When I began my studies in 2008, the world was hit by a global financial crisis unlike anything we had seen since the Great Depression. As a business undergrad and passionate stock investor at the time, this event left a profound impression on me. It revealed that the systems we take for granted every day are more fragile than we realize in the face of unexpected and disruptive events. Nassim Taleb coined these events "Black Swans" in his book Black Swan (2007).
Unfortunately, since the 2008 financial crisis, we have continued to experience major unforeseen events every few years, such as the European sovereign debt crisis, Brexit, and the COVID-19 pandemic. We move from crisis to crisis, struggling to prevent our systems from falling apart. Just last week, the Russian invasion of Ukraine once again underscored the ever-present threat of crisis.
Despite the complexity of our reality, we often pretend to understand it fully. We rely heavily on our forecasts of the future, treating them as objective truths. We assume that the world operates like a giant, rational clockwork consisting of logical, predictable, and linear cause-and-effect relationships. However, this mindset leads to a structural underestimation of risk, leaving individuals, organizations, and systems vulnerable to unexpected disruptions.
As I wrote in Making the Desert Bloom, I don't believe that reality is organised in a logical or predictable fashion at all. Only our rational mind produces mechanical outcomes, nature never does. Nature is organised through complex systems. It is organic, and so are the human systems that we are part of (our organisations, society, the economy, etc.).
… Black Swans hijack our brains, making us feel we “sort of” or “almost” predicted them, because they are retrospectively explainable. We don’t realize the role of these Swans in life because of this illusion of predictability. Life is more, a lot more, labyrinthine than shown in our memory— our minds are in the business of turning history into something smooth and linear, which makes us underestimate randomness. But when we see it, we fear it and overreact. Because of this fear and thirst for order, some human systems, by disrupting the invisible or not so visible logic of things, tend to be exposed to harm from Black Swans and almost never get any benefit. You get pseudo-order when you seek order; you only get a measure of order and control when you embrace randomness.
Man-made complex systems tend to develop cascades and runaway chains of reactions that decrease, even eliminate, predictability and cause outsized events. So the modern world may be increasing in technological knowledge, but, paradoxically, it is making things a lot more unpredictable.
An annoying aspect of the Black Swan problem— in fact the central, and largely missed , point —is that the odds of rare events are simply not computable.
(Nassim Taleb, Antifragile)
So if we cannot predict the crises of the future, how can we protect ourselves against this continuous stream of disruption? Nassim Taleb also talks about this in a next book, Antifragile. Here he talks about the antidote to fragility, which he calls - surprise, surprise - antifragility. Antifragile is that, which benefits from disorder. It is typically characterised by having a low downside and a high upside. In other words if something is antifragile it has little to lose and lots to gain.
As an example Taleb speaks in his book about Seneca, who according to him lived a truly antifragile life. Seneca was a stoic philosopher and among the richest people of his time (4 BC – AD 65) . Stoic philosophy prescribes a certain indifference to fate and Seneca truly walked the talk. Despite his wealth, he argued that possessions imprison us in the fear of losing them and therefore he chose the simple life. On his journeys he would travel as if he were shipwrecked, which included a blanket to sleep on the ground.
For the stoics, being antifragile is an internal affair. It means to be (emotionally) unwavered by negative externalities. To decouple our sense of identity, self-worth and meaning from materiality and status. Nothing lasts forever, so why attach to transient affairs?
Stoic thinkers aim for harmony with nature, which is the ultimate example of antifragility. One could argue that to organise ourselves in an antifragile way is to organise ourselves like nature. Nature is flexible and full of optionality. It flows into unknown directions, continuously evolving into something new.
It teaches us that instead of resisting the perpetual disruption that is thrown at us, we should be prepared for it and surrender. After all, we cannot control our destiny. It's the very attempt of control that makes us fragile.
The stoics were joined (or maybe inspired?) by the Buddhists, Taoists and Hindus in their wisdom. The Buddhist and Hindus contemplate on the principle of impermanence. Life is like a river, always flowing, always changing.
The Taoists call this flow the Tao, which means The Way. They approach life through the principle of Wu Wei. Which means something like "non-doing" or "effortless action".
Everyone knows beauty as beauty
because they know ugliness,
knows good as good
by knowing bad.
So it goes: life and death
beget each other, hard
makes easy and vice-versa,
high and low arise by
contrast, long and short
are co-configured, sound
and silence make the music,
before and after follow
from each other.
Therefore the wise practice inaction,
teach without talking about it.
Everything comes to pass
in its time, dynamic
and unauthored, proceeding
Take what happens
naturally, go on:
no one knows how or why,
it lasts forever.
(Tao te Ching, verse 2)
The Taoists (but also the stoics, buddhists, hindus, etc) show us that when we transcend our attachments - things like gain and loss, like and dislike, good and bad – we can become truly indifferent. In this state we simply follow the Tao, the flow of life.
When we become one with the flow, life isn't happening to us anymore, we become life itself. Like a surfer becoming one with his wave. That's the antifragile approach to life.