Highly recommended: Antifragile

Nassim Taleb’s last book The Black Swan, carried forward his analysis begun in his first book Fooled by Randomness. The essence of his argument in these first two books is that most statisticians and those who use their products and models, like economists, corporate planners, policy makers and Wall Street "quants", don’t really understand the nature of random events. In particular, they have no way of accurately predicting rare, unanticipated and unexpected events (those way out on the tails of a normal distribution), and so typically discount them, or ignore them entirely in their predictions and models. The result is that they generally fail to anticipate the most severe dislocations and crises – the “Black Swans” –  that show up from time to time to disrupt the economy, the environment, and civilizations.

Taleb’s latest book, Antifragile, carries this argument to its conclusion by asserting that in fact one cannot predict many things in life (despite the pompous assertions of those who make a living by pretending to), and so the most durable systems are those that are designed not only to react to unexpected events, but to thrive on them and improve because of them – the evolution of living things being a prime example of such a system.  If one looks at most aspects of our current wonderful, complex, highly integrated and interdependent civilization from this point of view, we are setting ourselves up for disastrous crises. The very policies we pursue from the best of motives to maintain stability are in fact setting us up for eventual (and unexpected) massive instability. This is not a new idea - engineers have known for a long time that reducing the variability in a feedback system leads to instability -- variability is information, and if one reduces it one also reduces the information needed to keep the system stable.  But Taleb expands this idea, profitably, to whole new domains.

This book reads like a trip through the Lebanese souks of Taleb’s childhood – wandering from one exotic subject to another but always tied to the central theme, with the odor of Taleb’s disdain for those who profess to predict the future permeating everything. There are profound and important ideas in this book.  Many will read this book, some will understand it, but I would guess few if any will heed its warnings or apply its principles in time.

More’s the pity.