Indolent Fellow Travelers 37 The Importance of Lunch

Chapter 2. Fat Tony and the Fragilistas

The difficulties of lunch Fragilistas Quickly open the envelop A certain re-division of the world, as seen from New Jersey Gigabites of misinformation

INDOLENT FELLOW TRAVELERS

Before the economic crisis of 2008, the association between our two main
characters, Nero Tulip and Tony DiBenedetto, known as Fat Tony or Tony Horizontal, would have been hard to explain to an outsider; a novelist would find it very difficult to put two such characters in any form of social relationship, given the lack of plausible intersection between them. Their regular conversations about things would be hard to invent, but reality is far more imaginative than novelists. To see how far apart the two are, just consider that Neros principal activity in life is reading books, with a few auxiliary activities in between, like occasional commercial transactions, rearranging books in shelves according to some emotional map, evading torrid romantic fights with one Yevgenia Krasnova, a novelist and neuroscientist, long (slow) walks, and brief episodes lifting rocks to imitate natural weightlifting. As to Fat Tony, he read so little that, one day when he mentioned he wanted to write his memoirs, Nero joked that Fat Tony would have written exactly one more book that he had read to which Fat Tony, always a few steps ahead of him, quoted Nero back: "you once said that if you felt like reading a novel, you would write one" Nero had one day cited the British Prime Minister and novelist Benjamin Disraeli who wrote but didnt like reading novels, and Fat Tony imbibed it. So, unburdened with time consuming (and to him, useless) reading activities, and highly allergic to structured office work, Fat Tony spent a lot of his time doing nothing, with occasional commercial transactions in between. And, of course, a lot of eating.

While most people around them were running around fighting the different varieties of insuccess, both Nero and Fat Tony were mostly terrorized of boredom, particularly when one wakes up early with the perspective of an empty day ahead. So the proximate reason for their getting together before that crisis was, as Fat Tony would say, doing lunch. If you live in an active city, say New York, and have a friendly personality, you will have no trouble finding good dinner partners, people who can hold a conversation of some interest in an almost relaxed way. Lunch, however is a severe difficulty in modern society, particularly during the phases of high employment. It is easy to find lunch partners among the residents office inmates but, believe me, you dont want to get near them. They will have liquefied stress hormones dripping from their pores, will exhibit anxiety if they discuss anything that may divert them from what they think is their course of work, and when, in the process of picking their brain you hit on a less uninteresting mine, they will cut you short with a I have to run or I have a two-fifteen. Moreover, Fat Tony got respect in exactly the right places. Unlike Nero, whose ruminating philosophical episodes erased his social presence, making him invisible to waiters, Tony elicited warm and enthusiastic responses when he showed up in an Italian restaurant. His arrival triggered a small parade among the waiters and staff; he was ostensibly hugged by the restaurant owner, and his departure after the meal was a long procedure with the owner and, sometimes, his mother, seeing him outside, with some gift, like perhaps homemade grappa (or some strange liquid in an unmarked bottle), more hugs and promises to come came for the Wednesday special meal. Note that we call Fat Tony fat, but it looks that there are many gradations of fat, and Tony had the better kind of fat, the not soft-bodied type of fat. He looked tight; his adipose tissue was not so flabby, as he had a well defined jaw line and a powerful chest. Accordingly, Nero, when he was in New York, could reduce his anxiety about lunchtime, as he could always count on Tony. He would meet Tony at the health club; there our horizontal hero did his triathlon (Sauna, Jacuzzi, and Steam bath), and, from there they would go get some worship from restaurant owners. So, a few years ago, Tony explained to Nero that he had no use for him in the evenings he could get better, more humorous, more Italian-New Jersey friends; those, unlike Nero, who could give him ideas for "something useful".

11/1/11 Copyright 2011 by N. N. Taleb. This draft version cannot be disseminated or quoted.

