“We should try to create institutions that won’t fall apart when we encounter black swans—or that might even gain from these unexpected events. To deal with black swans, we instead need things that gain from volatility, variability, stress and disorder.” – Nassim Taleb, Antifragile
Nassim Taleb divides the world and everything that populates it (people, things, institutions, lifestyles) into three categories: the fragile, the robust and the antifragile. You are fragile if you avoid disruption out of fear that you will break. You are robust if you can absorb shocks without flinching and without changing the core of who you are. And if disruptions make you stronger and more adaptable to each new challenge you face, you are antifragile. Taleb argues that everyone should strive to be more antifragile.
Our current financial system is fragile: The success of the overall economy is reliant upon individual components that are easily disrupted, such as banks that are too big to fail. To change this paradigm, economists increasingly seek to build robust institutions. Such institutions will remain strong in the face of adverse effects if an individual component of the economy fails—such as subprime mortgages, sovereign debt or investment banks. That’s the common theory.
Nassim Taleb challenges this approach. Instead of working to create robust institutions, the focus should be on building “antifragile” institutions, which are not only unharmed by adverse events, but are actually strengthened by them. In a world that is increasingly disruptive, we need people, institutions and cultures that thrive on disruption. Embracing the antifragile mindset, Taleb argues, will not only strengthen the global economic arena, but our society as a whole.
Taleb has written a bold, insightful and entertaining book, filled with stories, human experiences and intriguing notes. It’s a book that deserves to be read more than once, as readers may need more than one read to digest the brilliance of this opus.