EXAMPLES OF ANTIFRAGILITY
Karl Arnold Belser
9 June 2017
| I heard a talk by Mark Andreessen from the venture capital company Andreessen Horowitz that shows antifragility in action.
This hedge fund interviews some 2000 entrepreneurs each year with the
intention of investing in some new business ideas. they pick less than 20 too
fund. However, Andreessen pointed out that almost every idea is a good
one, but some are ahead of their time. He also states that the
experience of pitching to his company empowers the interviewees because
they learn what they did right and what they didn't. This is an example
of antifragility,because these best and brightest will ultimately
contribute to the broader society by creating new businesses. The
antifragility is simply the collecting and compounding of a large
network of talented people in Silicon Valley.
This observation caused me to realize that there have been many inventions throughout history that have allowed a positive cascade of creativity to occur. Examples that immediately come to mind are the inventions of religion to solidify communities, the invention of language and money to allow for commerce between communities, the occurrence of trade guilds to accumulate expertise, the invention of the printing press to allow a wide distribution of knowledge without much censorship by states or religions, the development of the scientific method and the resulting technologies that gave individuals more power to produce, the creation of universities to disseminate this knowledge, the development of efficient corporations to compound knowledge into products, and the development of democratic government that might allow people to reap the benefits of their own work. Democracy protects life, liberty and property and as a result promotes creativity and hard work.
The main type of antifragility that I see in today's society are the Internet and smart phones. The companies of Facebook, Amazon, Netflix and Google (the FANG companies) are dominant in society today. They are changing the lives of many people over the earth.. in the near future artificial intelligence and automation using computers are probably going to change the work environment for a large number of people. What is needed is for the government to relax control and allow the discovery process to occur at the individual level. Government dictates will probably not work.
The Coase Theorem in economics suggests that the optimal allocation of resources and use of ideas occurs when individuals bargain and negotiate for their own interests. Alexie Tocqueville stated the underlying concept in his 1835 work Democracy in America:
The Americans, on the contrary, are fond of explaining almost all the actions of their lives by the principle of interest rightly understood; they show with complacency how an enlightened regard for themselves constantly prompts them to assist each other, and inclines them willingly to sacrifice a portion of their time and property to the welfare of the state.
The key idea is that it is local community that gives rise to optimal behavior, not government dictates from detached bureaucrats. This idea us stated clearly in the article The Welfare State versus The Community. Will the state back off and let people discover what is in their own interest in this time of rapid change?
It appears to me that individuals working in a local community or other organization tmight result in antifragility. This suspicion is elaborated in the book Why Nations Fail by Acemogiu and Robinson. Here are a book summary and a Wikipedia article about the book.
Last updated June 10, 2017
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