Antifragile (book)

🚀 The Book in 3 Sentences

Anti-fragile systems are those which not only can withstand crises and randomness, but also benefit from it. To create an anti-fragile system, we need to allow for small, continuous bursts of randomness and be open to the positive effects of drastic changes. We should also keep in mind that real-world experience is key, not just theoretical analysis.

Note-Making

down:: Anti-Fragility 🔼Topic:: Risk Management

Clarify

💭 Simply, the main message is...

If your life is not built to withstand disasters you are in a problem. Black swans will always happen. Prevent bad randomness from affecting you, and be open to positive randomness.

Relate

💭 How does this topic relate to my life?

Critique

✅ I agree with... the advantages are... its true that todays' economy is built around growth and not stability, which only increases the strength of the crisis when it will hit. Also its true that we can't predict when a crisis will hit, but we can be quiet certain that it will happen eventually.

❌ I disagree with... the disadvantages are...

On the one hand, there is a logical claim about the need to be resilient to crisis, but on the other hand the message is libertarian at best and anti-human otherwise. The book is anti governments, anti interfering with the economy, and any attempts to have a welfare system, all to "improve humanity in the long run". The end justifies the means, even if we have to have civil wars or political assassinations.

In the middle of the book I realized that he's like Gadi Taub, on the outside he's all confident but actually he spends most of his time disrespecting others which only shows how big is his ego and that he only cares about reputation. Sometimes his stories has no point other than to tout his own horn. Aside from promoting himself, some of his advices are actually dangerous, like "if you want to be healthier stop going to the doctor and don't take medications"

Also he is contradicting himself. On the one hand he gives a great emphasis on the past, not willing to consume food, books or technology that didn't stand the test of time, but on the other hand smoking is bad.

💭 Implementations and limitations of it are...

Reflect

💭 My main take-aways are.. this affects me by...

Prepare for the worst, instead of hoping that a crisis will never show

Treatment by reducing. For example to stop smoking would be the best treatment instead of any chemotherapy.

📒 Notes

Summary

how to be anti fragile:

1. Less is more
2. Stoic resilience
3. Seek information, ignore noise
4. Experiment and adaptation
5. Prepare for the worst
6. don't fight the current
7. local, small and simple beats abstract, big and complex

Introduction

The Antifragile: An Introduction

• Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better.
• The antifragile loves randomness and uncertainty, which also means—crucially—a love of errors, a certain class of errors.
• If about everything top-down fragilizes and blocks antifragility and growth, everything bottom-up thrives under the right amount of stress and disorder. The process of discovery (or innovation, or technological progress) itself depends on antifragile tinkering, aggressive risk bearing rather than formal education.
• You get pseudo-order when you seek order; you only get a measure of order and control when you embrace randomness.
• The fragilista falls for the Soviet-Harvard delusion, the (unscientific) overestimation of the reach of scientific knowledge. Because of such delusion, he is what is called a naive rationalist, a rationalizer, or sometimes just a rationalist, in the sense that he believes that the reasons behind things are automatically accessible to him.
• the fragilista (medical, economic, social planning) is one who makes you engage in policies and actions, all artificial, in which the benefits are small and visible, and the side effects potentially severe and invisible.

Chapter 1 - Anti Fragility

Anti-fragile systems are those who not only can withstand crisis and randomness, but also benefit from it. In our society we see a lot of fragile companies, and even a movement to only make it more fragile, whether by being more anti-risk, i.e trying to artificially stabilize something that is inherently random, or by trying to predict the future.

While we can't predict which and when a crisis will happen, we can measure the fragility level of the system.

In nature we see antifragile systems which constantly change, but are stable in the long run (Creative Destruction). Today's economy is experiencing a market failure by doing a top-down management which enforces the actors to "go along" without letting anti fragile system to emerge. Like trying to control prices instead of letting prices fluctuate, which will provide useful current information to all the players.

