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Contra Robert Shiller on Cryptocurrencies – Article by Adam Alonzi

Contra Robert Shiller on Cryptocurrencies – Article by Adam Alonzi

Adam Alonzi


While warnings of caution can be condoned without much guilt, my concern is critiques like Dr. Shiller’s (which he has since considerably softened) will cause some value-oriented investors to completely exclude cryptocurrencies and related assets from their portfolios. I will not wax poetically about the myriad of forms money has assumed across the ages, because it is already well-covered by more than one rarely read treatise. It should be said, though it may not need to be, that a community’s preferred medium of exchange is not arbitrary. The immovable wheels of Micronesia met the needs of their makers just as digital stores of value like Bitcoin will serve the sprawling financial archipelagos of tomorrow. This role will be facilitated by the ability of blockchains not just to store transactions, but to enforce the governing charter agreed upon by their participants.

Tokens are abstractions, a convenient means of allotting ownership. Bradley Rivetz, a venture capitalist, puts it like this: “everything that can be tokenized will be tokenized the Empire State Building will someday be tokenized, I’ll buy 1% of the Empire State Building, I’ll get every day credited to my wallet 1% of the rents minus expenses, I can borrow against my Empire State Building holding and if I want to sell the Empire State Building I hit a button and I instantly have the money.” Bitcoin and its unmodified copycats do not derive their value from anything tangible. However, this is not the case for all crypto projects. Supporters tout its deflationary design (which isn’t much of an advantage when there is no value to deflate), its modest transaction fees, the fact it is not treated as a currency by most tax codes (this is changing and liable to continue changing), and the relative anonymity it offers.

The fact that Bitcoin is still considered an asset in most jurisdictions is a strength. This means that since Bitcoin is de facto intermediary on most exchanges (most pairs are expressed in terms of BTC or a major fiat, many solely in BTC), one can buy and sell other tokens freely without worrying about capital gains taxes, which turn what should be wholly pleasurable into something akin to an ice cream sundae followed by a root canal. This applies to sales and corporate income taxes as well. A company like Walmart, despite its gross income, relies on a slender profit margin to appease its shareholders. While I’m not asking you to weep for the Waltons, I am asking you to think about the incentives for a company to begin experimenting with its own tax-free tokens as a means of improving customer spending power and building brand loyalty.

How many coins will be needed and, for that matter, how many niches they will be summoned to fill, remains unknown.  In his lecture on real estate Dr. Shiller mentions the Peruvian economist Hernando De Soto’s observation about the lack of accounting for most of the land in the world.  Needless to say, for these areas to advance economically, or any way for that matter, it is important to establish who owns what. Drafting deeds, transferring ownership of properties or other goods, and managing the laws of districts where local authorities are unreliable or otherwise impotent are services that are best provided by an inviolable ledger. In the absence of a central body, this responsibility will be assumed by blockchain. Projects like BitNation are bringing the idea of decentralized governance to the masses; efforts like Octaneum are beginning to integrate blockchain technology with multi-trillion dollar commodities markets.

As more than one author has contended, information is arguably the most precious resource of the twenty first century. It it is hardly scarce, but analysis is as vital to making sound decisions. Augur and Gnosis provide decentralized prediction markets. The latter, Kristin Houser describes it, is a platform used “to create a prediction market for any event, such as the Super Bowl or an art auction.” Philip Tetlock’s book on superforecasting covers the key advantages of crowdsourcing economic and geopolitical forecasting, namely accuracy and cost-effectiveness. Blockchains will not only generate data, but also assist in making sense of it.  While it is just a historical aside, it is good to remember that money, as Tymoigne and Wray (2006) note, was originally devised as a means of recording debt. Hazel sticks with notches preceded the first coins by hundreds of years. Money began as a unit of accounting, not a store of value.

