Dealing Wild Cards in the Arena

“The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again”, Roosevelt: Citizenship in a Republic

Nassim Nicholas Taleb is arguably one of the most thought-provoking thought leaders of the moment. His book The Black Swan, published in 2007, spent 36 weeks on the New York Times Best-seller list, has been translated into 31 languages and has sold about 3 million copies as of today. The book has been credited with predicting the banking and economic crisis of 2008. In a review by Sunday Times, it was described as one of the twelve most influential books since World War II. Now Taleb comes with a sequel: Antifragile(1)

I’ve only had one master idea, each time taken to its next step, the last step —this book

The name is by no means appealing, and I would bet that it won’t last, but the concept itself is really worth understanding and lasting because it points directly to the weaknesses of our present techno-sophisticated world and how to cope with them. Taleb’s point is that some things benefit from shocks. They thrive and grow when exposed to volatility, randomness, uncertainty, disorder and all kinds of stressors. He emphasizes that, in spite the ubiquity of the phenomenon, there seems to be no word for the exact opposite of fragile.

The concept is not entirely new. The idea of resilience has been around in systems thinking since the ’70s, when Buzz Holling introduced it to describe the persistence of natural systems in the face of changes. However, while the emphasis of resilience is on the ability to absorb disturbances keeping the same identity; anti-fragility goes a step further to stress the capability of certain systems to fully benefit from shocks, like the Hydra who gets two heads each time one is cut off.

Antifragility requires systems to ‘tinker’, i.e. to creatively respond to changes in their environment. An obvious example is natural selection-driven evolution. In many of its features, life appears to share this property with the Hydra: challenged, it responds by creating new forms of life. According to Taleb, anti-fragility is behind everything that has changed with time: evolution, culture, ideas, revolutions, political systems, technological innovation cultural and economic success, corporate survival, good food recipes, the rise of cities, cultures, legal systems, equatorial forests, bacterial resistance, etc.

Why is this idea important? Because it implies a fundamental change of perspective in the way we look at our vested interests versus our opportunities. It forces us to think of alternatives, in creating options, instead of focusing on preservation. In a recent interview for Slate, Arizona State professor Sander van der Leeuw says:

I think one of the real difficulties of our current society is that we are so heavily invested in particular ways of doing things, because we’ve been doing them for a very long time and because we have invested huge amounts of capital in creating a particular infrastructure, and that decreases our possibility to conceive or create other options for ourselves. It basically reduces our resilience. (…) We actually train our kids in school into non-resilient thinking, because we always come up with single solutions, single options. We don’t train people to think in terms of alternatives. And that, after a while, creates a society that actually is fairly single-minded (Slate, “What’s the Big Deal About Resilience?”)

The normal attitude toward risk is risk measurement and risk mitigation. However risk is barely measurable. According to Taleb, only some economists and other lunatics can claim to “measure” the future incidence of rare events. Fragility could be defined as what does not like volatility. Fragility can be measured. Hence concentrating on fragility instead of risk, could provide a solution to what Taleb calls the Black Swan problem: the extreme impact of certain kinds of rare and unpredictable events.

Although Taleb is famous for his Black Swans, they are hardly new. A similar concept in futurology, wild cards, was first introduced as part of a business study in 1992. The idea gained wide acceptance after John L. Petersen extended it to social systems, and his definition is now widely accepted:

A Wild Card is a low-probability, high impact event that is so large and/or arrives so fast that social systems are not able to effectively respond to it

The threat of wild cards (or black swans) might be increasing as we move away from ancestral and natural models. Technological knowledge is increasing and, paradoxically, it is making things a lot more unpredictable.

Many people think that the world functions thanks to programmed design, university research, and bureaucratic funding, but according to Taleb, this is an illusion: the “Soviet-Harvard delusion” or the unscientific overestimation of the reach of scientific knowledge. The record shows that it is better to be dumb and anti-fragile than smart and fragile. Discovery, innovation and technological progress depend on anti-fragile tinkering and aggressive risk bearing.

Contrary to what people believe, a complex system does not require complicated regulations and intricate policies. Less is more and usually more effective, though not necessarily easy. Yet simplicity is not the norm in modern life because it is against the spirit of a certain brand of people who seek sophistication as a way to justify their profession: the “Fragilista”. In Taleb’s words, a fragilista is one who makes you engage in policies and actions, all artificial, in which the benefits are small and visible, and the side effects potentially severe and invisible.

As the Romans did when they forced engineers to sleep under a bridge once it was completed, Taleb cries for an ethics which precludes the largest “fragilizer” of society, the greatest generator of crises: the absence of “skin in the game”. Only practitioners, people who do things, tend to spontaneously get the point. Only the man in the arena must be given a chance:

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(1) Antifragile will be released on November 27, 2012. For some time, Taleb made available a “Prologue” with the following disclaimer: “THIS IS AN UNEDITED SAMPLE TEXT. IT CANNOT BE CITED IN ITS PRESENT FORM AND CANNOT BE DISSEMINATED WITHOUT EXPLICIT PERMISSION.” This post builds on my particular reading of this prologue, and I have kept Taleb’s funny “terminology”. However, the content is exclusively my own responsibility.

Featured Image: Combat of Gladiators with Animals, D. Rose, Edited by H. W. Dulcken: “A Popular History of Rome” (1886)

3 comments

  1. […] Can complexity thinking help? Steve Denning thinks that complexity scientists have managed to create high expectations but they have failed to deliver, and he points to three specific examples of actual management expertise for dealing with complexity: agile software development, the US military mission command, and the emerging discipline of anti-fragility. […]

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