An example of anti-fragility:

1. Fragile - Democlisus sword, the power of a king, but when that sword goes down he will die
2. Immune - Phenix, when it does it rises again
3. Anti-fragile - Hydra, cut down one head and two grows back

Between Damocles and Hydra

• Humans somehow fail to recognize situations outside the contexts in which they usually learn about them.
• This lack of translation is a mental handicap that comes with being a human; and we will only start to attain wisdom or rationality when we make an effort to overcome and break through it.

Chapter 2 - Over-compensation

Our body and nature knows how to over compensate, meaning prepare for the worst. For example, working out improves our health by over compensating. When we are introduced with stress, our body is getting used to ever higher levels of stress. Emotional Resilience

Over compensation is not an insurance policy as it is an investment. For example, if we store flour more than we need to, then in times of crisis we can sell high.

Creativity is also the result of over compensation. True innovation is the result of scarcity. In a "perfect" world where everything is in abundance and divided right we won't need to be creative since we already have everything we need. Creativity (MOC)

Nowadays our economy is the opposite of over compensating, we are based on debt, meaning much more prepared for a worse situation when it will come, and it will.

Information and reputation are also anti-fragile. The more we try to control them, the worse the situation will be. Like suppressing protests or trying to control your thoughts. The act of control creates an amplified response such that the final situation is worse than doing nothing. Life as Flow.

Overcompensation and Overreaction Everywhere

• The excess energy released from overreaction to setbacks is what innovates!
• moderns try today to create inventions from situations of comfort, safety, and predictability instead of accepting the notion that “necessity really is the mother of invention.”
• Redundancy is ambiguous because it seems like a waste if nothing unusual happens. Except that something unusual happens—usually.
• A system that overcompensates is necessarily in overshooting mode, building extra capacity and strength in anticipation of a worse outcome and in response to information about the possibility of a hazard.
• the more energy you put into trying to control your ideas and what you think about, the more your ideas end up controlling you.

Chapter 3 - Organic Vs Engineered

Organic systems are usually anti-fragile, while engineered ones are. For example, a biological creature adapts, evolves, while a machine just breaks. (technically animals breaks as well, its just the good ones that survives, same as machines).

As biological creatures, pressure improves us, like a workout. Its important that the pressure will come in small doses, and not a too high fixed amount, otherwise we will crash.

As humans, we evolve thanks to pressure and randomness. Like learning a language is easier when I have no other choice but to speak it. Modern comfort and the will to reduce risk is like mental death. We don't only evolve due to randomness, we also enjoy it more, we look for the new, the different, the surprising. If everything was known in advance, we would always be depressed. Hedonic Treadmill

The Cat and the Washing Machine

• In the complex world, the notion of “cause” itself is suspect; it is either nearly impossible to detect or not really defined—another reason to ignore newspapers, with their constant supply of causes for things.
• Our antifragilities have conditions. The frequency of stressors matters a bit. Humans tend to do better with acute than with chronic stressors, particularly when the former are followed by ample time for recovery, which allows the stressors to do their jobs as messengers.
• Not only are we averse to stressors, and don’t understand them, but we are committing crimes against life, the living, science, and wisdom, for the sake of eliminating volatility and variation.

Chapter 4: Antifragility of the Whole Vs the Parts

Antifragile systems are often made up of small fragile system. For example, for a species to survive, natural selection must happen, so that means that some individuals will not survive and only the fittest will live on. Similarly, economies that are top down managed, ignore the fragility of the small units and thus lose important information and a chance to improve.

This creates a tension between the will to care to your community, and the well being of the society as a whole in the long run. A society will improve as long as it won't protect the individual from its mistakes, so that we could see him as a lesson, and that there will be less of him. Although, we still have that innate desire to protect the weak.