MelonPort and Iconomi both allow anyone to start their own investment funds. Given that it is “just” software is the beauty of it: these programs can continue to be improved upon  indefinitely. If the old team loses its vim, the project can easily be forked. Where is crypto right now and why does it matter? There is a tendency for academics (and ordinary people) to think of things in the real world as static objects existing in some kind of Platonic heaven. This is a monumental mistake when dealing with an adaptive system, or in this case, a series of immature, interlocking, and rapidly evolving ecosystems. We have seen the first bloom – some pruning too – and as clever people find new uses for the underlying technology, particularly in the area of IoT and other emerging fields, we will see another bloom. The crypto bubble has come and gone, but the tsunami, replete with mature products with explicit functions, is just starting to take shape.

In the long run Warren Buffett, Shiller, and the rest will likely be right about Bitcoin itself, which has far fewer features than more recent arrivals. Its persisting relevance comes from brand recognition and the fact that most of the crypto infrastructure was built with it in mind. As the first comer it will remain the reserve currency of the crypto world.  It is nowhere near reaching any sort of hard cap. The total amount invested in crypto is still minuscule compared to older markets. Newcomers, unaware or wary of even well-established projects like Ethereum and Litecoin, will at first invest in what they recognize. Given that the barriers to entry (access to an Internet connection and a halfway-decent computer or phone) are set to continue diminishing, including in countries in which the fiat currency is unstable, demand should only be expected to climb.

Adam Alonzi is a writer, biotechnologist, documentary maker, futurist, inventor, programmer, and author of the novels A Plank in Reason and Praying for Death: A Zombie Apocalypse. He is an analyst for the Millennium Project, the Head Media Director for BioViva Sciences, and Editor-in-Chief of Radical Science News. Listen to his podcasts here. Read his blog here.

Criticizing Programmed Theories of Aging – Article by Reason

Criticizing Programmed Theories of Aging – Article by Reason

The New Renaissance HatReason
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Today I’ll point out an open-access critique of programmed aging theories by the originator of the disposable soma theory of aging, one of the modern views of aging as accumulated damage rather than programming. The question of how and why we age is wrapped in a lot of competing theory, but of great practical importance. Our biochemistry is enormously complex and incompletely mapped, and thus the processes of aging, which is to how exactly our biochemistry changes over time, and all of the relationships that drive that change, are also enormously complex and incompletely mapped. Nonetheless, there are shortcuts that can be taken in the face of ignorance: the fundamental differences between young and old tissue are in fact well cataloged, and thus we can attempt to reverse aging by treating these changes as damage and repairing them. If you’ve read through the SENS rejuvenation research proposals, well, that is the list. The research community may not yet be able to explain and model how exactly this damage progresses, interacts, and spreads from moment to moment, but that effort isn’t necessary to build repair therapies capable of rejuvenation. You don’t need to build a full model of the way in which paint cracks and peels in order to scrub down and repaint a wall, and building that model is a lot most costly than just forging ahead with the painting equipment.

The engineering point of view described above, simply getting on with the job when there is a good expectation of success, is somewhat antithetical to the ethos and culture of the sciences, which instead guides researchers to the primary goal of obtaining full understanding of the systems they study. In practice, of course, every practical application of the life sciences is created in a state of partial ignorance, but the majority of research groups are nonetheless oriented towards improving the grand map of the biochemistry of metabolism and aging rather than doing what can be done today to create rejuvenation therapies. Knowledge over action. If we had all the time in the world this would be a fine and golden ideal. Unfortunately we do not, which places somewhat more weight on making material progress towards the effective treatment of aging as a medical condition – ideally by repairing its causes.

But what are the causes of aging? The majority view in the research community is that aging is a process of damage accumulation. The normal operation of metabolism produces forms of molecular damage in cells and tissues, a sort of biological wear and tear – though of course the concept of wear and tear is somewhat more nuanced and complex in a self-repairing system. This damage includes such things as resilient cross-links that alter the structural properties of the extracellular matrix and toxic metabolic waste that clutters and harms long-lived cells. As damage accumulates, our cells respond in ways that are a mix of helpful and harmful, secondary and later changes that grow into a long chain of consequences and a dysfunctional metabolism that is a long way removed from the well-cataloged fundamental differences between old and young tissues. An old body is a complicated mess of interacting downstream problems. In recent years, however, a growing minority have suggested and theorized that aging is not caused by damage, but is rather a programmed phenomenon – that some portion of the what I just described as the chain of consequences, in particular epigenetic changes, are in fact the root cause of aging. In the programmed view of aging, epigenetic change causes dysfunction and damage, not the other way around. That these two entirely opposite views can exist is only possible because there is no good map of the detailed progression of aging – only disconnected snapshots and puzzle pieces. There is a lot of room to arrange the pieces in any way that can’t be immediately refuted on the basis of well-known past studies.

