I finally finished Antifragile: Things That Gain From Disorder, by Nassim Taleb, and I devoured every page of it, word for word. It’s been some time I enjoyed diving deep into a book. Hence, would like to really share what I took away from it, and later try to apply the key lessons into my work.
Book 5 starts to help give us some broad heuristics to detect fragility/antifragility in systems. I love how such a simple concept of antifragility finally gives a name to a group of phenomena that we observe and know exists, but seldom had good words for it, and therefore, less aware of how to leverage such opportunities. Antifragility is when inputs and results are nonlinear and asymmetrical; effects compound cumulatively in different ways than a linear manner; how small and having less ‘control’ is actually more antifragile; how the lower the size and concentration, the more antifragile; and understanding variations is more critical to antifragility than the average. I can see many possible application of these rules of thumb. Super eager to apply them in a later post, in business, lifestyle design, relationships, everything!
Sharing them here as reference for myself, and for anyone who might find it useful. This is not a book review, just raw notes lifted directly from the book, with some minor edits, interpretations and categorisations of my own. This is part of my reading list for a new season.
Read past notes:
- (1) Prologue
- (2) Book 1: Intro to antifragility
- (3) Book 2: Antifragility on a systems level and interventionism
- (4) Book 3: Be 90% accountant, 10% rock star - the bimodal strategy of antifragility
- (5) Book 4: Tinker, have options, don’t be axiomatic in business
- (6) Book 4: Education & fragility - How to be an antistudent
- (7) Book 4: Philosophy & fragility - Being ‘right’ is less important than the payoffs
- (8) Book 5: Simple rules to detect fragility/antifragility ?
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Antifragile, Book 5
A simple rule to detect the fragile
Fragility stems from nonlinear effects. Shocks bring higher harm as their intensity increases (up to a certain level). More harm than benefits; an increase in intensity brings more harm than a corresponding decrease offers benefits, therefore asymmetry. Example, dropping a porcelain cup from height of 1 foot is worse than 12x the damage from a drop of 1 inch. When there’s asymmetry like that, there’s fragility.
Cumulative effects
For the fragile, the cumulative effect of small shocks is smaller than the single effect of an equivalent single large shock. For the antifragile, shocks bring more benefits (equivalently, less harm) as their intensity increases (up to a point).
Convexity effect
What curves outward looks like a smile—what curves inward makes a sad face. The convex is antifragile, the concave is fragile. Convex (smile) gains more than it loses when variable x increases, reverse for concave. Eg traffic is concave, 10% more cars makes travel time jump by 50%. The tools and culture of policy makers are often based on the overly linear, ignoring these hidden effects - “second-order effects”.
Small is beautiful (and antifragile)
A squeeze occurs when people have no choice but to do something, and do it right away, regardless of cost, eg needing to get to your destination and having to take an expensive cab ride when train breaks down. Squeezes/bottlenecks are exacerbated by size. When one is large, one becomes vulnerable to some errors, particularly horrendous squeezes. The squeezes become nonlinearly costlier as size increases. Size hurts you at times of stress. It’s not a good idea to be large during difficult times. Economies of scale and mergers only play out in times of stability.
More control doesn’t work on large sized entities
Postmortem usually attribute problems to bad controls by bad capitalistic system, and lack of vigilance on part of the bank/mega-corp. Nor was it greed. The problem is primarily size and the fragility that comes with it.
Why planes don’t arrive early
Travel time cannot be negative, and uncertainty tends to cause delays, making arrival time increase. Or arrival time decrease by just minutes but increase by hours, an obvious asymmetry. This also explains the irreversibility of time, how passage of time is an increase in disorder.
Planning fallacy and underestimation caused by modern fragility
Projects that overrun are often attributed to overly optimistic deadlines, due to cognitive biases. But such underestimation didn’t seem to exists in the past century. It was a much more linear economy, less agency problems, less complexity. Planning fallacy is not a psychological problem or human errors, but inherent to the nonlinear structure of the projects. Cost-benefit analysis tend not to account for nonlinear effects.
Concentration effects lead to fragility
Due to effects of size and concentration, the harm from pollution with 10 different sources is smaller than the equivalent pollution from a single source. Nature-like ancestral mechanisms for regulating concentration effects of consumption: global overconsumption of one resource, e.g. tuna, hurt other animals and mess with ecosystem. But ancestral hunter gatherers exhibit a remarkable lack of concentration in hunting, switching prey often and not as sticky or rigid in habits. Whenever they got low on a resource, they switched to another one, as if to preserve the ecosystem. Their habits incorporated convexity effects.
Importance of variations over average when it comes to fragility
Average temp of 21degC sounds fine, until you hear that the first hour it will be -18degC and second hour 60degC. The notion of average is of no significance when one is fragile to variations—the dispersion of possible thermal outcomes matters more when you’re fragile to variations in temp.