nassim taleb photoNassim Taleb, author of Fooled By Randomness and The Black Swan, talks with EconTalk host Russ Roberts about antifragility, the concept behind Taleb’s next book, a work in progress. Taleb talks about how we can cope with our ignorance and uncertainty in a complex world. Topics covered include health, finance, political systems, the Fed, your career, Seneca, shame, heroism, and a few more.

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Taleb on Antifragility : Time: 1:13:56

Transcript:

0:36

Intro. [Recording date: December 19, 2011.] This book is in process, you estimate it’s roughly a year away. So, we are here to have a conversation that is in progress. I did my first EconTalk on the day of the release of The Black Swan. So nice, so fun. I know a lot of listeners out there are very jealous because I’ve had the privilege of reading the manuscript-not the final book. It’s in process. But for those of you who are out there, excited, this will have to satisfy you for maybe about a year. Nine months. Well, that’s a good gestation period. Now you start off with a very provocative idea. The title of the book is a little bit strange. I don’t think it’s a word in the English language: antifragility. You start off by asking: What is the opposite of fragile? And of course we think we know what that is. The opposite of fragile is robust, you say; it may be unbreakable. But you argue that’s not right way to think about it. It doesn’t capture the essence of fragility. So, why do we need another term? Because if you send a package by mail to your cousin in Australia and it has champagne glasses, you write “Fragile” on it. If it is something that is robust, you don’t write something on the package. You don’t say you don’t care, you can do whatever you want. So the fragile, the upper bound comes back unharmed or [?] and of course the worst is completely destroyed. So, that’s the fragile. The robust has an upper bound of unharmed and a lower bound of unharmed. The empty fragile would be a package on which you’d write: Please mishandle. Because a lower bound would be unharmed. And the upper bound would be improved–you’d get, instead of sending 6 champagne glasses, 8 would arrive. Exactly. Like in mythology. Or they’d be better glasses, stronger somehow. Like the Hydra–you cut one head, two heads grow back. So the robust would be more like the Phoenix–you shoot it and it comes back. So the upper bound and the lower bound are both unharmed; with Hydra, the Hydra wants harm. When I first read that idea I thought: Okay, that’s interesting, true; but why is it relevant. There are not that many Hydras around, life doesn’t consist of many Hydras. But much of the book convinced me and the reader that actually antifragile is a very powerful idea. So, where is that important, where is it relevant in our lives? The first thing, the reason I had that word–I had an equivalent word for something like volatility, but it was not powerful enough to capture it. And it was called long volatility or love volatility, but it didn’t quite capture the idea. But one day I read this book by Guy Deutscher on language, and he reports in a book something that was discovered by the U.K. Prime Minister Gladstone, and that was to the shock of everyone, about 140 years ago–that the Greeks did not have a word for blue. The color of the sky. The wine-dark sea. Homer did not have a word for blue; he did not have the full spectrum of colors. And these developed much later; and ancient Mediterraneans, the Greeks, the Hebrews, the Semites, didn’t have a word for blue or for many similar words. They were not color blind. They were biologically okay. They were just culturally color blind. So, I realized you just give light on something by coining a word; and that turned out to be “antifragility.” And once I wrote it down, I realized, I started seeing it in places I never suspected. It had this property. Give us some examples of things that are anti-fragile. We understand what things are fragile. Actually, I am even going to go beyond. Half the book is about things that love volatility, love stressors, love uncertainty–political life. But we’ll get to that in a minute. The human body, the bones. The bones need stressors, constant stress. They communicate with the environment with stress. If you spend Christmas vacation in a space shuttle, you’ll come back with diminished bone density. Which is weird. Because you’d think it would be great to be in the space shuttle because your bones will get to rest. What could be better than getting them unstressed? Actually, a complex system, a paper that really changed my thinking, by Gerard Karsenty, a 2003 paper in Nature, and of course he had a lot of follow-ups; and in it he showed it’s not aging that causes weakness in the bones, the reverse is equally true. You have a complex system with feedback loops that are not as obvious as in a linear, ordinary system. And therefore the idea that weak bone mass makes you older. And vice versa. Weaker and older. You can see the bone density of females in African villages who carry jugs of water on their heads, between 100 and 200 pounds–they have excellent posture and excellent health. And even male reflective [?] abilities are affected by bone density. Which means if you go to the gym you are wasting your time because you need weight-bearing stressed, not these [?] machines that waste your time. We’ll go into that in more detail later; you bring it up in the book and it’s a very interesting idea: that certain things are good for our body, exercise and weight lifting, actually are not. We’ve talked a little about this with Art De Vany, who I know you are a fan of. Art gave me a lot of ideas and suddenly everything flashed together, when I made the distinction between two types of systems, the organic and the non-organic. The organic has the property that the difference between the living and the dead, the living and the non-living; the living, between living and a machine for example, requires stressors. That’s how the complex systems communicate with their environment. You need a stressor. As with the bones, with your muscles, a lot of things. And usually overcompensate for the stressors–there is a mechanism in biology called hormesis. This table I have in front of me will never get better if I bang on it. Use it and lose it. On the other hand, the human body gets better if it is exposed to the right amount of stressors. Of course, you have to define the stressor and the quantity of stress. But then that makes a difference between two worlds–the organic and the engineered. And now, if you can

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