Chapter 18: On the Difference Between a Large Stone and a Thousand Pebbles

Following our reading calendar, we have reached chapter 18.

In this chapter Taleb tries to present the concept of non-linearity for the reader that has no knowledge- or interest- in mathematics, and plays with the idea of convex versus concave curves to give a simple, graphical representation of it. This is mostly getting back to ideas from The Black Swan or Fooled by randomness on how the an impredictable single event can be a really lot more harmful than a thousand small shocks.

There are a couple of examples on traffic jams -a quite common resource for talking about non-linear effects- and a more interesting discussion about regularity in our food ingestion. Taleb makes a compiling argument that our digestive systems are not designed for eating regularly and proposes a more biologically realistic system of fasting and gorging (getting back to the barbell strategy).

Another interesting discussion about size, and how small is a lot more antifragile than big, applied to both animals and financial markets. Following a similar reasoning, in a recent post in Facebook, Taleb argued in favour of the Scottish independence due to the smaller size of the country it would create, instead the bigger United Kingdom.

I specially enjoyed his discussion on why planning tend to underestimate the cost of any project until the budget ends doubling, or even more. Before reading this chapter, I tended to attribute to the planning fallacy -as did Taleb before he started reflecting on the subject- that this was due to randomness, to unexpected drawbacks. But, as he explained, this didn’t happen in the past, so the real cause of such miscalculations is the complexity of our world, plus the agency problem: the divergence between the interests of the agent and the client. In the end time itself is responsible:

“ Just as time cannot be negative, a three-month project cannot be completed in zero or negative time. So, on a timeline going left to right, errors add to the right end, not the left end of it. If uncertainty were linear we would observe some projects completed extremely early (just as we would arrive sometimes very early, sometimes very late). But this is not the case.”

Another interesting idea of this chapter is the ecological principle of acting on nature like then thousand pebbles instead of one large stone. like in pollution ““The harm from polluting with ten different sources is smaller than the equivalent pollution from a single source”, or feeding from lots of different products instead of focusing on a very few, as we tend to do a lot in the Western world.




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