Hello, welcome back. Today I am going to be talking about the book Antifragile by Nassim Taleb. This book is a sequel to the last book I discussed The Black Swan where Taleb explores how highly improbable events (which he calls Black Swans) that are nearly impossible to predict, have disproportionately driven the course of history. Black Swans operate by power laws which mean that a single event can often dominate the overall behaviour (such as stock market crashes). How then, are we supposed to plan our lives when a Black Swan can come and disrupt everything, for better or for worse? The way it was explained to me, if the Black Swan is the diagnosis, then Antifragility is the cure. In this blog I will summarize the key points from this book then discuss how to take advantage of its ideas in your life.
This book has a somehwat confusing structure. I have re-labelled books 1-6 as parts 1-6. Taleb later expanded part 7, ethics of antifragility, into its own book Skin in the Game. I will save this part for a more complete post on those ideas when I review Skin in the Game. I have also omitted the entire theme of iatrogenics and interventionalism from my notes below. This is because I think it distracts from the central (and overwhelmingly more valuable) message of leveraging antifragility to best control Black Swans.
This part is full of a bunch of arbitrary definitions such as what is "rational" and how technology is "best used" etc. I don't find them very compelling so I have omitted them.
We have discussed the concept of Antifragility and the many places we can see it at work. Now the question is, how to we convert this idea into action and real world value?
The most obvious answer is the actual advice Taleb provides: implement the Barbell Strategy. For literal investments, this could mean 90% goes towards sure bets such as AAA bonds, investing in the US treasury etc. and the other 10% could be in tech startups, penny stocks etc. For employment it could be working 9-5 as a teacher, accountant, or anything very stable. And at night, 5-12, it could be as a writer, musician, entrepreneur, anything where the successful follows a power-law distribution. I find these suggestions to be a bit impractical though. Many people are not able to restructure their lives. As for the financial advice, I won't comment because I'm not knowledgable enough.
One place where I can see immense value is in evaluating side projects. Suppose you are offered to join an ambitious project that will require you to learn a lot of new things and make unlikely discoveries. Conventional wisdom might say that this is challenging and that the odds are stacked against you. A proponent of Antifragiltiy might recognize that this is convex. The upside is "unlimited" in the sense that if the project works, by nature of being an ambitious undertaking, the payoff would be huge (positive Black Swan) and you could continue to benefit from it. On the other hand, if your project fails, you were forced to learn many (hopefully useful) skills. It's a win-win, you should see this as a positive asymmetric bet.
Let's say you're a parent and you want to enroll you children in extracurriciular activites to enrich their interests and expand their mind. You want to enroll them in music lessons. Guitar is a concave bet, few guitar players can easily pick up other instruments; piano is convex, it will help you learn any other instrument. You want to enroll them in a sport. Team sports such as hockey, soccer, lacross teach traits like teamwork and leadership as well as physical elements like cardio. Sports such as golf (no offence to golfers), at the you level, teach only a specific kind of hand-eye coordination.
Reading is convex. Every time you read a new book, you can connect the ideas you learn to all the pre-existing ideas you've already seen. To demonstrate using an overly simplified example, suppose you read your first book and you now know five things. You read a second book with another five things, but this time, you can also connect some of those ideas to pre-existing ideas. Perhaps now you know five things from each book plus a connection between the main ideas. 5 + 5 = 11! Suppose you read another book with yet another five things and could form a connective idea between each central thesis (that's a +2). Now, 5 + 5 + 5 = 18! This effect will be exponential and the more new things you read about certain topics, the better this network of ideas will be. Convexity at its finest!
This is one of the few books in my notes that is labelled "Lifechanging". It's part of the reason I started this website! All upside, no downside. Adopting Antifragility allows you to minimize your exposure to disaster (negative Black Swans) while still providing exposure to the runaway benefits of power-laws. The barbell strategy is the most logical comprimise I've ever heard between providing a stable career while also pursuing your dreams in the afterhours. We can also analyze the ideas we see in the media that are referring to risk, opportunity and Black Swan events with a more sophisticated way of thinking. My plan for the next couple books is to look at the books I formerly mentioned by Steven Pinker. He is the rare optimist when it comes to discussing global issues and I'd like to do some thinking about where I can agree with him. As we saw above, Taleb actually has somewhat of a (seemingly childish) rivalry with Pinker on the issue of global fragility to war so I may choose to discuss their debate specifically.