Antifragile: Things That Gain from DisorderAntifragile: Things That Gain from Disorder by Nassim Nicholas Taleb
My rating: 5 of 5 stars

I enjoyed this book but suspect others might find it a hard read.

Taleb points out that this is the last in the trilogy that includes Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets and The Black Swan: The Impact of the Highly Improbable. He also says you could read the chapters from all 3 in any order if you want to. I got a lot out of the three books but reading them is a labour of love. If you want a quick textbook style explanation go looking for his other more technical works.

You first have to get to grips with his literary, raconteur (although he would prefer flâneur) style. It’s not a textbook and in fact the heavy number based, more academic, arguments are in other documents you can get from his website. Some readers find the style hard to get to grips with, but I like it.

He also makes words up, like Antifragile itself, sometimes for effect and sometimes because he doesn’t feel there is a word that works. I like this playing with words, it amuses me, I play with words a lot myself.

The core idea in Antifragile comes from the ones he explores in the other books. In essence we live in a world that isn’t dominated by the comforting shape of the normal distribution. There are events that are rare but will happen and they completely drown out the rest of the things you come into contact with the other 99% of the time. This is why the Black-Scholes equation is bunk, you can’t take a derivative of a catastrophic disconnect so the risk it gives is useless, without perfect knowledge of the future. It does work when things are stable, for example I’ve seen it used in estimating risks in queues in development processes, but as soon as you are open to catastrophic black swan events the figures it gives are meaningless, in fact dangerous.

If you have antifragility then you can take advantage of these sharp disconnects to make you richer, stronger or happier. He uses as examples where systems become stronger when challenged. Of course these are used mostly metaphorically to show that it does happen out there in the real world.

The bit that had me laughing out loud was his description of the “Soviet-Harvard illusion” where people assume that things that happen together have some connection in reality. He gives the example of a Harvard professor going and lecturing birds on how to fly because they wouldn’t be able to without the series of lectures and growing his or her own sense of importance because of it. This is his beef with academic theorists, none of their ideas have weight in the real world, and if you look at how we actually do things and what the real risks are when you take black swan events into account.

I also liked the Barbell concept, put most of your risk into very conservative places, and a small amount in very high risk (as in the risk is shape is a barbell, yes?). If the high risk pays off all is good, but you’ve not lost much if it doesn’t pan out. On the other hand, most of us go for “medium” risk, which is in fact not medium at all because of the propensity for the economy to have black swan events. This is in fact the riskiest long-term strategy and we’ve all bought into it because it’s been mis sold and feels safest when times are calm. It isn’t because long term times are not calm and never will be.

Similarly, take things like climate change, or fracking. The onus isn’t on the people who worry about it to prove there is a problem. Put simply if you start doing something novel or unusual you must prove it doesn’t change things for the worse – the onus is on the new to prove its safety. We already understand the old works fine. Again, this is about unknown black swans waiting for you.

So, if you want to meet Fat Tony and a host of interesting characters who live in this place, read the books. But remember – they aren’t text books, but a literary exploration of some interesting ideas and you have to be prepared to walk a while with Taleb while he tells you his stories.

View all my reviews

Facebooktwittergoogle_plusredditmail