Antifragile: Things That Gain from Disorder (40 page)

Likewise “lack of vigilance” is often proposed as the cause of an error (as we will see with the Société Générale story in
Book V
, the cause was size and fragility). But lack of vigilance is not the cause of the death of a mafia don; the cause of death is making enemies, and the cure is making friends.

We can dig out epiphenomena in the cultural discourse and consciousness by looking at the sequence of events and checking whether one always precedes the other. This is a method refined by the late Clive Granger (himself a refined gentleman), a well-deserved “Nobel” in Economics, that Bank of Sweden (Sveriges Riksbank) prize in honor of Alfred Nobel that has been given to a large number of fragilistas. It is the only rigorously scientific technique that philosophers of science can use to establish causation, as they can now extract, if not measure, the
so-called “Granger cause” by looking at sequences. In epiphenomenal situations, you end up seeing A and B together. But if you refine your analysis by considering the sequence, thus introducing a time dimension—which takes place first, A or B?—and analyze evidence, then you will see if truly A causes B.

Further, Granger had the great idea of studying differences, that is,
changes
in A and B, not just levels of A and B. While I do not believe that Granger’s method can lead me to believe that “A causes B” with certainty, it can most certainly help me debunk fake causation, and allow me to make the claim that “the statement that B causes A is wrong” or has insufficient evidence from the sequence.

The important difference between theory and practice lies precisely in the detection of the sequence of events and retaining the sequence in memory. If life is lived forward but remembered backward, as Kierkegaard observed, then books exacerbate this effect—our own memories, learning, and instinct have sequences in them. Someone standing today looking at events
without having lived them
would be inclined to develop illusions of causality, mostly from being mixed-up by the sequence of events. In real life, in spite of all the biases, we do not have the same number of asynchronies that appear to the student of history. Nasty history, full of lies, full of biases!

For one example of a trick for debunking causality: I am not even dead yet, but am already seeing distortions about my work. Authors theorize about some ancestry of my ideas, as if people read books then developed ideas, not wondering whether perhaps it is the other way around; people look for books that support their mental program. So one journalist (Anatole Kaletsky) saw the influence of Benoît Mandelbrot on my book
Fooled by Randomness,
published in 2001 when I did not know who Mandelbrot was. It is simple: the journalist noticed similarities of thought in one type of domain, and seniority of age, and immediately drew the false inference. He did not consider that like-minded people are inclined to hang together and that such intellectual similarity caused the relationship rather than the reverse. This makes me suspicious of the master-pupil relationships we read about in cultural history: about all the people that have been called my pupils have been my pupils because we were like-minded.

Consider the tourist brochures used by countries to advertise their wares: you can expect that the pictures presented to you will look much, much better than anything you will encounter in the place. And the bias, the difference (for which humans correct, thanks to common sense), can be measured as
the country shown in the tourist brochure
minus
the country seen with your naked eyes
. That difference can be small, or large. We also make such corrections with commercial products, not overly trusting advertising.

But we don’t correct for the difference in science, medicine, and mathematics, for the same reasons we didn’t pay attention to iatrogenics. We are suckers for the sophisticated.

In institutional research, one can selectively report facts that confirm one’s story, without revealing facts that disprove it or don’t apply to it—so the public perception of science is biased into believing in the necessity of the highly conceptualized, crisp, and purified Harvardized methods. And statistical research tends to be marred with this one-sidedness. Another reason one should trust the disconfirmatory more than the confirmatory.

Academia is well equipped to tell us what it did for us, not what it did not—hence how indispensable its methods are. This ranges across many things in life. Traders talk about their successes, so one is led to believe that they are intelligent—not looking at the hidden failures. As to academic science: a few years ago, the great Anglo-Lebanese mathematician Michael Atiyah of string theory fame came to New York to raise funds for a research center in mathematics based in Lebanon. In his speech, he enumerated applications in which mathematics turned out to be useful for society and modern life, such as traffic signaling. Fine. But what about areas where mathematics led us to disaster (as in, say, economics or finance, where it blew up the system)? And how about areas out of the reach of mathematics? I thought right there of a different project: a catalog of where mathematics fails to produce results, hence causes harm.

Cherry-picking has optionality: the one telling the story (and publishing it) has the advantage of being able to show the confirmatory examples and completely ignore the rest—and the more volatility and dispersion, the rosier the best story will be (and the darker the worst story). Someone with optionality—the right to pick and choose his
story—is only reporting on what suits his purpose. You take the upside of your story and hide the downside, so only the sensational seems to count.

