Antifragile

 

Some things benefit from shocks;  they thrive and grow when exposed to volatility, randomness, uncertainty, opacity, adventure, disorder and stressors.  Yet, in spite the ubiquity of the phenomenon, there is no word for the exact opposite of fragile.  Let us call this hidden property antifragility.

Antifragility is beyond resilience or robustness: the resilient resists shocks and stays the same; the antifragile gets better. It is behind anything that has changed with time: evolution, culture, ideas, revolutions, political systems, technological innovation cultural and economic success, corporate survival, good food recipes (say, chicken soup or steak tartare with a drop of cognac), the rise of cities, cultures, legal systems, equatorial forests, bacterial resistance... Even our own existence as a species on this planet. And antifragility determines the boundary between what is living and organic (or complex), say the human body, and what is inert, say a physical object like the stapler on your desk.

What is antifragile loves randomness and uncertainty, which also means – crucially – a love of errors, a certain class of errors. Antifragility has a singular property of allowing us to deal with the unknown, to do things without understanding them —and do them well. Let me be more aggressive: we are largely better at doing than we are at thinking, thanks to antifragility.

It is easy to see around us things that like a measure of stressors and volatility: economic systems, your body and that of your partner, your nutrition (diabetes and Alzheimer’s disease seem to come largely from lack of randomness in feeding and absence of the stressor of occasional starvation), your psyche. There are even financial contracts that are antifragile: they are explicitly designed to benefit from market volatility.

The new property of antifragility makes us understand fragility better. Just as we cannot improve health without reducing disease, or increase wealth without first decreasing losses, antifragility and fragility are on a spectrum. They key is to understand how to position systems in order to move them away from fragility, and towards antifragility.

By understanding the mechanisms of antifragility we can build a systematic and broad guide to nonpredictive decision making under uncertainty in business, politics, medicine, and life in general —anywhere the unknown preponderates, any situation in which there is randomness, unpredictability, opacity, or incomplete understanding of things.

It is far easier to figure out if something is fragile than predict the occurrence of an event that may harm it.  Fragility can be measured; risk is not measurable.  This provides a solution to what I’ve called the Black Swan problem – the impossibility of measuring the risks of rare events and predicting their occurrence. Sensitivity to harm from volatility is tractable, more so than forecasting the event that would cause the harm. So we propose to stand our current approaches to prediction, prognostication, and risk management on their heads.

In every domain, we  propose rules for moving from the fragile towards the antifragile, through reduction of fragility or harnessing antifragility. And we will see that we can detect antifragility (and fragility) using a simple test of asymmetry: anything that has more upside than downside from random events (or certain shocks) is antifragile; the reverse is fragile.

Crucially, if antifragility is the property of all those natural (and complex) systems that have survived, depriving these systems of volatility, randomness and stressors will harm them. They will weaken, die, or blow up.  We have been fragilizing the economy, our health, political life, education, almost everything… by suppressing randomness and volatility.  Just as  spending a month in bed (preferably with an unabridged version of War and Peace and access to The Sopranos’ entire eighty six episodes ) leads to muscle atrophy, complex systems are weakened, even killed when deprived of stressors. Much of our modern, structured, world has been harming us with top-down policies and contraptions (dubbed “Soviet-Harvard Illusions” in the book) which do precisely this: an insult to the antifragility of systems.

Indeed, the political discourse is lacking a concept. Policy makers aim at the timid concepts of “resilience”, “solidity”, not antifragility, hence stifling the mechanisms of growth and evolution; we didn’t get to where we are thanks to resilience, but thanks to antifragility. And, what’s worse, we didn’t get to where we are today thanks to policymakers —but the tinkerers’ appetite for risks and errors. About everything top-down fragilizes and blocks antifragility and growth; everything bottom-up thrives under the right amount of stress.  The process of discovery (or innovation, or technological progress) itself depends on antifragile tinkering. This is the tragedy of modernity: those trying to help are often hurting us the most.

Which brings us to the largest fragilizer of society, and greatest generator of crises, absence of "skin in the game".  Some become antifragile at cost to others by getting the upside (or gains) from volatility, variations and disorder and exposing others to the downside risks of losses or harm from them.  And such antifragility-at-the-cost-of-fragility-of-others is hidden. Further, as we discovered during the financial crisis that started in 2008, these risks are easily concealed owing the growing complexity of modern institutions and political affairs.  While in the past people of rank or status were those and only those who took risks, had the downside for their actions and heroes were those who did so for the sake of others, today the exact reverse is taking place. We are witnessing the rise of a new class of inverse heroes, that is, bureaucrats, bankers, Davos-attending fakes, and academics with too much power, and no real downside and accountability. They game the system while citizens pay the price.

At no point in history have so many non-risk-takers, that is, those with no personal exposure, exerted so much control.

 

Thou shalt not have antifragility the at the expense of other’s fragility.