What Kills Me Makes Others Stronger

• some parts on the inside of a system may be required to be fragile in order to make the system antifragile as a result.
• To satisfy the conditions for such immortality, the organisms need to predict the future with perfection—near perfection is not enough. But by letting the organisms go one lifespan at a time, with modifications between successive generations, nature does not need to predict future conditions beyond the extremely vague idea of which direction things should be heading.
• When you are fragile, you depend on things following the exact planned course, with as little deviation as possible—for deviations are more harmful than helpful. This is why the fragile needs to be very predictive in its approach, and, conversely, predictive systems cause fragility. When you want deviations, and you don’t care about the possible dispersion of outcomes that the future can bring, since most will be helpful, you are antifragile.
• a loser is someone who, after making a mistake, doesn’t introspect, doesn’t exploit it, feels embarrassed and defensive rather than enriched with a new piece of information, and tries to explain why he made the mistake rather than moving on.
• building a system in which nobody’s fall can drag others down—for continuous failures work to preserve the system.

Chapter 5 - Randomness Categories

Its better to allow small, continuous bursts of randomness than to try to deny it all together, only to have an explosion and a black swan later on. For example, freelancers are usually more anti-fragile because the situation in the market directly and immediately affects them so they can quickly adapt, as opposed to salary workers who have stability, at least in the short term, but are more affected by crisis. Similarly, governments which are made up of small local governments are more attentive to the local needs than one big government which tries to run a "one size fits all" type of policy.

The Souk and the Office Building

• The more variability you observe in a system, the less Black Swan–prone it is.
• the small (in the aggregate, that is, a collection of small units) is more antifragile than the large—in fact the large is doomed to breaking,

Chapter 6 - Systems that like Randomness

Trying to create stability by denying randomness would only make it worst. Its better to include some randomness in the system to make sure that information would flow quickly between actors, specifically information about risks, so that they could adjust, replace what doesn't work with a better solution.

Tell Them I Love (Some) Randomness

• The longer one goes without a market trauma, the worse the damage when commotion occurs.
• the problem with artificially suppressed volatility is not just that the system tends to become extremely fragile; it is that, at the same time, it exhibits no visible risks. Also remember that volatility is information.
• One of life’s packages: no stability without volatility.
• modernity is humans’ large-scale domination of the environment, the systematic smoothing of the world’s jaggedness, and the stifling of volatility and stressors.
• The story of the nation-state is that of the concentration and magnification of human errors. Modernity starts with the state monopoly on violence, and ends with the state’s monopoly on fiscal irresponsibility.

Chapter 7 - Naïve Interventions

naïve interventions can still cause harm, like doctors who can hurt the patient while treating him. Its better to let nature "run its course". The way to reduce the harm is to let the information flow as freely as possible. When we pay too much attention to a piece of information it will include more noise than signals. For example looking at stock prices hourly is less helpful than once a month. so:

1. don't go to the doctor if its not fatal
2. don't listen to much to the news
3. The state should intervene as least as possible

Procrastination could be a positive sign, a type of inner signal that our mind or body doesn't think that it is good for us.

Naive Intervention

• anything in which there is naive interventionism, nay, even just intervention, will have iatrogenics.
• The true hero in the Black Swan world is someone who prevents a calamity and, naturally, because the calamity did not take place, does not get recognition—or a bonus—for it.
• one should lead a life in which procrastination is good, as a naturalistic-risk-based form of decision making.
• The more frequently you look at data, the more noise you are disproportionally likely to get (rather than the valuable part, called the signal); hence the higher the noise-to-signal ratio.
• the best way to mitigate interventionism is to ration the supply of information, as naturalistically as possible.

Chapter 8 - Prediction

You can't predict the future. Its even better to let the predictors be wrong, instead of letting them creating fragile predictions.

Prediction as a Child of Modernity

• our track record in figuring out significant rare events in politics and economics is not close to zero; it is zero.

Chapter 10 - Antifragile is Good

Stoicism is an example for an anti-fragile philosophy, since we disconnect between our inner feelings and outside influences, so that no matter what happens, we continue to function (although its actually more like "immune" than anti-fragiliy.)