Indolent Fellow Travelers 38 Indeed Nero knew nothing about Fat Tonys personal, New Jersey life, except that he suspected that since Fat Tony spent his time talking about women, that he could not be a womanizer. He most probably had a good if calorie-rich paterfamilias existence. who has wall-to-wall bookshelves knows bitterly well. Nero lives, at the time of writing, among fifteen thousand books, with the stress of how to discard the boxes after the arrival of his daily shipment. Given that the feeling of ignorance increases with knowledge the only safe course might be to just try to know nothing, get into, say, golf or bridge, and hit the zero-curiosity level usually found among accountants, Platonist mathematicians, and TV entertainers. Intellectuals typically size up people by looking at their bookshelvespeople even size up themselves that way and improve their self image by adding, say, Musil or Baudrillard to the shelves within comfortable distance from the breakfast table. Nero sometimes envied these mathematicians who had absolutely no books on their shelves outside of, say, chess manuals and wine dictionaries, and could safely talk about things and ideas since they would never realize their ignorance.xxi For a modern mind, classics are written in a less stimulating way than, say, Russian literature or postmodern novels, unless one focuses on the linguistic charm (classical languages are more subtle and elegant than modern ones). Something happening in ancient Rome feels too remote and Neros dream is to find thinkers with classical minds writing about contemporary matters. Nero was developing some admiration for persons of great erudition such as Joseph Juste Scaliger, or bishop Pierre-Daniel Huet , sixteen and seventeen century men who aggregated the knowledge of their time. The two were so erudite that they considered Montaigne who for us is extremely cultured and a bridge to the classics some low-life impostor. Montaigne, the hero of every modern highbrow, was to them the equivalent of what to us would be a pop-science writer; he did not know Arabic, Hebrew, Assyrian, and had a questionable grasp of Greek. Nero felt envy of his erudite grandfather who had spent his time reading. One subject Nero read for pleasure, rather than the strange duty-toread, was medical texts. That interest came from having had two brushes with death, the first from a cancer and the second from a helicopter crash that alerted him to both the fragility of technology and self-healing powers of the human body****. So he spent a bit of his time reading textbooks (not papers, textbooks) in Medicine, or professional texts. Just as people cruise the web, he cruises Harrisons Principles of Internal Medicine (he had the 14th, 16th , and 18th edition), and DeVitas Principles and Practice of
accidents: See Fooled by Randomness and The Black Swan

The Antifragility of Libraries Nero almost never saw Tony outside of lunch. He lived a life of mixed (and transient) asceticism, going to bed as close to 9 PM as he could, sometimes even earlier in the winter. He tries to leave parties when the effect of alcohol makes people start talking to strangers about their personal lives or, worse, turn metaphysical. Nero prefers to conduct his activities by daylight, trying to wake up in the morning with the sun rays gently penetrating his bedroom, leaving stripes on the wallsxx. He is best described as a post-adventurer who orders books from Amazon.com, and very often reads them. Nero having terminated his adventures, like Sindbad the sailor and Marco Polo the Venitian traveler, settled for a quite life of post-adventure, and, as we saw, lunches. Nero is victim of a aesthetic ailment that brings revulsion, even phobia of: people wearing flip flops, television, bankers, politicians (right-wing, leftwing, centrists), New Jersey, rich persons from New Jersey, rich persons who take cruises (and stop in Venice wearing flip flops), university administrators, grammatical sticklers, name-droppers, elevator music, and well-dressed salespersons or businessmen. (Fat Tony had different allergy: the empty suit, someone who has a command of all the superfluous and administrative details of things, but misses the essential (and arent even aware of it), so their conversation becomes mere chitchat around the point, never getting to the central idea. Fat Tony can figure out a person from seeing him just walk into a restaurant.) But, alas, men of leisure become slaves to inner feeling of dissatisfaction and interests over which they have little control. The freer Neros time, the more compelled he felt to compensate for time lost filling gaps in his natural interests, things that he wanted to know a bit deeper. And, as he discovered, the worst thing one can do to feel one knows things a bit deeper is to try to go into them a bit deeper. The sea gets deeper as you go further into it, according to a Venetian proverb. Curiosity is antifragile, like an addiction, and is magnified by attempts to satisfy it books have a secret mission and ability to multiply, as everyone
11/1/11 Copyright 2011 by N. N. Taleb. This draft version cannot be disseminated or quoted.

