MarzAat

A retro review from January 5, 2013.  This review copy came from Amazon’s Vine program.

Review: Anti-Fragile: Things That Gain from Disorder, Nassim Nicholas Taleb, 2012.

This is not an investment guide.

This is not a fitness guide.

This is not a diet guide.

This is not a screed against the dismal science.

This is not a call for fundamental economic and political change.

This is not an autobiography.

This is, as Taleb himself has called it, a work of philosophy which touches on all of the above. I’d also call it a field guide to understanding important parts of the natural and social worlds. It finds much inspiration in the ancient texts of the Mediterranean. Taleb says “moderns have severe handicaps when it comes to wisdom”.

We rely, he argues, too much on the illusion of knowledge, too much on false precision, ignorantly intervene, centralize our decisions, try futilely to avoid random risk. Taleb practices “naturalistic risk management” – ways of minimizing bad risk and benefiting from the “Extended Disorder Family”: uncertainty, variability, imperfect knowledge, chaos, volatility, time, the unknown, randomness, error, and stressors”. Weak things are hurt by disorder; robust things are unchanged, and, as the title indicates, Taleb’s coinage “antifragile” designates those things benefitting from disorder.

Taleb’s book has whole charts placing everything from types of literature to ways of thinking to stress to economic systems to medicine to errors into the appropriate column of this Central Triad of reaction to disorder. He may be, as he says, given to “angry, dismissive, and irascible” prose, but there is a missionary zeal behind this work. Before thanking the reader at the conclusion for reading the book, he embraces disorder as not only potentially life altering in a good way but the key to life’s zest, accomplishment, and ethics. Taleb, as he often notes, has plenty of “F*** you” money by applying his ideas successfully in the world of finance, so money is not the primary motive for this book. He so wants you to be exposed to these ideas that he uses a barrage of ideas to get his points home. There is an opening laying out important concepts of the book and providing a roadmap to the rest of the book. There is a glossary. There is a bibliography. There’s a ten page appendix graphically summarizing the book. There is a highly technical appendix with mathematical arguments. Taleb promises a free e-book with the most elaborate supporting technical documents and arguments. There are quotes from Roman and Greek and Arab classics. There are historical anecdotes. There are personal anecdotes – usually negatively reflecting on famous economists – from Taleb’s life. There are the dialogues between Nero, a fictionalized version of Taleb, and Fat Tony. The latter is the opposite of Taleb, unintellectual and inarticulate but illustrative of Taleb’s caution that unintelligible is not unintelligent and many facts are irrelevant in successfully making money off suckers – the speciality of Nero and Fat Tony.

Taleb on investment: a barbell strategy of investing mostly in safe options with ten percent in highly risky – but potentially highly profitable – stock.

Taleb on fitness: your body probably doesn’t benefit most from regular, low-grade exercise but, rather, from random, high output, high stress exercise. He talks about his own experience in bulking up after a bodyguard (hired after Taleb’s public and successful predictions of 2008’s financial crisis resulted in death threats) introduced him to the idea of simply trying short workouts where he just tries to best his personal record of weight lifted.

Taleb on health: your body probably doesn’t like regular feeding or eating things your ancestors didn’t eat. It needs the stress of deprivation occasionally.

Taleb on economics: intervention by the “Soviet-Harvard” school of economists causes a great deal of havoc. There is a tyranny of talkers who never pay the price for their bad advice – unlike the old days when bankers in charge of failed institutions were executed.

Taleb on social and political change: we need to force politicians and leaders to put “skin in the game” whether it’s making war or running a company. The “principal-agent problem” was solved in the old tradition of the captain going down with his ship, the Roman engineer being forced to camp out under the bridge he built. The modern economic elite too often socialize loses and privatize profits. Limited-liability corporations should be curtailed, corporate officers’ personal assets be placed at risk in certain circumstances. Globalization is economic efficiency, but efficiency is the enemy of reliability. We rely too much on the false precision of models. Massive 19th Century building projects were often completed much closer to schedule than modern ones because there was not the illusion of proper planning facilitated by computers crunching metrics.

I don’t take Taleb as an absolute guru. I disagree with him somewhat on the harm stemming from large corporations though I would certainly support the notion that, in effect, “too big to fail” is too big to be allowed to exist. On a more minor level, I don’t agree with his opinions on science fiction’s lack of literary worth — which partly stems from Taleb’s justified suspicion of “neomania” – or his hostility to private gun ownership in America. But I do think this and his The Black Swan are important reminders of our systematic mental fallibilities and the inescapable role of randomness in the world. And there is a welcome humanity – as well as a modified application of the stoicism of Senca to the modern world – in Taleb’s efforts to acknowledge, accept, and use the chaos around us.

In short, I do consider this a modern work of wisdom.