A Nonpredictive View of the World

• the dual strategy of mixing high risks and highly conservative actions is preferable to just a simple medium-risk approach to things.

Fat Tony and the Fragilistas

• You can’t predict in general, but you can predict that those who rely on predictions are taking more risks, will have some trouble, perhaps even go bust.

Seneca’s Upside and Downside

• Stoicism, seen this way, becomes pure robustness—for the attainment of a state of immunity from one’s external circumstances, good or bad, and an absence of fragility to decisions made by fate, is robustness.
• dependence on circumstances—rather, the emotions that arise from circumstances—induces a form of slavery.
• An intelligent life is all about such emotional positioning to eliminate the sting of harm, which as we saw is done by mentally writing off belongings so one does not feel any pain from losses. The volatility of the world no longer affects you negatively.

Chapter 11 - how to Create Antifragility

In a world with black swans, growth has no meaning. Like driving fast without a clear direction or a safety belt. Everything's fine until it goes horribly wrong.

Like Seneca's teachings, you should try to reduce bad risk in life, while being open to the positive effects of drastic changes. For example, even if you are rich, act as though you don't have any money at all, because the goal is to not be poor, instead of using up all your money. Each new income was like a gift, not something he owns that he might lose.

Similarly, we can be immune of bad effects but still enjoy randomness, it requires us to be at both extremes at the same time, while avoiding the middle. For example, don't invest everything on something with a medium risk, rather put 90% of it in the safest option, and 10% at the riskiest option. if a crisis happens, you still keep 90% of your money, but if that risk pays off, you can benefit a lot.

Never Marry the Rock Star

• if something is fragile, its risk of breaking makes anything you do to improve it or make it “efficient” inconsequential unless you first reduce that risk of breaking.
• antifragility is the combination aggressiveness plus paranoia—clip your downside, protect yourself from extreme harm, and let the upside, the positive Black Swans, take care of itself.
• letting people experience some, not too much, stress, to wake them up a bit. But, at the same time, they need to be protected from high danger—ignore small dangers, invest your energy in protecting them from consequential harm. And only consequential harm. This can visibly be translated into social policy, health care, and many more matters.
• In social policy, it consists in protecting the very weak and letting the strong do their job, rather than helping the middle class to consolidate its privileges, thus blocking evolution and bringing all manner of economic problems that tend to hurt the poor the most.
• a barbell strategy with respect to randomness results in achieving antifragility thanks to the mitigation of fragility, the clipping of downside risks of harm—reduced pain from adverse events, while keeping the benefits of potential gains.

Chapter 12 - Optionality

to be anti-fragile you need to be flexible, to create and take advantage of opportunities to improve our situation and adapt it to what is happening outside. For example, experimentation is a good method of flexibility, because each experiment is cheap, but the potential gain is huge.

Thales’ Sweet Grapes

• you need to know whether you do not like the pursuit of money and wealth because you genuinely do not like it, or because you are rationalizing your inability to be successful at it with the argument that wealth is not a good thing
• Any trial and error can be seen as the expression of an option, so long as one is capable of identifying a favorable result and exploiting it,
• The fragile has no option. But the antifragile needs to select what’s best—the best option.

Chapter 13 - Asymmetric Payoffs behind Growth

we should remember that Correlation is not causation. For example, we think that improving education leads to growth, while its actually growth that improves education.

Lecturing Birds on How to Fly

• the simpler and more obvious the discovery, the less equipped we are to figure it out by complicated methods. The key is that the significant can only be revealed through practice.
• Trial and error has one overriding value people fail to understand: it is not really random, rather, thanks to optionality, it requires some rationality. One needs to be intelligent in recognizing the favorable outcome and knowing what to discard.
• In an epiphenomenon, you don’t usually observe A without observing B with it, so you are likely to think that A causes B, or that B causes A, depending on the cultural framework or what seems plausible to the local journalist.