There are two ways to settle the debate of aging as damage versus aging as evolved program. The first is to produce that grand map of metabolism and aging, something that I suspect is at the least decades and major advances in life science automation removed from where we stand now. The other is to build therapies that produce large degrees of rejuvenation, enough of a difference to put it far beyond argument that the approach taken is the right one. That is not so far away, I believe, as the first SENS rejuvenation therapies are presently in the early stages of commercial development. I think that, even with the comparative lack of funding for this line of development, ten to twenty years from now the question will be settled beyond reasonable doubt. Meanwhile, the programmed-aging faction has become large enough and their positions coherent enough that the mainstream is beginning to respond substantially to their positions; I expect that this sort of debate will continue all the way up to and well past the advent of the first meaningful rejuvenation therapies, which at this point look to be some form of senescent cell clearance.

Can aging be programmed? A critical literature review – by Axel Kowald and Thomas B. L. Kirkwood

Quote:

Many people, coming new to the question of why and how aging occurs, are attracted naturally to the idea of a genetic programme. Aging is necessary, it is suggested, either as a means to prevent overcrowding of the species’ environment or to promote evolutionary change by accelerating the turnover of generations. Instead of programmed aging, however, the explanation for why aging occurs is thought to be found among three ideas all based on the principle that within iteroparous species (those that reproduce repeatedly, as opposed to semelparous species, where reproduction occurs in a single bout soon followed by death), the force of natural selection declines throughout the adult lifespan. This decline occurs because at progressively older ages, the fraction of the total expected reproductive output that remains in future, on which selection can act to discriminate between fitter and less-fit genotypes, becomes progressively smaller. Natural selection generally favours the elimination of deleterious genes, but if its force is weakened by age, and because fresh mutations are continuously generated, a mutation-selection balance results. The antagonistic pleiotropy theory suggests that a gene that has a benefit early in life, but is detrimental at later stages of the lifespan, can overall have a net positive effect and will be actively selected. The disposable soma theory is concerned with optimizing the allocation of resources between maintenance on the one hand and other processes such as growth and reproduction on the other hand. An organism that invests a larger fraction of its energy budget in preventing accumulation of damage to its proteins, cells and organs will have a slower rate of aging, but it will also have fewer resources available for growth and reproduction, and vice versa. Mathematical models of this concept show that the optimal investment in maintenance (which maximizes fitness) is always below the fraction that is necessary to prevent aging.

In recent years, there have been a number of publications claiming that the aging process is a genetically programmed trait that has some form of benefit in its own right. If this view were correct, it would be possible experimentally to identify the responsible genes and inhibit or block their action. This idea is, however, diametrically opposed to the mainstream view that aging has no benefit by its own and is therefore not genetically programmed. Because experimental strategies to understand and manipulate the aging process are strongly influenced by which of the two opinions is correct, we have undertaken here a comprehensive analysis of the specific proposals of programmed aging. On the principle that any challenge to the current orthodoxy should be taken seriously, our intention has been to see just how far the various hypotheses could go in building a convincing case for programmed aging.

This debate is not only of theoretical interest but has practical implications for the types of experiments that are performed to examine the mechanistic basis of aging. If there is a genetic programme for aging, there would be genes with the specific function to impair the functioning of the organism, that is to make it old. Under those circumstances, experiments could be designed to identify and inhibit these genes, and hence to modify or even abolish the aging process. However, if aging is nonprogrammed, the situation would be different; the search for genes that actively cause aging would be a waste of effort and it would be too easy to misinterpret the changes in gene expression that occur with aging as primary drivers of the senescent phenotype rather than secondary responses (e.g. responses to molecular and cellular defects). It is evident, of course, that genes influence longevity, but the nature of the relevant genes will be very different according to whether aging is itself programmed or not.

