Please Mishandle

Every once in a while a book comes along that has the potential to change everything. Books that truly make one smarter or fundamentally change the way the reader looks at the world fulfill the moniker “educational” in the truest sense. I pity the person who tries to write a book that does this for people, but thank God people try, for every once in a while they succeed.

Nassim Nicholas Taleb has succeeded in doing so. I have an altered view of the world having read his latest work, Antifragile: Things That Gain From Disorder.

Where to begin? Because Taleb is an autodidact with a staggering range of interests, the book jumps from one subject to another, leaving the reader sometimes struggling to keep up — a weakness of the book, if there is one. Reading the book, I for one was left wishing that the author had fleshed out the applications of his ideas in some areas a little bit more. But this is more a criticism of popular fiction as it exists today rather than Taleb himself. We just don’t see multivolume treatises on a subject à la Gibbon anymore. It is a sad fact.

At any rate, since this website is called the political book review, I’ll focus mainly on what the book has to say about political issues.

First, a couple of basics: what does antifragile mean? In a word, something that is antifragile gains from volatility. Since the events that truly change history are inherently unpredictable (called the “black swan” event, a rare, impossible to predict event that changes everything), we must build things with antifragility in mind. That is, we must build things that gain from the random volatility of life so that when a black swan event does occur that system will thrive. If we build systems in a way that makes them thrive on volatility, it won’t matter what we can and cannot predict.

Taleb creates a richly (and triflingly) detailed character named Fat Tony to personify antifragile thinking. Tony is an overweight New York wise-guy who makes opportunistic investments off of weaknesses he sees in the financial system. Fat Tony saw the fragility in the subprime mortgage market and made a bet that the system would fail at some point in the future, causing asset prices to crumble. He didn’t bet a lot on the prediction, which gave him little downside, but when the shock did occur, he benefitted. He gained from disorder.

Taleb calls this convexity — minimizing downside while maximizing upside. He summarizes the idea in a wonderful chart comparing fragile and antifragile concepts within the same category. I’ve provided a few below:

  • bureaucrats (fragile) vs. entrepreneurs (antifragile),
  • corporate executive (fragile) vs. artisan or artist (antifragile),
  • street fights combined with a parental library (antifragile) vs. organized sports and a soccer mom (fragile)

So what in politics is antifragile? Taleb is a huge believer in federalist systems. In the above link, he discusses his admiration for the federalist system in Germany, specifically designed so that the central government would never have the same power it had before World War II.

Thus, Taleb takes the aphorism “all politics is local”, and gives it a new theoretical underpinning: that the federal government, with all its bureaucrats, intellectuals, and consultants, is fundamentally out of touch with a lot of what is happening daily in Everytown, USA. Innovation does not come from the top down, indeed, it never has in policy or in technology. While there are times when a top-down approach is required from the federal government, a minimalist approach is nearly always the best way to employ federal power.

Why? Because local and state governments experience much greater convexity effect when it comes to implementing experimental policies: limited downside with much larger upside. When the federal government makes a move, it nearly always suffers from negative convexity. One of Taleb’s examples of negative convexity is the Iraq war — intellectuals with no “skin in the game” failed to recognize the negative convexity of that decision and the rest of the country has been left with the results (his analysis, not necessarily mine).

Another area where we are experiencing an alarming fragilizing of our political system is in our public debt. As the experience of the last five years shows, massive leveraging of public debt leaves lawmakers with few options when the black swan event occurs. How are we to face a World War II-esque global crisis if we are already facing debts nearly as high as those after that war? Debt limits the ability of the government to handle crises and thus is a fragilizing force.

This is why, as I’ve argued before, entitlement reform is the most pressing issue facing our country today, as it accounts for by far the larger share of our public debt. If we continue to make ourselves into a “mediocristan” (a place where we never face even a small amount of volatility, making ourselves weak and vulnerable to large fluctuations, the opposite of “extremistan”), the less we will be able to cope with the inevitable, unpredictable events that history shows are never too far in the future. But, as I also have argued, this will require a lot of political honesty — budget slashing isn’t the tactic that will get it done. Building antifragility into the system will take time and a whole lot of political know-how.

Possibly the greatest area of political change that Mr. Taleb advocates is in education policy. Ever the critic of the academy and all of its built-in fragilities, he advocates a much larger emphasis on apprenticeship-style education (as does Marco Rubio).

In Taleb’s words, knowledge ideally should be passed from “on doer to another.” The problem with higher education as the author sees it lies in the fact that few college professors are “doers”. Rather, they are theorists with no skin in the game who rarely see any downside for their failures. Taleb is critical of a profession that has become a competition to write papers, to get attention, to win approval (and grant funding) from the powers that be.

This breeds a competitiveness for money allocated in a top-down manner that is against the concept of the “tinkerer”, Taleb’s ideal of bottom-up innovation that was prevalent in the industrial revolution of the 19th century and the tech revolution of the 1990s. In a word, usually the most consequential ideas come from those who are free to experiment at will, rather than those competing for fame or money from the top.

Those professors who aren’t competing for grants have even less skin in the game because of the tenure system. The tenured college professor is indeed one of the textbook examples of a “fragilista”, or one who lives fragile life, or worse, makes the world more fragile for others.

Mr. Taleb sums up his views on education policy by quoting Narendra Modi:

I’d rather build a thousand high schools than one university.”

My one critique of Mr. Taleb in the political realm would be his seeming disregard for and frustration with the political process. As ugly as this process is, as fed up with it as we get, democracy will always be better than the vagaries of a dictatorship or whims of a king.

I concede that democracy is a terrible method for figuring out the single best course of action in a given situation. We should rightly leave this to people like Mr. Taleb. But it is the only way in which we can take millions of people with millions of opinions and translate it into a coherent policy. Perhaps this is one way in which it is fragile, but mischiefs of faction and tyrannies of the majority are concepts that the founding fathers did warn us about as they drafted the Constitution. Our Constitution is antifragile in so many ways, and we do it no justice when we refuse political engagement because we theorize that the system is the problem. In reality, a large share of the blame for our current partisan gridlock lies with the disengaged moderate electorate that refuses to demand more centrist, representative reforms.

I cannot help but discuss a few other topics in the book. It touches on so many areas of life, and challenges the reader to take a second look at them: diet, medicine, nature (the purest form of antifragility), parenting, philosophy, travel, business, investing, the list goes on. This is a great book not just for political thinkers, but anyone who entertains the maxim that “the unexamined life is not worth living” (Mr. Taleb has an entire chapter critiquing Socrates, an area in which I didn’t agree with him, but I’ll leave that to a philosophy blog and my own dining table conversation).

I will end wit this: Taleb shares with us a fascinating part of his intellectual biography: he reportedly did the absolute minimum to get by in school, instead spending most of his time voraciously reading anything he could get his hands on — classics in history and philosophy, literature and poetry. The autodidactic education is the only one that really matters for Taleb. Anything you truly want to know, you must study outside the school house.

This should be a challenge to all of us — take command of your own education, take command of your own community and government, and by doing this you will make the world around you that much more antifragile.

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