Chapter 2. The Souk and the Office Building, an Introduction to the Intervention Bias
A boy scout in Aleppo — the souk and the office building —By Nassim Taleb
Antifragile systems crave volatility —but we humans choke them with the
intervention bias, fear of randomness, and love of smoothness. With the
greatest intentions, we are pressured to “fix” things, and often tend to blow
them up. This chapter will present the competition between man and nature
and how we make political (and other) systems vulnerable to Black Swans
when we deprive them of volatility.
Two Types of Professions
Consider the fate of Iannis (John) and Georgios (George) two twin brothers,
born in Cyprus (both), currently both living in the London area. John has
been employed for twenty-five years as a clerk in the personnel department
of a large bank, dealing with the relocation of employees around the globe.
The second is a taxi driver. The first brother has a perfectly predictable
income (or so he thinks), with benefits, three weeks vacations, and a watch
every twenty years of employment. Every two weeks, £1082 are deposited in
his local Nat West checking account. He spends a portion of it for the
mortgage of the house west of London, the utilities, feta cheese, and has a bit
left for his savings. He used to wake up on Saturday morning anxiety free —
until the banking crisis when he realized that his job would be “made
redundant”. Unemployment would seriously hit him hard —he knows so
many persons who, laid off at the age of 50, never recovered.
George who lives in the same street as his brother, drives a black taxi —
meaning he has a license for which he spent three years memorizing streets
in London and he has the right to pick-up clients in the streets. His income is
extremely variable. Some days are “good”, he earns several hundred pounds,
some are worse, in which he does not even cover his costs, but, year after
year, he averages out about the same as his brother. To date, he has only had
a single day in his twenty-five year career without a fare. Because of the
variability of his income, he keeps moaning that he does not have the job
security of his brother — but in fact this is an illusion, for he has a bit more.
Artisans, say taxi drivers, prostitutes (a very, very old profession),
carpenters, plumbers, tailors, and dentists have some volatility in their
income but they are rather robust to a minor professional Black Swan, one
that would bring their income to a halt. Not the case with employees, who
have no volatility, then can experience their income going to zero. In fact
artisans, thanks to such variability, harbor a bit of antifragility: small little
variations make them adapt and change continuously by learning from the
environment and being, sort of, continuously under pressure to be fit. They
face continuous stressors that make them adjust opportunistically. In
addition they are open to gifts — with upside, not downside, the hallmark of
antifragility, as we will see in the next chapter. George has a crazy request
once in a while, one he is free to decline: he was once asked by a rich old lady
during a plane strike to drive her to a wedding in the South of France —a two
thousand miles round-trip journey. A prostitute faces the small probability of
a severely infatuated rich client giving her a very expensive diamond, or even
offer to marry her.
Full article here-http://www.fooledbyrandomness.com/souk.pdf
