Antifragile: Things That Gain from Disorder (33 page)

This asymmetry between the effects of good and bad, benefit and harm, had to be familiar to the ancients—I found an earlier exposition in Livy: “Men feel the good less intensely than the bad” (
segnius homines bona quam mala sentiunt
), he wrote half a generation before Seneca. Ancients—mostly thanks to Seneca—stay way ahead of modern psychologists and Triffat-style decision theorists who have developed theories around the notion of “risk (or loss) aversion,” the ancients remain deeper, more practical, while transcending vulgar therapy.

Let me rephrase it in modern terms. Take the situation in which you have a lot to lose and little to gain. If an additional quantity of wealth, say, a thousand Phoenician shekels, would not benefit you, but you would feel great harm from the loss of an equivalent amount, you have an asymmetry. And it is not a good asymmetry: you are fragile.

Seneca’s practical method to counter such fragility was to go through mental exercises to write off possessions, so when losses occurred he would not feel the sting—a way to wrest one’s freedom from circumstances. It is similar to buying an insurance contract against losses. For instance, Seneca often started his journeys with almost the same belongings he would have if he were shipwrecked, which included a blanket to sleep on the ground, as inns were sparse at the time (though I need to qualify, to set things in the context of the day, that he had accompanying him “only one or two slaves”).

To show how eminently modern this is, I will next reveal how I’ve applied this brand of Stoicism to wrest back psychological control of the randomness of life. I have always hated employment and the associated dependence on someone else’s arbitrary opinion, particularly when much of what’s done inside large corporations violates my sense of ethics. So I have, accordingly, except for eight years, been self-employed. But, before that, for my last job, I wrote my resignation letter before starting the new position, locked it up in a drawer, and felt free while I was there. Likewise, when I was a trader, a profession rife with a high dose of randomness, with continuous psychological harm that drills deep into one’s soul, I would go through the mental exercise of assuming every morning that the worst possible thing had actually happened—the rest of the day would be a bonus. Actually the method of mentally adjusting “to the worst” had advantages way beyond the therapeutic, as it made me take a certain class of risks for which the worst case is clear and unambiguous, with limited and known downside. It is hard to stick to a good discipline of mental write-off when things are going well, yet
that’s when one needs the discipline the most. Moreover, once in a while, I travel, Seneca-style, in uncomfortable circumstances (though unlike him I am not accompanied by “one or two” slaves).

An intelligent life is all about such emotional positioning to eliminate the sting of harm, which as we saw is done by mentally writing off belongings so one does not feel any pain from losses. The volatility of the world no longer affects you negatively.

Seen this way, Stoicism is about the domestication, not necessarily the elimination, of emotions. It is not about turning humans into vegetables. My idea of the modern Stoic sage is
someone who transforms fear into prudence, pain into information, mistakes into initiation, and desire into undertaking
.

Seneca proposes a complete training program to handle life and use emotions properly—thanks to small but effective tricks. One trick, for instance, that a Roman Stoic would use to separate anger from rightful action and avoid committing harm he would regret later would be to wait at least a day before beating up a servant who committed a violation. We moderns might not see this as particularly righteous, but just compare it to the otherwise thoughtful Emperor Hadrian’s act of stabbing a slave in the eye during an episode of uncontrolled anger. When Hadrian’s anger abated, and he felt the grip of remorse, the damage was irreversible.

Seneca also provides us a catalogue of social deeds: invest in good actions. Things can be taken away from us—not good deeds and acts of virtue.

So far, that story is well known, and we have learned to move from the left of the Triad (fragile) to the center (robust). But Seneca went beyond.

He said that wealth is the slave of the wise man and master of the fool. Thus he broke a bit with the purported Stoic habit:
he kept the upside
. In my opinion, if previous Stoics claimed to prefer poverty to wealth, we need to be suspicious of their attitude, as it may be just all talk. Since most were poor, they might have fit a narrative to the circumstances (we will see with the story of Thales of Miletus the notion of
sour grapes—cognitive games to make yourself believe that the grapes that you can’t reach taste sour). Seneca was all deeds, and we cannot ignore the fact that he kept the wealth. It is central that he showed his preference of wealth
without harm from wealth
to poverty.

Seneca even outlined his strategy in
De beneficiis,
explicitly calling it a cost-benefit analysis by using the word “bookkeeping”: “The bookkeeping of benefits is simple: it is all expenditure; if any one returns it, that is clear
gain
(my emphasis); if he does not return it, it is not lost, I gave it for the sake of giving.” Moral bookkeeping, but bookkeeping nevertheless.

