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Antifragile

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by Nassim Nicholas Taleb

The sub-title, “Things that gain from disorder” clarifies the meaning of the title.

The author claims that almost everyone says the opposite of fragile is something like robust or resilient. Whereas fragile things are harmed by disorder, robust things are unaffected by disorder. There wasn’t a word for things that benefit from disorder, so he coined the word “antifragile”. Much of the book is giving examples of things that are antifragile and exploring the concept.

The previous book in this series was Black Swan, the author’s term for an extreme event so rare you can’t predict it. For example, a catastrophic flood many feet above the 100-year flood line would be a Black Swan. (In other words: an unpredictable rare event of large consequence)

An antifragile position is the antidote to Black Swan events. Fragile things are destroyed by Black Swans, and robust things are at best unchanged by the event but are often found to actually be fragile to an event of that magnitude—but antifragile things benefit from the event. The more extreme the event, the greater the benefit.

Things aren’t antifragile in general, but with respect only to certain kinds of unpredictability. For example, a large change in the financial markets could payoff for a person in an antifragile financial position, but they could come home to find their home destroyed in a flood because their home was in a fragile position.

Efforts to maintain stability can end up causing the harmful events they are trying to avoid even worse than they would have been in the first place. Sticking with the flood example, governments build levees and dams which help citizens avoid the effects of yearly floods but then more stuff is built in the areas that are now not flooding every year. When the Black Swan flood comes the damage is greater. Someone in a fragile position needs to predict these unpredictable events to avoid breaking. Because the events are unpredictable, their efforts are vain. In an antifragile position, one benefits from not having to do any prediction at all. Black Swan events are like Christmas day because of the huge gains they bring.

What is an example of an antifragile position? The author gives us one taken from Aristotle’s Politics. Thales, a philosopher, was often given a hard time by people who believed that philosophers were merely noisy people incapable of effective action. To prove them wrong he prepaid for the option of using olive presses in the local area. That year the harvest turned out to be particularly bountiful, and he was able to benefit from the increased demand for olive presses. By paying for the option to use the olive presses he knew his entire downside: if no olives were harvested that year, he would lose the initial outlay. With even a normal harvest he would make money, but in the event of a Black Swan harvest, Thales stood to make a fortune.

This is a book that had me going from thinking the author is a genius to this guy is an idiot quite often in the first few chapters. His style could definitely rub some people the wrong way, but if you stick with it, I think the concept is useful and the book well worth reading.