For various programmed theories of aging, we re-implemented computational models, developed new computational models, and analysed mathematical equations. The results fall into three classes. Either the ideas did not work because they are mathematically or conceptually wrong, or programmed death did evolve in the models but only because it granted individuals the ability to move, or programmed death did evolve because it shortened the generation time and thus accelerated the spread of beneficial mutations. The last case is the most interesting, but it is, nevertheless, flawed. It only works if an unrealistically fast-changing environment or an unrealistically high number of beneficial mutations are assumed. Furthermore and most importantly, it only works for an asexual mode of reproduction. If sexual reproduction is introduced into the models, the idea that programmed aging speeds up the spread of advantageous mutations by shortening the generation time does not work at all. The reason is that sexual reproduction enables the generation of offspring that combine the nonaging genotype of one parent with the beneficial mutation(s) found in the other parent. The presence of such ‘cheater’ offspring does not allow the evolution of agents with programmed aging.

In summary, all of the studied proposals for the evolution of programmed aging are flawed. Indeed, an even stronger objection to the idea that aging is driven by a genetic programme is the empirical fact that among the many thousands of individual animals that have been subjected to mutational screens in the search for genes that confer increased lifespan, none has yet been found that abolishes aging altogether. If such aging genes existed as would be implied by programmed aging, they would be susceptible to inactivation by mutation. This strengthens the case to put the emphasis firmly on the logically valid explanations for the evolution of aging based on the declining force of natural selection with chronological age, as recognized more than 60 years ago. The three nonprogrammed theories that are based on this insight (mutation accumulation, antagonistic pleiotropy, and disposable soma) are not mutually exclusive. There is much yet to be understood about the details of why and how the diverse life histories of extant species have evolved, and there are plenty of theoretical and experimental challenges to be met. As we observed earlier, there is a natural attraction to the idea that aging is programmed, because developmental programming underpins so much else in life. Yet aging truly is different from development, even though developmental factors can influence the trajectory of events that play out during the aging process. To interpret the full complexity of the molecular regulation of aging via the nonprogrammed theories of its evolution may be difficult, but to do it using demonstrably flawed concepts of programmed aging will be impossible.

Given that the author here has in the past been among those who dismissed the SENS initiative as an approach to treating aging by repairing damage, it is perhaps a little amusing to see him putting forward points such as this one: “despite the cogent arguments that aging is not programmed, efforts continue to be made to establish the case for programmed aging, with apparent backing from quantitative models. It is important to take such claims seriously, because challenge to the existing orthodoxy is the path by which science often makes progress.” Where was this version of the fellow ten years ago?

Reason is the founder of The Longevity Meme (now Fight Aging!). He saw the need for The Longevity Meme in late 2000, after spending a number of years searching for the most useful contribution he could make to the future of healthy life extension. When not advancing the Longevity Meme or Fight Aging!, Reason works as a technologist in a variety of industries.
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This work is reproduced here in accord with a Creative Commons Attribution license. It was originally published on FightAging.org.
A Critique of Russell Kirk’s “Libertarians: The Chirping Sectaries” (2009) – Article by G. Stolyarov II

A Critique of Russell Kirk’s “Libertarians: The Chirping Sectaries” (2009) – Article by G. Stolyarov II

The New Renaissance Hat
G. Stolyarov II
Originally Published June 28, 2009
as Part of Issue CXCVIII of The Rational Argumentator
Republished July 24, 2014
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Note from the Author: This essay was originally published as part of Issue CXCVIII of The Rational Argumentator on June 28, 2009, using the Yahoo! Voices publishing platform. Because of the imminent closure of Yahoo! Voices, the essay is now being made directly available on The Rational Argumentator.
~ G. Stolyarov II, July 24, 2014
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Russell Kirk’s 1981 essay, “Libertarians: The Chirping Sectaries,” is a shallow, unsophisticated ad hominem attack on the American libertarian movement. It contains an abundance of fallacies, mischaracterizations, false blanket generalizations, and outright lies about libertarians. Moreover, its intentions are hostile and destructive: Kirk wishes to prevent the possibility of what might have been productive intellectual and practical cooperation between libertarians and some of the more reasonable conservatives. Here, I will endeavor to thoroughly refute Kirk’s arguments and to show that libertarians are not the chaos-loving demons Kirk depicts them as being.

