O LET US NOT REAP THE WIND!
In me very first edition of Serf Under_ground Journal I referred ter Plato, up-there on the hill, advocating a political system to arrest all change, a system to create a society of equilibrium, a ship of state steered by a philosopher king.
Nassim Taleb, in his book ‘The Black Swan,’ questions the possibility or desirability of this, given that out-there, black swan events abound, those Hume’s thanksgiving-turkey-events that are impossible ter predict.
In his next book, ‘Anti-fragile,’ Nassim Taleb takes ‘The Black Swan’ to its natural and prescriptive conclusion. Since black swans dominate society and history, Taleb’s problem is how to avoid interference with things we do not understand, what he calls the complex fourth quadrant zone, avoid the errors made by men in suits, the ‘experts,’ who think that what they do not see is not out-there, or what they do not understand does not exist.
The Anti-fragile is beyond resilient.
Taleb describes the anti-fragile as the opposite of fragile, not just dealing with volatility but learning from it. Anti-fragile is beyond resilient, it’s the process of benefiting from shocks in evolution, cultures, technical modifications, it’s the examples of economic and corporate success in dealing with the unknown. Becoming anti-fragile, Nassim Taleb says poetically, is learning how to love the wind, how to domesticate the mysterious and the opaque.
He presents a chart, a triad mapping: (F) fragile domains in human affairs, (R) Robust domains in human affairs and (A) Anti-fragile. For example:
*Knowledge: (F) Academy. (R) Experience (A) Erudition.
*Errors: (F) Hate mistakes.( R) Mistakes are just information. (A) Love mistakes since they are small.
*Education : (F) Classroom. (R) Real life. (A) Real life and libraries.
*Political Systems: (F) Centralized Nation State. (A) Decentralized Federation of City States.
*Biological and economic systems: (F) Efficiency optimized, ( R) Redundancy (A) Degeneracy.(Functional redundancy.)
Stressors are cool.
That which is inanimate, when subject to stress either undergoes fatigue or breaks. That which is living is both fragile and anti-fragile. A human body, to a point, can benefit from stressors and self repair though we eventually wear out, hopefully leaving behind genes or a book etc.
Stressors are information. Your body is a complex system that gets information not via logical apparatus but through stress via hormones or other messages we haven’t discovered yet. In small children, pain is risk management.
In our ancestral habitat we humans were prompted by natural stimuli, fear, hunger, desire, that made us work out and keep fit for our environment. Taleb relates a story about Mithridates, King of Pontus, who ingested measures of toxic substances to build immunity, practicing hormesis, which was well known to the ancients, the knowledge that a little bit of an otherwise harmful substance can benefit an organism by triggering resistance and other healthy effects. Things that are anti-fragile benefit from volatility, suppress volatility and they will weaken and die. We all know how our muscles atrophy after a long illness. Comfort can also weaken us via physical disuse and modern diseases.
Taleb’s book ‘Anti-fragility’ is about how not to be the thanksgiving turkey or even how to be a turkey in reverse, figuring out the difference between true and manufactured stability. Volatility is information. Variations can act as purges, for example, small forest fires compared to conflagrations that do extreme damage. For similar reasons long periods of economic stability are not good for the economy. Firms become weak during long periods of prosperity and hidden vulnerabilities accumulate under the surface. The longer one goes without a trauma the worse the damage when it occurs. A volatile market doesn’t let people go such a long time without a clean-up of risks, thereby preventing such market collapses.
Denying hormesis, the natural anti-fragility of organisms, comes from top-down government playing conductor. We fragilize systems by denying their randomness, putting them in the procrustean bed of cushy and comfortable – but harmful moderation. Taleb notes the irony of Lenin, creating his project of the great top-down centralist State, spending much of his time writing in Switzerland, the most robust small government State on the planet.
Modern States – Blind ter Opacities.
Say, those politicians, economists and academics out-there err when they think they can confidently predict and control complex events even a little way into the future. Tsk! Why we can’t even predict the stock market a few hours from now. Much of our modern structured world has been harming us with top-down policies, subject ter what Nassim Taleb calls ‘Soviet-Harvard’ delusions, over estimations of the scientific knowledge of a phenomenon, which try to do precisely this.
Taleb identifies the top-down problem as hubris. The largest fragilizer of society and greatest generator of crises is the over confidence of platoists with absence of skin in the game. Bureaucrats, bankers and academics have too much power and no real accountability, They get the upside and the citizens get the downside when the nerds make errors. Think Erlich, Sachs, Stiglitz and Greenspan. Some amnesiac ‘experts,’ like Stiglitz, forget their errors in judgement and later write I- told-you-so-books telling how they predicted the crisis they actually helped bring about.
A main source of the economic crisis that started in 2007, Taleb identifies in the iatragonics of the attempt by the uber fragilista ‘expert,’ Alan Greenspan, to iron out the ‘boom-bust cycle’ causing risks to go hide under the carpet and accumulate there until they blew up the economy. The same naïve interventionism was also applied by the UK government of fragilista Gordon Brown whose own grand mission was to ‘eliminate’ the business cycle.
Artificia docuit fames, Sophistication is born out of hunger.
Volatility is information as Taleb notes, yet we tend to focus on post traumatic stress disorder while ignoring post traumatic growth, how persons harmed may surpass themselves. Innovation comes out of trouble, problem situation trial and error.
Artifia docuit fames. : The excess energy from over reacting to setbacks is what motivates innovation. Think of those uneducated tinkerers that initiated the Industrial Revolution, Arkwright developing the water frame, Kay inventing the flying shuttle, Hargreaves inventing the spinning jenny.
Hmm even a serf understands this. Necessity is the mother of invention. Innovation doesn’t come from putting someone through the Harvard Business School class taught by a highly decorated Professor who has never innovated anything. Matt Ridley, in a well-known TED TALK, ‘When Ideas Have Sex, ‘ recognized the unforeseen beneficial consequences that free exchange of goods and ideas through human trading may bring about. It’s another argument for black swan effects since you cannot forecast collaborations, direct them or see where they’re going… not top-down, but bottom-up innovations that have changed the world.
Some Nassim Taleb Handy Hints fer Non-predictive Decision-making.
By grasping the mechanisms of anti-fragility we can build a guide ter non-predicting decision making under uncertainty says Nassim Taleb.
Get out of the fourth quadrant top down- decision making and inter looking at yr options.
In face of lack of knowledge, first do no harm. So if it ain’t broken, don’t fix it, eschew noble intent meddling. Tsk! Let volatility hold sway. Procrastinate. Keep yr options open and keep outta’ debt, yr more resilient that way. There’s lots more in Nassim Taleb’s stimulating book but that’s enough fer now. Enough ter remind yer that the open society is cool.
Big Wind. Theodore Roethke.
Where were the greenhouses going,
Lunging into the lashing
Wind driving water
So far down the river
All the faucets stopped?
So we drained the manure-machine
For the steam plant,
Pumping the stale mixture
Into the rusty boilers,
Watching the pressure gauge
Waver over to red,
As the seams hissed
And the live steam
Drove to the far
End of the rose-house,
Where the worst wind was,
Cracking the cypress window-frames,
Cracking so much thin glass
We stayed all night,
Stuffing the holes with burlap;
But she rode it out,
That old rose-house,
She hove into the teeth of it,
The core and pith of that ugly storm,
Ploughing with her stiff prow,
Bucking into the wind-waves
That broke over the whole of her,
Flailing her sides with spray,
Flinging long strings of wet across the roof-top,
Finally veering, wearing themselves out, merely
Whistling thinly under the wind-vents;
She sailed until the calm morning,
Carrying her full cargo of roses.