The real world relies on the intelligence of antifragility, but no university would swallow that—just as interventionists don’t accept that things can improve without their intervention. Let us return to the idea that universities generate wealth and the growth of useful knowledge in society. There is a causal illusion here; time to bust it.

CHAPTER 14
 

I am writing these lines in an appropriate place to think about the arrow of knowledge: Abu Dhabi, a city that sprang out of the desert, as if watered by oil.

It makes me queasy to see the building of these huge universities, funded by the oil revenues of governments, under the postulation that oil reserves can be turned into knowledge by hiring professors from prestigious universities and putting their kids through school (or, as is the case, waiting for their kids to feel the desire to go to school, as many students in Abu Dhabi are from Bulgaria, Serbia, or Macedonia getting a free education). Even better, they can, with a single check, import an entire school from overseas, such as the Sorbonne and New York University (among many more). So, in a few years, members of this society will be reaping the benefits of a great technological improvement.

It would seem a reasonable investment if one accepts the notion that
university knowledge generates economic wealth
. But this is a belief that comes more from superstition than empiricism. Remember the story of Switzerland in
Chapter 5
—a place with a very low level of formal education. I wonder if my nausea comes from the feeling that these desert tribes are being separated from their money by the establishment that
has been sucking dry their resources and diverting them to administrators from Western universities. Their wealth came from oil, not from some vocational know-how, so I am certain that their spending on education is completely sterile and a great transfer of resources (rather than milking antifragility by forcing their citizens to make money naturally, through circumstances).

There is something that escapes the Abu Dhabi model. Where are the stressors?

Recall the quote by Seneca and Ovid to the effect that sophistication is born of need, and success of difficulties—in fact many such variations, sourced in medieval days (such as
necessitas magistra
in Erasmus), found their way into our daily vernaculars, as in “necessity is the mother of invention.” The best is, as usual, from the master aphorist Publilius Syrus: “poverty makes experiences” (
hominem experiri multa paupertas iubet
). But the expression and idea appear in one form or another in so many classical writers, including Euripides, Pseudo-Theoctitus, Plautus, Apuleus, Zenobius, Juvenal, and of course it is now labeled “post-traumatic growth.”

I saw ancient wisdom at work in the exact opposite of the situation in Abu Dhabi. My Levantine village of origin, Amioun, was pillaged and evacuated during the war, sending its inhabitants into exile across the planet. Twenty-five years later, it became opulent, having bounced back with a vengeance: my own house, dynamited, is now
bigger
than the previous version. My father, showing me the multiplication of villas in the countryside while bemoaning these nouveaux riches, calmly told me, “You, too, had you stayed here, would have become a beach bum. People from Amioun only do well when shaken.” That’s antifragility.

Now let’s look at evidence of the direction of the causal arrow, that is, whether it is true that lecture-driven knowledge leads to prosperity. Serious empirical investigation (largely thanks to one Lant Pritchet, then a World Bank economist) shows no evidence that raising the general level of education raises income at the level of a country. But we know the opposite is true, that wealth leads to the rise of education—not an optical
illusion. We don’t need to resort to the World Bank figures, we could derive this from an armchair. Let us figure out the direction of the arrow:

or

And the evidence is so easy to check, just lying out there in front of us. It can be obtained by looking at countries that are both wealthy and have some level of education and considering which condition preceded the other. Take the following potent and
less-is-more
-style argument by the rogue economist Ha-Joon Chang. In 1960 Taiwan had a much lower literacy rate than the Philippines and half the income per person; today Taiwan has ten times the income. At the same time, Korea had a much lower literacy rate than Argentina (which had one of the highest in the world) and about one-fifth the income per person; today it has three times as much. Further, over the same period, sub-Saharan Africa saw markedly increasing literacy rates, accompanied with a decrease in their standard of living. We can multiply the examples (Pritchet’s study is quite thorough), but I wonder why people don’t realize the simple truism, that is, the
fooled by randomness
effect: mistaking the merely associative for the causal, that is, if rich countries are educated, immediately inferring that education makes a country rich, without even checking. Epiphenomenon here again. (The error in reasoning is a bit from wishful thinking, because education is considered “good”; I wonder why people don’t make the epiphenomenal association between the wealth of a country and something “bad,” say, decadence, and infer that decadence, or some other disease of wealth like a high suicide rate, also generates wealth.)