Why being resilient is not enough — Antifragility
Routines and plans can get us far. They work well. Until they don't. A substantial part of life consists of disruptive events. Chaos. Situations, we cannot predict, that cause our carefully cultivated routines and refined plans to collapse like a house of cards.
Paradoxically, the more sophisticated our plan, the deeper we descend into chaos, once we encounter such situations.
Fortunately, there is a concept, that can help us to not only deal with such situations but profit from them. The concept of Antifragility.
Nassim Nicholas Taleb, a former option trader now well known in the realm of risk management, coined this term after realising that our society seems to lack an appropriate way of describing the opposite of fragility.
In everyday life, we consider things to be fragile or robust. Fragile things dislike uncertainty and chaos because they break under harsh conditions. If you send them in a box, you label it “Handle with care. Fragile!”.
The robust can take some hits before it breaks. Then, with psychology focusing more on resources and less on deficits in recent years, we may have heard of resilience. In material science, resilience describes the characteristic of a material to bend under pressure and then return into its original shape unharmed. While the robust may accumulate some cracks over time, the resilient preserves its integrity. Now, what do we write on the box of robust and resilient things?
Nothing.
They don't care about chaos and uncertainty. They don't get harmed, but they won't improve either. Therefore, we should not consider them the opposite of fragility–which gets harmed by chaos and uncertainty.
An important Distinction
Maybe because of a lack of better concepts in our language, we tend to think of ourselves as fragile, robust or resilient. We may or may not have confidence that we can handle rough situations. Still, hardly ever do we consider painful or uncertain situations in our life as an opportunity to improve how we live, not despite but because they are hard. The consequences are profound.
I would argue that there are hardly any things in life that limit us more than loss aversion.
Loss aversion refers to a cognitive bias in which the same situation is perceived as worse if it is framed as a loss, rather than a gain.
If you ask people if they want to participate in a game with a 50/50 Chance of losing €100 and winning €110, most would rather not take part.
We tend to value loss as more impactful than gain. In everyday life, the chances are often even more in our favour. Still, we are likely to avoid loss at too high of a cost.
Last week, I moved into a new flat. To move my furniture, I had to drive a six-meter-long transporter after hardly driving any car over the last three years. I was quite stressed about it. If I had the choice, I would have rather not done it.
That would have been a poor decision. The most I could have lost driving the transporter was the €1.100 Co-Payment of the car insurance. Now, what I gained driving the transporter vastly outweighs this potential loss. Self-efficacy.
I can now regard myself as someone who can drive big cars if he has to. Furthermore, I stacked some proof, that I can function well in situations of uncertainty. If I am not thoroughly prepared, that's fine because I can do it anyway.
If you do this in one situation, it will not be life-changing. If you handle most of your uncertain situations this way, that's a radically different way of living. That's freedom. Some situations will go bust and you will pay. That's fine.
Despite the terrifying feeling of uncertainty, most situations in today's world won't kill you. They come with a potential loss. They also come with an opportunity cost. The cost of not trying. Because of loss aversion, we tend to greatly underestimate the cost of not trying, while overestimating the cost of failure and loss.
We want to view ourselves as antifragile rather than just resilient. We want things to go wrong from time to time. We appreciate uncertainty. Under the right circumstances, this will make us grow.
Characteristics of Antifragile Systems
The good thing is, humans are designed to be antifragile. Still, there are some things we should look out for to improve our ability to gain from uncertainty.
- Bankroll management
Don't be stupid. Even in today's world, situations exist that are likely to kill you. You are only antifragile as long as you can limit your downside. The Idea of antifragility is that you should play games where you recover from loss and accumulate gains. If the price of failing is existential–you have to stop playing the game–you will not recover from the loss. Even when you are very likely to win… Only participate in games where you can recover from the loss. In poker, they call it bankroll management.
- Eggs in more than one basked
This is another way of limiting your downside. There should be more than one you. I like to consider myself a writer now. However, failing to write an article is not an existential threat. I am not just a writer. I could also consider myself an athlete, student, friend, someone's secret love… Whatever.
- Bones, Burden and Stress Fractures
Bones are antifragile. If you pressure them, they get more dense over time. If you burden them 24/7 they are likely to display a stress fracture at some point. An important part of antifragility is overcompensation. If you get hurt, you want to come back stronger. This needs room for regeneration.
To have room for regeneration, make use of plans and routines to mitigate stress and uncertainty that is predictable and therefore unnecessary. If that's not enough, prioritise and only do what's necessary. Most things are not. You'd be surprised.
If bones do break, make sure they are growing together the way they are supposed to do. Situations you remember with regret or anger probably need to be reviewed and worked on. Situations that result in post-traumatic stress disorder for some people result in post-traumatic growth for others. Even if situations may not be your responsibility, your interpretation always is.
- Stacking proof
We have trophies for our biggest wins. However, I like Naval Ravikant´s Idea, that our true resume resembles more a catalogue of our failures. The way we dealt with them might be even more decisive. I am playing with the idea of creating a failure catalogue with situations that felt like the end of the world but turned out not to be the end of the world. The catalogue could contain information about the situation as well as my thoughts and fears at that moment. The next time an end-of-world-situation arises, I can remind myself how they felt and turned out previously.
Would your life be different, if you had played more games with the chance of recoverable loss but gains that outweighed them? Take a risk that feels irrational dangerously. For instance, order a coffee then bargain the price.
To dig deeper into the science of dealing with uncertainty, you can read Nassim N. Taleb's book series “Incerto”.
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