Chapter 14: Green Lumbar Fallacy

We tend to think that human improvements are the result of academic research, but the academia is like an ivory tower, they have no connection with reality and might even harm by trying to impose mistaken narratives on reality, like thinking that game theory is the best guide for negotiations.

Those we are paying close attention to the "real world" of business, science and economy are those who bring actual improvements. Practical experience is key, not theoretical analysis.

When Two Things Are Not the “Same Thing”

• It would seem a reasonable investment if one accepts the notion that university knowledge generates economic wealth. But this is a belief that comes more from superstition than empiricism.
• no evidence that raising the general level of education raises income at the level of a country. But we know the opposite is true, that wealth leads to the rise of education—not
• You cannot look at the future by naive projection of the past.
• When you are fragile you need to know a lot more than when you are antifragile. Conversely, when you think you know more than you do, you are fragile (to error).

Chapter 15 - History of Technology

We need to Cherise those who by trial and error lead to the best innovation of humanity, not our modern washed out version of innovation as defined by the academia.

History Written by the Losers

• we don’t put theories into practice. We create theories out of practice.
• Industrial Revolution, yet they owed nothing to science; they were empirical developments based on the trial, error, and experimentation of skilled craftsmen who were trying to improve the productivity, and so the profits, of their factories.”
• absence of evidence is not evidence of absence, a simple point that has the following implications: for the antifragile, good news tends to be absent from past data, and for the fragile it is the bad news that doesn’t show easily.
• (i) Look for optionality; in fact, rank things according to optionality, (ii) preferably with open-ended, not closed-ended, payoffs; (iii) Do not invest in business plans but in people, so look for someone capable of changing six or seven times over his career, or more (an idea that is part of the modus operandi of the venture capitalist Marc Andreessen); one gets immunity from the backfit narratives of the business plan by investing in people. It is simply more robust to do so; (iv) Make sure you are barbelled, whatever that means in your business.

Chapter 16 - Education

Knowledge learned in a classroom is limited and only relevant to the context in which it was learned. Any attempt to implement it elsewhere is doomed to failure Transferred Learning.

be auto-deduct and focus on practical knowledge.

A Lesson In Disorder

• Only the autodidacts are free. And not just in school matters—those who decommoditize, detouristify their lives.

Chapter 17 - Explaining Vs Doing

There is a difference between rational and practical knowledge - like learning music notes and actually playing an instrument. We need both to be successful. Today there is no balance between the two, we tend to overestimate the importance of rational knowledge, convert all existence into models and words, ignoring experience and practical know-how.

Fat Tony Debates Socrates

• Things are too complicated to be expressed in words; by doing so, you kill humans. Or people—as with the green lumber—may be focusing on the right things but we are not good enough to figure it out intellectually.
• exposure is more important than knowledge; decision effects supersede logic. Textbook “knowledge” misses a dimension, the hidden asymmetry of benefits—just like the notion of average. The need to focus on the payoff from your actions instead of studying the structure of the world
• the probability (hence True/False) does not work in the real world; it is the payoff that matters.

Chapter 18 - why Size Fragilizes

fragiliy and anti-fragility is not linear. a 100 meter drop is not 10 times a 10 meter drop. Traffic jam is caused only when we reach critical mass, and eating 10 meals on one day is not like eating 3 meals for three days.

Size matters, the bigger you are the more fragile you become. we as humans or society in general is capable of sustaining lots of small shocks, but not a big one.

On the Difference Between a Large Stone and a Thousand Pebbles

• For the fragile, the cumulative effect of small shocks is smaller than the single effect of an equivalent single large shock.
• size hurts you at times of stress; it is not a good idea to be large during difficult times.
• Black Swan effects are necessarily increasing, as a result of complexity, interdependence between parts, globalization, and the beastly thing called “efficiency” that makes people now sail too close to the wind.

