Following the schedule of our reading calendar.
Taleb presents us in this short chapter with what is probably the central message from his book. A method for analyzing the fragility of systems that should replace the risk assessments in decision making. The basic idea is to measure how the payoff of a system varies under different assumptions and compare if eventual benefits in the best situation are bigger or smaller than eventual harm in the worst situation.
This comparison should define the system as fragile, robust or antifragile and should give us enough information to make decisions about that system. This method is independent of the probabilities of occurrence of the best and worst scenarios and so, it is not dependent of the quality of the risk assessments which cannot be very accurate.
Taleb considers this idea so important that he names it as “The Philosopher’s Stone” after the hypothetical method that alchemists searched during centuries to transform metals into gold.
It is indeed a powerful idea and by itself makes the reading of the book worthwhile.