[Antifragile - Things that gain from disorder] favorite parts

Stressors are information

Errors and their consequences are information; for small children, pain is the only risk management information. For complex systems are, well, all about information.

Antifragility for one is fragility for someone else.

Some parts on the inside of a system may be required to be fragile in order to make the system antifragile as a result

 

ANTIFRAGILE is the combination of aggressiveness plus paranoia- clip your downside, protect yourself from extreme harm, and let the upside, the positive blackswan, take care of itself.

 

Anything that has more upside than downside from random events ( or certain shocks) is antifragile.

 

Thank you, errors

When you are fragile, you depend on things following the exact planned course, with as little deviation as possible- for deviations are more harmful than helpful. This is why the fragile needs to be very predictive in its approach, and, conversely, predictive systems cause fragility. When you want deviations, and you don't care about the possible dispersion of outcomes that the future can bring, since most will be helpful, you are antifragile.

 

Learning from mistakes of others

Some, not all, errors; those that do not destroy a system help prevent larger calamities. The engineer and historian of engineering Henry Petroski presents a very elegant point. Had the Titanic not had that famous accident, as fatal as it was, we would have kept building larger and larger ocean liners and the next disaster would have been even more tragic. The story of the Titanic illustrates the difference between gains for the system and harm to some of its individual parts.

 

Some businesses love their own mistakes. All they need is to keep their mistakes small enough so they can survive them.

 

National Entreupreneur Day

Entrepreneurship is a risky and heroic activity, necessary for growth or even the mere survival of the economy.

In order to progress, morden society should be treating ruined entrepreneurs in the same way we honor dead soldiers, perhaps not with as much honor, but using exactly the same logic. For there is no such thing as failed soldiers, dead or alive- likewise, there is not thing as a failed entrepreneur or failed scientific researcher.

We should have a National Entrepreneur Day, with the following message:

Most of you will fail, disrespected, impoverished, but we are grategful for the risks you are taking and the sacrifices you are making for the sake of the economic growth of the planet and pulling others out of poverty. You are at the source of our antifrality. Our nation thanks you.

Good system VS bad system

Good system: small errors, independent from each other-or, in effect, negatively correlated to each other since mistakes lower the odds of future mistatkes -> Antifragile

The more variability you observe in a system, the less black swan prone it is.

When some systems are stuck in a dangerous impase, randomness and only randomness can unlock them & set them free.

From chaos to order, did not take place by removing chaos, but by adding random, completely random but low-intensity shock

If I have 'nothing to lose' then it is all gain and I am antifragile.

 

* If you have less to lose than to gain, more upside than downside, then you like volatility( it will, on balance, bring benefits),a nd you are also antifragile.

* Barbell: Extreme risk aversion on one side and extreme risk loving on the other side, rather than just the 'medium' or the beastly 'moderate' risk:

90% boring cash

10% very, maximum risky

=> You can not possibly lose more than 10% while you are exposed to massive upside

VS

100% so-called 'medium risk' securities -> has risk of total ruin from the miscomputation risks.

Theory should stay independent from practice and vice-versa, and we should not extract acadamic economists from their campuses and put them in positions of decision making.

Economic is not a science and should not be there to advise policy.

Antifragile risk taking: not education and formal, organized research- is largely responsible for innovation and growth.

We are fooled by randomness, so we are fooled into overestimating the role of good-sounding idea.