Concept of the Year 2017: Antifragility
Each year, I want to nominate a single concept or idea that influenced my thinking or behavior the most during that year: a Concept of the Year. This blog started in 2019, but I was doing this mentally for a couple of years prior. I’d like to use this platform as a venue to explore these ideas more fully and describe how we might utilize them in the Real World.
What is Antifragility?
The concept is defined in Taleb’s book first by contrasting it with one everyone knows well: fragility. An object is fragile if it is easily broken, or more precisely, if it is likely to break in the presence of unexpected shocks. The typical example is a wine glass, which is fine while it sits isolated on a flat surface, but in the presence of movement (wind, careless children, etc.) can be knocked over and will immediately break. When you move a wine glass around the room you have to be very careful, because any sudden change to its environment introduces a risk.
What’s the opposite of fragility? Most people say that something that is not fragile is instead robust, meaning that it is hard to break. An example is a child’s sippy cup, which is designed to take a beating because young children tend to throw things uncarefully around. A child can drop, throw, or otherwise abuse their cup and no harm comes to it, because it is impervious to sudden or unexpected shocks to the system; it is robust. There is of course a spectrum between fragile and robust; a wine glass is more fragile than a glass mug is more fragile than a sippy cup is more fragile than a stone.
Taleb points out that robust is not the opposite of fragile; the spectrum continues further. When the sippy cup is dropped, it is not damaged, but it is also not improved; it just stays the same. The oppose of fragile, Taleb says, would be something that actually gets better when it is dropped or bumped. There is no accepted word for this, so Taleb coined the term antifragile for things that benefit from unexpected shocks.
A simple concept, to be sure. But is anything really antifragile? Yes! A few examples:
Muscles are antifragile. When we lift heavy things, or run long distances, or otherwise exert ourselves, the muscles not only do not shatter or break, but they actively improve; they become stronger as a result of exertion. Astronauts, in space away from the pull of Earth’s gravity, have to work out several hours a day to keep their muscles from atrophying. From NASA: “Studies have shown that astronauts experience up to a 20 percent loss of muscle mass on spaceflights lasting five to 11 days.”
Our immune systems are antifragile. Exposure to invasive germs leads to the production of antibodies which specifically target those pathogens in our body. Children who are exposed to a variety of pathogens will have stronger immune systems in adulthood than those who do not, due to the fact that the immune system “memorizes” which bacteria it has fought off before.
Another example is a thriving foodie community with many competing restaurants; the failure of one means the success of another. This game is not zero-sum, but rather positive-sum, because the surviving restaurant has to work to be the best, and can learn from the failure of the others. Taleb writes:
Restaurants are fragile; they compete with each other, but the collective of local restaurants is anti-fragile 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.
When something is fragile, the best situation for it is a safe, isolated space without surprise shocks, which is why we store wine glasses carefully in the kitchen cabinet. When something is robust, its environment mostly doesn’t matter; a stone is robust against almost any outside influence, and so doesn’t care where it sits. When something is antifragile, the best situation is a place with many surprises and unexpected changes; it is actively bad for an antifragile thing to be kept safe and isolated! Taleb puts it rather poetically:
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.
It’s also important that antifragility has limits. At the gym, your muscles gain from exertion, but if you overdo it, they really do get damaged. Your immune system can be strengthened through exposure to new pathogens, but if you drink poison or eat tainted food you will still get sick or die. So there’s a balance to be struck here. Nonetheless, I believe Taleb has identified a truly valuable insight hiding in plain sight.
Antifragility in the Real World
So antifragility is real. But we all already knew to exercise to get stronger, and to let bad restaurants fail. Can we learn anything truly new from Taleb’s concept? Does it contain new wisdom we can carry into our lives in the Real World?
Taleb gives a few novel practical examples. For example, he argues that a good stock portfolio is antifragile, advocating a Barbell Strategy. In this approach, you put most of your investment money (something like 90%, but tastes may vary) in very safe investments, because you should not put yourself in a position to lose what you need to survive. But the rest of your money (something like 10%) is put into very risky investments, which are likely to fail but which have a huge payoff if they succeed. Most of the time you’ll lose that 10%, but the small probability of a very large reward means that your expected gain may be very high. Such an approach is antifragile because you are set up to win big as a result of the chaos and uncertainty of the market.
A caveat: I’m pretty sure Taleb is not advocating spending 10% of your investment money on lottery tickets. “But they have a small chance of a large payoff!!” Yes, but the goal isn’t to maximize your risk. Like everything else in life, you have to make tradeoffs and do your best to optimize your expected gain.
