An Antifragile Life: Paradigm and Principles
The undergirding principles of an antifragile life.
Now that we’ve flown over the top of the paradigm, let’s dig into some of the undergirding principles of an antifragile life.
The principle of ergodicity
This means that some risks are totally unlike other risks. Ergodicity is where, if the downside happens, you’re out of the game entirely. So, reckless driving is a kind of risk where one slip up means you’ll never drive, or possibly never even breathe, again. Some domains in life are like this; financial ruin, for instance, is a kind of ‘game over’, as is severe ill health. But in other domains, risk is far more beneficial. Exercise and activity are good ‘risks’. Investing in high risk stocks, when you have a significant financial margin and buffer already in place (look out for our upcoming financial checklist) is a good risk. A good risk is where a win will benefit you, but a loss won’t really harm you. A bad risk tends to involve ergodicity – a win won’t really benefit you, and a loss will ruin you. Think of people who get a thrill from running across the street in front of moving traffic, just to get 3 seconds ahead.
The principle of acceleration of harm or benefit
If something is harmed by uncertainty, it’s fragile. If it is more harmed by more uncertainty, it’s more fragile: fragility is measured by the ‘acceleration of harm’. Example: a glass ornament outside on a windy day. The windier it is, the more rapidly and completely the ornament will be destroyed.
Conversely, if something is helped by uncertainty, it’s antifragile. If it is more helped by more uncertainty, it’s more antifragile: antifragility is measured by the ‘acceleration of benefit’. Example: workouts. The more variety and uncertainty, the greater the adaptive response.
As we’ll see, building antifragile checklists is all about creating basic ‘barbell’ structures (see below) where you are simultaneously limiting the acceleration of harm and capturing the acceleration of benefit.
The principle of non-linearity
This principle, quite frankly, helps you to understand why we can never understand life. Life is a complex system, an immense non-linear system.
A linear system is one in which cause and effect are predictable and reliable. Variables can be measured, and thus a change in one variable will predictably result in a change in another variable. You can boil linear systems down to satisfying equations. One major fallacy all around us is people treating the world as if it is a linear system. For instance, believing they can predict politics, economics, or weather systems as if they are simple in-out mechanisms. Engineers love linear systems; you can design a mechanism where a force of N results in an output O. Increase the N, you get an output of O times some number.
But a non-linear system has several variables which interlock and inter-relate. For instance, the traffic on the road at 8.30am on Monday behaves differently to 3am on a Sunday. Or even to 8.40am that same Monday. There are thousands of variables – the individual cars and their drivers, each interrelating in unpredictable ways.
The point is that non-linear systems, by definition, can’t be predicted. Features emerge (the dynamic is called ‘emergence’ as characteristics become apparent from a complex non-linear system). You can describe, retrospectively, the trends of voters in a general election. But ahead of time you simply can’t repeatedly predict what will happen.
For an antifragile life, we need to recognise non-linearities all around us. And to distinguish fragile and antifragile ways to operate within non-linear systems. Pleasingly, you’ll see that the same handful of strategies enable you to operate and win within pretty much any complex, non-linear system. This is the skill of knowing how to live in a world we can’t understand.
To speak technically, we can say this: Is avg f(x) greater than f(avg x)? Then it’s non-linear (whether antifragile or fragile). For instance, there is a difference between the average return on investment for a stock, and the return on investment of an average stock.
One tremendously helpful question to remember is this: What is assumed to be constant/predictable, when really it's dynamic or even random, and thus vulnerable to black swan tail effects (tail effects being the highly unlikely and unpredicted events)?
The principle of bottom-up versus top-down structures
The things which last the test of time are things which were built from the bottom up. Top-down structures, no matter how apparently strong or invincible, eventually crumble. This is fundamentally because bottom-up means being formed in the context of the actual real world. It means being fit for purpose by design, and constantly moulded and tinkered with as things change. By contrast, top-down systems must expend immense energy keeping things under control, or by inefficiently needing (repeatedly) to change, overhaul, and adapt.
Bottom-up systems tend to be far simpler and far more efficient. In practice, this has the pleasant implication for starting things; the best way to start something is just to start, and not to worry about buying or building some system to help you. Start, and create the structures you need as you go along. Sometimes this is called the principle of ‘minimum required bureaucracy’.
The principle of the barbell
Once you understand barbell strategies you have the quickest way to thinking about antifragility in pretty much any domain.
A barbell, as you can find in most gyms, is simply a bar with a way of holding weighted plates at each end. So you have weights on one end, weights on the other end, and in the middle nothing at all. The lifted will hold the bar somewhere in the middle. So we have an image of things at two extremes, and nothing in between. That’s a barbell strategy.
Unlike a weightlifter, the antifragilista weights their bar very unevenly. In fact, we aim for 90% at one end and 10% at the other. 90% weighting towards extremely conservative, almost paranoid, strategies. And 10% towards extremely risky, adventurous, aggressive strategies. This way, the bulk of your strategy protects you from misfortune, while the 10% gets you those incredible breakthroughs and perks which come from taking risks.
We’ve structured all the checklists in this publication around the 90/10 split barbell. You’ll find as we go on that we have specific sub-categories for how to think about both the 90% and the 10%.
To speak more technically, we can say this: Be hyper-conservative (remove all risk possible) and hyper-aggressive (enjoying/pursue high risk) at the same time. Identify the undesirable/unfavourable f(x), and find a way to remove, clip, or insure against it, and you have a barbell.
The principle of via negativa, and rules of thumb
‘Via negativa’ means a ‘negative way’. In other words, it’s negative advice; advice about what not to do. Famously, Warren Buffet said that rule number 1 of investing is ‘don’t lost money’, and rule 2 is ‘don’t forget rule 1’. That’s an example of via negativa.
Via negativas can seem extremely boring or obvious. But they are rarely followed. They belong centrally in our antifragile toolkit since they enable us to build a strong 90% side of our barbell. After all, if we can manage to protect ourselves from the downsides, then all that’s left is upsides.
Similarly, ‘rules of thumb’ are principles in practice which can be reduced down to a memorable phrase. Tried and trusted ‘rules’ for how to make decisions or act. The point is, they’re bottom-up, since they’re forged in the actual course of life. So we attend carefully to them. ‘Never lose money’ is clearly a simple but vital rule of thumb.
Have you noticed by now that a clear understanding of antifragility helps us to unify various pieces of received wisdom, such as:
“Amateurs practise until they can get it right; professionals practise until they can’t get it wrong.”
“Plan for the worst, hope for the best”
“Better to have, and not need, than to need and not have”
By reflecting on these undergirding principles of antifragility, we’re now extremely well placed to think about virtually any domain of life in relation to this question: how can we benefit from chaos and complexity? That, after all, is the reason we made this publication. Antifragility leads to a simpler, smarter life with both more ease and more exhiliration.