During a recent flight to Europe for business, I was provided with the time and opportunity to read Nassim Nicholas Talebs latest book Antifragial. If you aren’t familiar with Taleb’s work, he is best known for his writings titled The “Black Swan” and “Fooled by Randomness“. Having read both of these (as well as his other lesser known titles), I was not surprised when Antifragial fell into line with these prior works which all focus on the concept of randomness and the need to embrace the unknown rather than trying to explain it away. As Taleb attempts to make the point that all the systems we create are in fact “fragile” systems prone to failure yet we act surprised when they do fail as we have convinced ourselves (falsely in his view) that we understand the risk in these systems.
One of the primary examples he makes is Wall Street and the meltdown we saw in 2007/2008. Here he points out we thought we knew it all with our complex mathematical models and back rooms full of quants with their super computers. Yet even with all of this, how is it possible the event could have even occurred?
This is where Taleb points out to the reader that we will never know what we don’t know until we know it (i.e. until it actually happens). So his basic summation is why waste the efforts of attempting analytical reductions of the risks if we will be simply lying to ourselves, or so Taleb attempts to convince us through a constant stream of (implied) facts.
While there is a “truth” to this, it reminds me of the “chicken and the egg” debate as each side can be an equally valid argument logically. The same to me holds true for risk modeling, as yes there is always a “long tail” to risk meaning an extremely small calculated risk can lead to an amazingly large impact. However to not know the “short tail” risks seems irresponsible to me also.
For me the missing piece of the puzzle is the ability for “man” to lie to him/her self and believe the lie as reality. There is something buried in our primordial minds which allows us to believe in false economies provided by statistics as numbers don’t lie right? Well the one thing we forget when we say that is “man” does [lie] and especially to himself.
Yet concept aside, the writing of the book is near poetic in frame and far better than prior works which were cumbersome and jerky. Believe that this is due to a second writer cleaning up Taleb’s thoughts into cleaner pose than in his prior tomes. This makes for a much more enjoyable read as Taleb tosses (his perceived) facts at the reader in what seems to be at jeopardy lighting round speed.
While I don’t buy into all of Taleb’s arguments, the basics of randomness is an interesting study, Taleb places a lot of information in the users hands for consideration. From here the reader can make up their own mind as what to accept and not. In short, if the unknown is of interest and you don’t mind a bit of one sided ranting, than this book is for you…