One of my favorite books that I have not only read, but reread, is Antifragile: Things that gain from disorder by Nassim Nicholas Taleb.
This book is his principal thesis, building on his previous books, Fooled by Randomness, and, The Black Swan. In The Black Swan he discussed the idea of rare events with far reaching consequences. Examples of bad Black Swans would be the banking crisis of 2008, WWI and WWII, and 9/11. Positive Black Swans, he observed, take time to bear fruit, they happen more slowly and subtly, where as negative Black Swans happen all at once.
Taleb explains about the Triad: fragile, robust (or resilient), and antifragile. To illustrate the three types he compares each to a myth of bygone days.
The fragile is compared to the story of the Sword of Damocles from ancient Greece. A courtier, named Damocles, envied his king’s luxury and power. The king, Dionysus, seeing this offered Damocles a deal: They would switch places for as long as Damocles wanted. The courtier thought this sounded pretty good, until he took the throne. Suspended above him was a giant sword, held only by a single horses hair from falling on his head.
This moral tale illustrates the fragility of power: the king’s power is great, but destroyed by the snapping of a hair.
Likewise, the fragile in life are the things that are easily destroyed by a single push. A single shock can set them toward the road of destruction. It’s like being an hourly employee without sufficient savings. Missing one day of work can set you back horribly financially.
Fragility implies more to lose than to gain, equals more downside than upside, equals (unfavorable) asymmetry.
– Antifragile (2012)
Robust is compared to the Phoenix, a bird that dies in the fire every day only to come back the next the same to burn again. Enduring eternally, this bird will burn only to regenerate again the following day.
Things that are Robust are like rubber. They can be thrown, bent, and twisted, but look the same after the abuse. It’s having extra money in your bank account in case of financial trouble. It’s being able to weather small disasters without any side effects.
Taleb couldn’t find a word that was a proper antithesis of fragile. The only words that presented themselves were robust, resilient, etc. Antifragile is not only enduring; it gets better being smashed, beaten and abused.
Logically, the exact opposite of a “fragile” parcel would be a package on which one has written “please mishandle” or “please handle carelessly.”
– Nassim Taleb Antifragile (2012)
To give a proper illustration he compares it to the Hydra, a mythical serpent that resided in the swamps of Lerna. The hero Hercules attempted to destroy it by severing its head, but every time he did it grew back two more.
Antifragile is moving beyond mere robustness, or endurance. It is the next level. Antifragile gets better and profits by chaos and volatility. It’s the essence of opportunity. Rarely will you find that elusive and fickle god without a crisis, for crisis creates opportunity.
Antifragility in Action
An easily example is your cell phone. You may have it charged 99% of the time, but in that 1%, you may be stranded on the side of the road with a dead phone. By keeping an extra charger and cable in your glove compartment, you can prevent the possibility of being stranded without the ability to call anyone. This may seem like a remote probability, but that’s the idea of antifragility, being prepared for those situations.
The Antifragile Farm
When I look at antifragility it can be easily applied to the local farm. If we turn back the clock to the 1940’s we can see that the majority of local farmers had more than one crop that they raised. Corn and soybeans would be accompanied by vegetables and livestock.
The family would have a few dairy animals for their home use along with a few extra for production. The chickens would cluck around the yard. When the family wanted a chicken dinner they’d go out and pick their bird. The farmer had a diversified ecology on his farm. When a particular crop would fail he would still have products to sell and keep his family sustained.
At that point all the farms of America were not mortgaged to the hilt, the farmer inherited the land from his father and would leave it to his children. If there is a food shortage or recession, the farmer could keep food on the table by raising it themselves, they were prime examples of antifragility.
How do we become more Antifragile? Here a couple of quick steps.
It’s one of the easiest things on this list. Keep an extra of something you need, like a car charger and cable for your phone. Or have a stash of cash at your home in case you need it for an emergency. Make a bug-out bag to keep in your home in case of a tornado or fire.
2. Look for the upside
Taleb defined the modern stoic as, “..someone who transforms fear into prudence, pain into information, mistakes into initiation, and desire into undertaking.” Stoicism generally requires a lack of care for good or bad. Seneca altered the typical stoic thought: keep the upside, remove the downside.
Antifragility implies more to gain than to lose, equals more upside than downside, equals (favorable) asymmetry.
You are antifragile for a source of volatility if potential gains exceed potential losses (and vice versa).
– Antifragile (2012)
3. Learn to use the barbells
The barbell strategy is the combination of extremes at both ends separated from contact: playing it safe in more high risk, bad Black Swan probable situations, and taking a lot of small risks in situations open to positive Black Swans.
On the farm it can be illustrated by raising a crop you know you can sell, like corn, but then branching out and selling smaller crops of vegetables at farmer’s markets.
In the end you need to remember that antifragility is a mindset. It is conscious action in your daily life. Bad things and bad situations happen all the time. If you want opportunity, you’ll have to keep your head and watch for them. If you want to survive them, have a plan.