Kirk begins his essay with a manner of intellectual intimidation, claiming that conservatives form a “majority” of the American public, while libertarians constitute a “tiny though unproscribed minority” (345). During the time the essay was written, the latter may have well been true – although undoubtedly the number of libertarians has increased since then and especially since Kirk’s death in 1994. After all, Ron Paul gathered approximately 1.2 million votes in the 2008 Republican primaries – meaning that while libertarians are still a minority, they are not a tiny minority, but are rather somewhere on par with American Jews. The former claim – that conservatives constitute a majority of the American public – is unlikely to be true. But even if it were, what is the point of Kirk’s including it in a paper comparing the contents and the merits of the two ideologies? Surely, the truth of an idea is independent of the number of its adherents. Is it Kirk’s purpose to say to libertarians, “We are more numerous than you, and you exist at our mercy? How generous we are for not proscribing you!” Or is it to make the argument, “Most people agree with it, so it must be right!”? (I am sure that Kirk would disagree with the same statement when it came to popular music, clothing, or lifestyles.) Suffice it to say, the inclusion of this comparison is not a logically necessary part of Kirk’s argument and serves to simply poison the well against libertarians by appealing to the lower prejudice in some reason that might (i.e., numbers in elections) makes right.

Judging by the detestable behavior of the Religious Right and the so-called “conservatives” of the Bush administration in recent years, I am all too tempted to agree with Russell Kirk’s thesis that conservatives and libertarians have nothing fundamental in common, but this is far too hasty a judgment in my more thoroughly considered opinion. While many conservatives in the United States – especially many conservative opinion leaders – are proto-fascistic in their agendas, many others are decent, reasonable, and well-intentioned. While the former yearn for the Ancien Regime union of a militant church and an absolutist state, the latter at least claim to be espousing the principles of the American founding – life, liberty, and the pursuit of happiness. It is for the sake of the latter kind of conservatives that I write this essay, urging them to reject Kirk’s insular and alienating claims and find some common ground – any common ground they can – with libertarians.

Kirk alleges that libertarians “carry to absurdity the doctrines of John Stuart Mill,” (345) thereby equating libertarianism with Mill’s utilitarianism. While Mill’s philosophy certainly has many elements that many libertarians would find praiseworthy, there are many other intellectual sources for libertarianism – many of whom would have serious disagreements with Mill and the other extremely famous utilitarian, Jeremy Bentham. The foundation for libertarianism that differs most from Mill’s thinking is the natural rights philosophy, whose varieties are espoused by John Locke, Ayn Rand, Murray Rothbard, and many others. Even if one does not follow the natural rights route, one does not have to embrace Mill’s and Bentham’s formula of “the greatest happiness for the greatest number.” One can be a libertarian for reasons that have nothing to do with individuals’ subjective emotional states. For instance, one can argue that in a libertarian society, individuals will be wealthier, more productive, more moral, less violent, more refined, more differentiated from one another, or longer-lived – and any of these can be seen as ends apart from happiness if one is inclined to so consider them. I myself am an advocate of natural rights on a consequentialist foundation; I believe that absolutely embracing the principle of natural rights will enable people to maximally pursue and extend the most important of all values – the life of each individual. My kind of libertarianism does not depend on how anybody feels, and for me the existence or non-existence of the individual is more important than his happiness or lack thereof – although happiness is nice, too. Moreover, unlike many utilitarians, I do not ascribe the same degree of “valuableness” to all individuals, although I do believe that all individuals are worthy of a baseline level of respect for their natural rights and a baseline level of common courtesy. There are about as many kinds of libertarianism as there are libertarians, and Kirk is simply wrong to reduce all libertarianism to the thought of one person – even a brilliant person such as Mill.