…but actually, it’s more subtle than that. “Put your money where it is expected to give the highest return on investment” is not the stunning new wisdom we learn from Antifragile. Taleb says instead, rather than counting on your ability to optimize your expected gain, put yourself in a position to benefit when you’re wrong. This is why buying a lottery ticket remains a bad idea, precisely because you can do the math and calculate your expected gain pretty precisely. On the other hand, putting some money into a moonshot tech startup is different: you can try to do the calculation of expected gains, but the world of investments and startups and technology is very complex, such that it’s impossible to know what might hit big by some “random” or chaotic whim of the system. If you invest $500 that you can afford to lose, then ok, the most you can lose is $500 and you very likely lose it. But on the off-chance that it becomes the next Lyft or whatever, you make bank. You don’t expect this to happen; you just open yourself to the massive gains that become available when you are wrong. In a way, being antifragile means betting on your own ignorance.
What about those of us that are poor and don’t invest in the stock market? What lessons do we learn?
Taleb’s book pushes very strongly the idea of “tinkering”, as opposed to detailed top-down planning. Make many small choices, update constantly as new information comes in, throw away what doesn’t work and keep what does. Most of all, keep your options open. You will take many small losses as you explore what is possible, but if you’re paying attention you will do better with each iteration. Taleb takes this extremely seriously, bemoaning the fragility of a business executive in favor of the antifragile optionality possessed by a cab driver. While it’s counterintuitive, I take his point: the business executive suffers from unexpected shocks in their system, whereas the cab driver thrives. A thorough plan can become the worst game in town if it is overly rigid. (By the way, this is, I think, how natural selection works; Nature explores many options and lets what doesn’t work die, keeping only the fittest organisms around. If it works for the universe, it works for me!)
A further huge aspect of Antifragile is the defense of redundancy. When you are trying to optimize something (or Literally Everything), redundancy is the enemy because it appears to represent wasted resources. But when (1) the system is sufficiently complex that your estimated failure probability might be wrong, or (2) a total failure is very catastrophic, you should build many overlapping failsafes into the system. (Think of a nuclear power plant, whose failure is rare but extremely horrific.) Optimization, to Taleb, is fragile, whereas redundancy can be robust or antifragile, because the latter potentially builds the inescapable facts of uncertainty and ignorance into the system.
Taken as positive life advice, the defense of redundancy is an argument for diversity of investment, of time, money, or any other valuable resource. Never put all your money in one financial investment; similarly, never spend all your time and effort on a single person or activity. If all you enjoy is playing football, then if you break your leg you’re miserably bored. If you abandon all of your friends to hang out with your new girlfriend, then if you break up you’re totally alone. If you schedule your whole life down to the minute, then when a great opportunity arises you can’t take advantage. Instead, keep your time / effort / financial assets liquid; make many small bets and be open to rapid change.
Finally, for me personally I think antifragility gives benefits when I open myself to new experiences. Antifragility in my experience is connected to serendipity, through an openness to discovering unplanned fortunate events. Some examples of my own:
It sounds trivial, but when someone offers me a bite of their food, I almost always take it; if I don’t like it, I say “thanks” and go back to my meal, but if it is good then I learn something useful. The cost is almost zero, relative to the possible gain.
Similarly, every few years I re-try foods that I think I don’t like. I don’t like olives (tried again last month), but tastes change with time and if I learn to like them someday, then that’s a new experience I get to enjoy. Again, this represents almost zero cost (e.g. eating a disgusting olive once a year or so), but a possible large gain. I recently started liking mustard! Wow, thanks Nassim!
When someone invites me to a party or social gathering, if I don’t have other plans I try to go. That is, I go while always maintaining an exit strategy. Getting stuck at a party that is no fun, is no fun; that’s a situation in which my enjoyment is fragile. But going and finding out it’s no fun is fine if I can leave, because if it is fun or if I meet someone very interesting, then the whole thing becomes worth it. The latter only needs to happen a handful of times to make this strategy worth it as a whole; I’ve met some really great people at events that I would not have thought to go to.
When I visit a new city, I tend to spend a lot of time just wandering. I go to restaurants or coffee shops I don’t know, or visit parks or monuments I’ve never heard of. Often, these places are boring and I leave, but sometimes they are wonderful. I’ve wandered my way to events and festivities I couldn’t have known were there if I had planned my day out from beginning to end.
This is not a book review of Antifragile; there are many more interesting ideas there, and I recommend reading it if you are interested. But I think that reading the book has pushed me a bit in the direction of more tinkering and serendipity, and a greater openness to making many small and varied bets in life (sometimes on my own ignorance). These are changes I needed and which have improved my life. For these reasons, Antifragility wins Concept of the Year 2017.