****

On Suckers and Nonsuckers 39 Oncology, aimlessly going from one entry to another, encountering surprises here and there.xxii Nero enjoyed talking long walks in old cities, without a map. He used the following method to detouristify his traveling. Without being aware of the notion of antifragility, he tried to inject some randomness into his schedule by never deciding on the next destination until he spent some time in the first one, driving his travel agent crazy say he was in Zagreb, his next destination would be determined by the mood he felt in Zagreb, and the ideas he got there, not by some pre-packaged top-down decision that does not take into account his mood. It would be violating true travel and transforming it into a commoditized enterprise. The planning of travel resembles the planning of economic system. Or, mostly, when in New York, Nero sat in his study with his writing desk set against the window, occasionally looking dreamingly at the New Jersey shore across the Hudson river, and reminding himself how happy he was to not live there. So he conveyed to Fat Tony that the outside this and this, I have no use for you was reciprocal (in equally nondiplomatic terms), which, as we will see, was not true. before the crisis when everyone thought they were geniuses). And collectively they were even more suckers than individually. He had a natural ability to detect these suckers. The ability to find that subtle boundary between sucker and nonsucker was an expertise you could rarely findand, further, Fat Tony had derived his income from that activity, while leading as we saw a life of leisure. Nero interests were similar to Tony, except that, stripped of New Jersey language, it was, dressed up within the intellectual traditions. To Nero, empty suits have a one-way effect of fragilizing. To him, humans cannot understand whats going on, natural systems can. And natural systems eventually destroy what does not belong there. So Tony and Nero both then made a bundle from the crisis everything other than a bundle for Tony is tawk. Tony made a lot, lot more than Nero, in the high eight low nine figures, but Nero was satisfied that he just won, and that his share was large but less spectacular as we said, he had already been financially independent and he saw money as severely corrupting. The ethics on betting against suckers will be discussed in Part III, but there are two schools of thought. To Nero one should first warn people that they are suckers, though Tony was against the very notion of warning: you will be ridiculed, he said, words are for sissies. A system based on verbal warnings will be dominated by the journalists, academics, and other hindsight bulls**ters. They wont give you and your ideas respect unless you take their money. You can actually recognize word-using-non-risktakers them at their use of expressions practical solution or real-world in their speech, ones that no real practitioner of risk-taker feels compelled to use. Further, Fat Tony insisted that Nero takes a ritual look at the physical embodiment of the spoils like a bank account statement as we said, it had nothing to do with the financial value, nor even the purchasing power of the items, just their symbolic value. He could understand why Julius Cesar needed to incur the cost of having Vercingetorix, the leader of the Gaul rebellion, brought to Rome and paraded in chains, just so he could exhibit victory in the flesh. There is another dimension to the need to focus on actions and avoid words: the health-eroding dependence on external recognition. People are cruel and unfair in the way they devolve recognition, so it is best to stay out of that game. Nero at some stage befriended a scientist of legendary status, a giant for whom he had an immense respect. Although the fellow was about as

ON SUCKERS AND NONSUCKERS

After the crisis of 2008, the things of the conversation between the two characters and other commonalities became obvious: they were spending time discussing where the suckers are, and Tonys idea on how to "make a safe buck" from the impending suckers fragility crisis. What had gotten them together was that they had been both convinced that a crisis of such magnitude, with a snowballing destruction of the modern economic system, in a way never seen before, was bound to happen, simply because they were suckers, the they to be defined (but it will take part of the book for this), and "there was fragility", and there was a brand of person who was causing fragility that Fat Tony called fragilistas. But our two characters came from two entirely different schools of thought. Note that neither Fat Tony nor Nero Tulip reached the intellectual level to have an explicit understanding of the concept of antifragility, but they were quite sophisticated in applying it in practice. They understood fragility and robustness, but that was good enough: the detection of fragility. Fat Tony as a businessman-who-does-not-read-books believed that nerds, bureaucrats, and, mostly, bankers were the ultimate suckers (that was
11/1/11 Copyright 2011 by N. N. Taleb. This draft version cannot be disseminated or quoted.

