? Taleb recommends the barbell strategy, which can be described as a strategy of maximum riskiness and maximum safety at the same time, “without the corruption of the middle.” As Taleb writes, “antifragility is the combination of aggressiveness plus paranoia — clip your downside, protect yourself from extreme harm, and let the upside, the positive Black Swans, take care of itself.”