Chapter 19: how to Detect Fragility and Antifragility

negative knowledge (what doesn't work) is more anti-fragile than positive knowledge (what works). one observation is enough to disprove something, in contrast with the 1000 observation you need to prove it. also, since reality is rapidly changing, what works today might not work tomorrow, but usually what doesn't work stays that way.

as a general rule, Addition by subtraction, or "less is more", or Pareto Principle. Identify the 20% which makes 80% of the cost/harm and try to reduce those, instead of focusing on growth engines.

Via Negativa

• There are many things without words, matters that we know and can act on but cannot describe directly, cannot capture in human language or within the narrow human concepts that are available to us. Almost anything around us of significance is hard to grasp linguistically—and in fact the more powerful, the more incomplete our linguistic grasp.
• since one small observation can disprove a statement, while millions can hardly confirm it, disconfirmation is more rigorous than confirmation.

Chapter 20 - Irrational Vs Rational

we have a misguided view about the future, we tend to prefer the new over the old, but the truth is that usually the opposite is true, the old is better. the Lindy Effect, what has survived so far is also what's likely to survive in the future. Today's kitchen is similar to ancient times, we still transport ourselves using wheels, and clothing is generally the same. Its the new technologies that are rapidly replaced, like start-ups, and its unclear whether those are what brings us value.

Time is the best filter for the anti-fragile, since only those will stand the test of time

Time and Fragility

• To understand the future, you do not need technoautistic jargon, obsession with “killer apps,” these sort of things. You just need the following: some respect for the past, some curiosity about the historical record, a hunger for the wisdom of the elders, and a grasp of the notion of “heuristics,”
• People acquire a new item, feel more satisfied after an initial boost, then rapidly revert to their baseline of well-being. So, when you “upgrade,” you feel a boost of satisfaction with changes in technology. But then you get used to it and start hunting for the new new thing.
• time can act as a cleanser of noise by confining to its dustbins all these overhyped works.
• The classical role of the prophet, at least in the Levantine sense, is not to look into the future but to talk about the present. He tells people what to do, or, rather, in my opinion, the more robust what not to do.
• I surmise that those human technologies such as writing and reading that have survived are like the tile to the dog, a match between natural friends, because they correspond to something deep in our nature.

Chapter 21 - Medicine and Asymmetry

risk management in medicine is misguided for several reasons:

1. there is no consideration for the potential harm to the individual vs the benefits. The more someone is in a life threatening situation, the better each treatment becomes since he has nothing to lose. But the opposite should also be true, the healthier we are, we should let nature "run its course" since the potential harm is larger than the gain.
2. We confuse causality with correlation - high cholesterol and bad health doesn't mean that they are connected, and dealing with the cholesterol might not lead to an improvement in our physical well-being. also, statistics guarantees us that if we do multiple tests, we are surely going to have some bad ones, even by chance or errors, so we can't decide to do a treatment based on one test alone.

The default should be that nature is the best medicine until proven otherwise, while every human treatment is harmful until proven otherwise. This is the burden of proof a-symmetry that we should abide with.

Medicine, Convexity, and Opacity

• what Mother Nature does is rigorous until proven otherwise; what humans and science do is flawed until proven otherwise.
• to believe and act as if one does not have the full story—to be sophisticated you need to accept that you are not so.

Chapter 22 - Medicine by Subtraction

don't go to the doctor.

To Live Long, but Not Too Long

• it is a serious error to infer that if we live longer because of medicine, that all medical treatments make us live longer.

Skin in the Game

Skin in the Game: Antifragility and Optionality at the Expense of Others

• If you take risks and face your fate with dignity, there is nothing you can do that makes you small; if you don’t take risks, there is nothing you can do that makes you grand, nothing.

Conclusion

Conclusion

• Everything gains or loses from volatility. Fragility is what loses from volatility and uncertainty.