Rule 1: Think of the economy as being more like a cat than a washing machine.
—”[The] denial of the antifragility of living or complex systems is the costliest mistake that we have made in modern times. Stifling natural fluctuations masks real problems, causing the explosions to be both delayed and more intense when they do take place.”Rule 2: Favor businesses that benefit from their own mistakes, not those whose mistakes percolate into the system.
Citing the airline and restaurant industries, Taleb describes: “These industries are antifragile: The collective enterprise benefits from the fragility of the individual components, so nothing fails in vain. These businesses have properties similar to evolution in the natural world, with a well-functioning mechanism to benefit from evolutionary pressures, one error at a time.”Rule 3: Small is beautiful, but it is also efficient.
—“Experts in business and government are always talking about economies of scale. They say that increasing the size of projects and institutions brings costs savings. But the “efficient,” when too large, isn’t so efficient.”Rule 4: Trial and error beats academic knowledge.
—“To promote antifragility, we must recognize that there is an inverse relationship between the amount of formal education that a culture supports and its volume of trial-and-error by tinkering. Innovation doesn’t require theoretical instruction, what I like to compare to “lecturing birds on how to fly.” ”Rule 5: Decision makers must have skin in the game.
—“In the business world, the solution is simple: Bonuses that go to managers whose firms subsequently fail should be clawed back, and there should be additional financial penalties for those who hide risks under the rug. This has an excellent precedent in the practices of the ancients. The Romans forced engineers to sleep under a bridge once it was completed.”