On Suckers and Nonsuckers 40 prominent as one could get in his field (in the eye of others), he spent his time focused on what status he had that week in the scientific community. He would get enraged at authors who did not cite him or at some committee granting a medal he did not get and that someone else judged inferior somewhat received, that impostor! Nero learned that no matter how comfortable they could be with their work, these hotshots-who-depended-on-words were deprived of the serenity of Tony; they remained fragile to the emotional toll from what compliments they did not get, what others got, and what someone of lower intellect took away from them. So Nero promised himself to escape all of this with his small ritual just in case he would fall prone to the hotshots temptation. Nero's spoils from what he called the Fat Tony bet, after deducting the cost of a new car ( a mini), a new $60 swatch watch, amounted to dizzyingly large amount sitting in a portfolio, the summary of which was mailed to him monthly from (of all places) a New Jersey address, with three other statements from overseas countries. Again, it is not the amount but the tangibility of his action that countedquantities could have been a tenth, even a hundredth of what he had and the effect would remain the same. So he would cure himself of the game of recognition by opening the envelop containing the statement then continuing the work on Probability, oblivious to the presence of those cruel and unfair users of words. But to follow ethics to their natural conclusion, Nero should feel just as proud and satisfied had the envelop contained losses. A man is honorable in proportion to the personal risks he takes for his opinion. homework for economic and investment decisions, less than a handful saw it coming furthermore, aside from a handful, not one of those who saw dangers in the economic system managed to foresee the full extent of the damage. In other words, some people recognized that something was wrong, but did not take things to their conclusion by overcoming their mental hangups and accepting the unavoidability of a total collapse of the banking system. And consider that out of the millions of journalists with trillions of babbles, almost not one got close. So Nero could stand near the former World Trade Center, in downtown New York, across the large colossal buildings housing mostly banks and brokerage houses, with hundreds of people running around inside of them, expending gigawatts of energy just moving and commuting from New Jersey, consuming millions of bagels with cream-cheese, with insulin response (in theory) inflaming their arteries, producing gigabytes of information just by talking and corresponding and writing articles. And all it was, was just noise. What is noise? In science, noise is a generalization beyond the actual sound to describe random information that is totally useless for any purpose, and that you need to clean up to make sense of what you are listening to. For example, consider elements in an encrypted message that have absolutely no meaning, just randomized letters to confuse the spies, or the hiss you hear on a telephone line and that you try to ignore in order to just focus on the voice of your interlocutor. So noise it was: wasted effort, cacophony, unaesthetic behavior, increased entropy, production of energy that causes a local warming up of the New York area ecozone, and a large scale delusion of this thing called wealth that was bound to evaporate somehow. Worse even, the disconnect becomes more pronounced the higher you went up in the intellectual sphere. Nero once attended Fragilistas International. It was the Boston meeting of the American Economic Association, with thousands of economists, some nerdy, others less nerdy, running around pontificating on some strange items, in his opinion, without a clue about the central problem. You could peruse tens and tens of thousands of research papers written by these academics, entire libraries containing knowledge about our society, getting the minute detail about things of close to zero relevance. It would be like treatises on the joys of sex written by a committee of virgins bickering with each other, with endless views and counterviews, theories and counter-theories. Nero figured out intuitively but not explicitly a version of the less-is-more effect: if they

Fragilistas International A word on Neros loneliness. For Nero, in the dark days before the crisis, it sometimes felt painfully lonely to be alone with his ideas wondering at times, particularly Sunday nights, if there was something particularly wrong with him or if there was something wrong with the world. Lunch with Fat Tony was like drinking water after an episode of thirst; it was immediate relief to just realize that he was either not crazy, or, at least, not alone in being crazy. Things out there did not make sense, and it was impossible to convey it to others, particularly people deemed intelligent. Consider that there were close to a million professionals employed in economic activities, whether in government (from Cameroun to Washington, DC), academia, journalism, banking, corporations or doing their own private
11/1/11 Copyright 2011 by N. N. Taleb. This draft version cannot be disseminated or quoted.

On Suckers and Nonsuckers 41 collectively write so much it is precisely because they have no clue. And it is precisely because they write so much that they dont have a clue. You could stack the books and they would constitute an entire mountain. They missed the central point about the Procrustean bed of probability. Anything in them that deals with probability statistics or mathematical models is just air, in spite of evidence that and evidence this. It is a game played between parasitic adults that took a life of its own and any idiot who listens to them for advice deserve to part from his dearly saved funds. And you learn more from a couple of lunches with Fat Tony than from the entire Harvard libraries of social science, with close to two million books and research papers, for a total of 33 million hours of reading, close to 9,000 years worth of reading as a full-time activityxxiii. What the bulk of these books and papers in the Harvard library have in common is that they contribute to the fragility of the world. And we know at least one reason behind the failure of that august science of economics fail: misunderstanding of the probability of rare events and the illusion of our ability to compute it. Anything that had an equation was likely to be mistaken about uncertainty, sort of getting it backwards and causing reliance on thin air. To express it in our terminology instead of Neros, this is Black Swan blindness leading to systems more and more Black Swan prone, more and more fragile, under an increased illusion of stability. But the expert wants to show a solution so we keep calling them experts. There should always have the designation fragilistas attached to them. Hayek got something right about organic price formation, but did not take the point into risk and fragility. For Hayek, bureaucrats were inefficient, not fragilistas. Whats worse, all of these books and papers, Nero is convinced, collectively, contain less wisdom that the works of either Seneca or Cicero less useful, less elegant. Talking about a major sucker problem.

The only exception in that social science library is a few small section in the cognitive science literature some of it works. I received over time some mail by a fragilista asking me if I had enough evidence for my statements about the incompetence of the economics establishment. You do not need much more than their missing the risks leading to the crisis that started in 2008 (coupled with their belief after the crisis that they understood it all),

just as you do not need to wait for someone to flunk an elementary piano test before having enough evidence to call him a nonpianist. Sorry.

11/1/11 Copyright 2011 by N. N. Taleb. This draft version cannot be disseminated or quoted.