So he played a trick on fate: kept the good and ditched the bad; cut the downside and kept the upside. Self-servingly, that is, by eliminating the harm from fate and un-philosophically keeping the upside. This cost-benefit analysis is not quite Stoicism in the way people understand the meaning of Stoicism (people who study Stoicism seem to want Seneca and other Stoics to think like those who study Stoicism). There is an upside-downside asymmetry.

That’s antifragility in its purest form.
²

Let us put together Seneca’s asymmetry in a single rule.

The concept I used earlier is
more to lose
from adversity. If you have more to lose than to benefit from events of fate, there is an asymmetry, and not a good one. And such asymmetry is universal. Let us see how it brings us to fragility.

Consider the package in
Chapter 1
: it does not like to be shaken, and it hates the members of the disorder family—hence it is fragile (very fragile because it has absolutely nothing to gain, hence it is very asymmetric). The antifragile package has more to gain than to lose from being shaken. Simple test: if I have “nothing to lose” then it is all gain and I am antifragile.

The entire
Table 1
with triads across fields and domains can be explained in these terms. Everything.

To see why asymmetric payoffs like volatility, just consider that if
you have less to lose than to gain, more upside than downside, then you like volatility (it will, on balance, bring benefits), and you are also antifragile.

So the job falling upon this author is to make the link between the four elements as follows with the foundational asymmetry.

and

You are antifragile for a source of volatility if potential gains exceed potential losses (and vice versa).

Further, if you have more upside than downside, then you may be harmed by lack of volatility and stressors.

Now, how do we put this idea—reduction of downside, increase in upside—into practice? By the method of the barbell in the next chapter.

CHAPTER 11
 

The barbell (or bimodal) strategy is a way to achieve antifragility and move to the right side of the Triad. Monogamous birds put it into practice by cheating with the local rock star and writers do better by having as a day job a sinecure devoid of writing activities.

The first step toward antifragility consists in first decreasing downside, rather than increasing upside; that is, by lowering exposure to negative Black Swans and letting natural antifragility work by itself.

Mitigating fragility is not an option but a requirement. It may sound obvious but the point seems to be missed. For fragility is very punishing, like a terminal disease. A package doesn’t break under adverse conditions, then manage to fix itself when proper conditions are restored. Fragility has a ratchetlike property, the irreversibility of damage. What matters is the route taken, the order of events, not just the destination—what scientists call a
path-dependent
property. Path dependence can be illustrated as follows: your experience in getting a kidney stone operation first and anesthesia later is different from having the
procedures done in the opposite sequence. Or your enjoyment of a meal with coffee and dessert first and tomato soup last would not be the same as the inverse order. The consideration of path dependence makes our approach simple: it is easy to identify the fragile and put it in the left column of the Triad, regardless of upside potential—since the broken will tend to stay permanently broken.

This fragility that comes from path dependence is often ignored by businessmen who, trained in static thinking, tend to believe that generating profits is their principal mission, with survival and risk control something to perhaps consider—they miss the strong logical precedence of survival over success. To make profits and buy a BMW, it would be a good idea to, first, survive.

Notions such as speed and growth—anything related to movement—are empty and meaningless when presented without accounting for fragility. Consider that someone driving two hundred and fifty miles per hour in New York City is quite certain to never get anywhere—the effective speed will be exactly zero miles per hour. While it is obvious that one needs to focus on the effective, not the nominal, speed, something in the sociopolitical discourse masks such an elementary point.

Under path dependence, one can no longer separate growth in the economy from risks of recession, financial returns from risks of terminal losses, and “efficiency” from danger of accident. The notion of efficiency becomes quite meaningless on its own. If a gambler has a risk of terminal blowup (losing back everything), the “potential returns” of his strategy are totally inconsequential. A few years ago, a university fellow boasted to me that their endowment fund was earning 20 percent or so, not realizing that these returns were associated with fragilities that would easily turn into catastrophic losses—sure enough, a bad year wiped out all these returns and endangered the university.

In other words, if something is fragile, its risk of breaking makes anything you do to improve it or make it “efficient” inconsequential unless you first reduce that risk of breaking. As Publilius Syrus wrote, nothing can be done both hastily and safely—almost nothing.