How Things Handle Disorder

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Nassim Taleb, a world reknown economist, speaks about "how systems handle disorder" and the difference between fragile and anti-fragile systems. He starts with a picture of a coffee cup and a quesitons: What is the main characteristics of a coffee cup? It is fragile? Why is it fragile? It doesnt like volatility. Also, what is the opposite of fragile. It is robust but things that like disorder. Every systems has convexity as well concanvity effects. In the convex mood we prefer variability and we are better off with second order effects. It means that anything in nature is non-linear and usually has a s-shaped curve, e.g. one glass off wine is nice but 500 of them are not nice anymore. So in the convex part the system needs randomness and if you are making the environment very comfortable you will harm yourself. However, there are accelerating effects of additional exposure and in the concave part you want stability. Hence, the average is better than the extremes and fragile systems want variability within limits. Another example for accelerating effects are that there are much fewer elephants than rats. A bigger systems is just more fragile and it is accelerating harm. Nassim concludes that is is important to let systems fail because the system will generate a smooth transition. A truly healthy system is a system in which failures doesn't endanger the whole system.

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