Antifragile Man

Nassim Taleb, author of the best selling book about risk management, The Black Swan – The Impact of the Highly Improbable, later wrote the book, Antifragile -Things that Gain from Disorder. The Black Swan sold over three million copies but Antifragile was less successful. The concept of antifragility as propounded by Taleb can be difficult to comprehend. If you doubt me just watch the YouTube discussion between Taleb and Nobel prize-winner Daniel Kahneman, author of Thinking Fast and Slow.

A China tea cup is fragile, we know that. Drop it on the floor and it shatters into a million pieces. A teacup made of more durable material (there are many choices on Amazon) will not break when it falls on the floor. The unbreakable teacup is the opposite of fragile but it is not antifragile. It is sturdy or nonfragile. An antifragile teacup would be one that would be better after the fall to the floor than before as hard as that is to believe. That is why antifragile is such a difficult concept.

Antifragility is the ability to take advantage of chaos and disruption. Mr. Taleb is the advisor to the Universa Fund that had a 3600% return during the chaos and disruption caused by the Covid pandemic. But there is one person who takes even greater advantage of chaos and disruption than Mr. Taleb, Donald Trump. Mr. Trump thrives in chaos. If there is no chaos or disruption he will create it. His first six weeks in office as 47thPresident of the United States has been an outburst of chaotic activity, mind numbing change, wholesale firings, and closing departments in an effort led by Elon Musk, another person who thrives on disruption. Most of the leaders of change in America in the last twenty years (Elon Musk, Bill Gates, Jeff Bezos, Steve Jobs, and others) have been disruptors.

This is actually the secret sauce of America’s success. The structure of our government and our society promotes innovation and change, a form of disruption. The business television network CNBC features its annual Disruptor 50 of companies that are leading change in America. If you don’t believe me just look at history. No country in the world emerged unscathed from the double whammy of the Great Depression and World War Two, except the United States. After the war the United States was the strongest country in the world. It accounted for 50% of the world’s GDP. Only an antifragile country can emerge from two decades of economic depression and war stronger, better and more confident.

So Mr. Trump’s hectic activity and disruption is nothing new in the United States. We have been there before. Only not quite so abruptly. Not so in your face on television and social media. These are the conditions in which he thrives so this new era of frenetic disruptive activity will not soon abate.

The business news outlets keep reporting how Mr. Trump’s tariff policies are bewlidering American businesses as evidenced by stock market volatility every time a change in tariff policy is announced. Tariffs are excellent disruptors. They are arbitrary. They can change on a moment’s notice. Favored industries get exemptions. Others nada. They hit where it hurts. No wonder Mr. Trump loves tariffs so much. Mr. Trump likes to say he is Tariff Man. But tariffs are just a tool. He is really Antifragile Man. But unlike Mr. Trump, most of the people in America are not disruptors and are not antifragile. Most businessmen consider their businesses very risky. All the disruption generated by the Trump administration just make businesses even riskier and the jobs of CEOs harder.

People on Main Street like disruption even less than businessmen. Unlike Mr. Trump and other antifragile leaders, their lives are more vulnerable (fragile if you like) to the uncertainties of economic volatility. As pollster Frank Luntz noted in a recent interview on CNBC’s Squawk Box, people on Main Street view the economy based on their most recent trip to the gas station or grocery store, not what economists say the economy will be like in six months or a year.

President Trump’s assurances in his speech to the joint session of Congress that what he was doing is going to make their lives better eventually and that any disruptions (such as increased inflation) would be temporary might ease their concerns in the short run. But month after month of chaotic activity creating ever greater uncertainty and fear will eventually become unbearable. President Trump may be as happy as Brer Rabbit in the Briar Patch amidst all this chaos and disruption but most everybody else hates it. The American people are more antifragile than any other people in the world, but they have their limits.

Winston Churchill is well known for saying, “Americans can always be trusted to do the right thing, once all other possibilities have been exhausted.” This rings true even though many people doubt that he actually said that. Right now the antifragile President Trump is exhausting many possibilities. Let’s hope that he eventually finds the right thing. And pretty quickly.