While Kirk is not far from the truth when he alleges that libertarians consider personal freedom “as the whole end of the civil social order,” (345) he is grievously mistaken when he claims that libertarians also consider it the whole end “of human existence” (345). To most libertarians, freedom in itself is a means, not an end. Freedom serves to enable the individual to pursue and attain other values – such as prosperity, self-improvement, intellectual endeavors, personal relationships, esthetic enjoyment, and entertainment – without needing to fear the coercive interventions of others. To paraphrase Rothbard, freedom may be the highest political end, but it not the highest of all ends. Rather, libertarians recognize that the political sphere is best suited for the attainment of freedom, but is miserably suited to the attainment of any other end, as numerous failed experiments presupposing the contrary have demonstrated.

While I, a libertarian, have serious disagreements with aspects of Mill’s utilitarianism, I also have a great respect for Mill and find it necessary to defend him against some of Kirk’s attacks. Kirk heaps invectives on Mill’s upbringing by a “sour,” “austere,” and “doctrinaire” father, who gave him a better education that Kirk or possibly anyone else ever had. This is not an insult to Kirk, as few can equal the genius of John Stuart Mill, but I do find it rather disconcerting that Kirk does not respect Mill’s colossal erudition. While Kirk acknowledges Mill’s breadth and depth of learning, he alleges that “his intellect was untouched by the higher imagination” and that “Mill became all head and no heart” and “turned into defecated intellect.” What base and shallow accusations – especially coming from a man whose lack of imagination led him to disdain all of the wonderful possibilities of modern technology – including automobiles, highways, television, and computers. Premodern conservatives often accuse libertarians of having no imagination, while at the same time disdaining the technology that has cured so many great human ills without even knowing much about that technology and the ways in which it might be used beneficially. Moreover, I do not consider it having “no heart” to believe that human lives and human societies could be fundamentally and qualitatively better than they currently are – a notion that conservatives of Kirk’s stripe, believers in a fixed, unchangeable human nature and human social dynamics – emphatically reject. Embracing premodern conservatism amounts to a resignation to the massive human death, disease, conflict, and misery that have pervade the world since before recorded history. Embracing libertarianism offers an eventual way to rid ourselves of many of the perils we presently face. You decide which position displays more “heart,” if by “heart” one means a compassion for human beings and a desire to eradicate the suffering they do not deserve.

Kirk compounds his vitriol by mentioning Mill’s attachment to another man’s wife – forgetting that Mill did not actually do anything to infringe upon her marriage until her husband’s death dissolved it. It is not a mark of vice to simply have a desire which lacks legitimacy or may pose complications if actualized; it is only a mark of vice to act on this desire – which Mill did not. Mill was indeed the paragon of personal virtue; he delayed his gratification until he could do so in a manner that would not be adulterous and would not harm any human being. The same could not be said of many popular conservative leaders today – hypocrites, adulterers, money launderers, petty and large tyrants, and militant advocates of destruction. While Kirk himself was a moral though oddly dogmatic character in his personal life, the worldview he demands had many far less admirable exponents.

The essence of Kirk’s criticism of Mill’s absolute principle that the sole purpose of government force is to prevent harm inflicted by some against others is that liberty is desirable in some cases, but not desirable in others. Yet, who is to decide in which cases liberty is desirable? Can we trust any human being, however virtuous, to make that decision – whose consequences can be grievous for others – and to implement it using the force of the state? While some people are clearly more rational and virtuous than others, no person is free of flaws. The purpose of libertarianism is to minimize the impact on others that any given person’s flaws might have. It is impossible to reliably prevent an individual’s follies damaging himself, but libertarianism endeavors to confine that damage solely to himself to as great an extent as possible. It is thus that each man may govern himself as he pleases, for good or for ill, but when it comes to governing others as a master and not an impartial referee, the potential for and magnitude of damage is far too great – as history repeatedly teaches us.

The fascistic strain in Kirk comes out when he writes, “It is consummate folly to tolerate every variety of opinion, on every topic, out of devotion to an abstract ‘liberty’; for opinion soon finds its expression in action, and the fanatics whom we tolerated will not tolerate us when they have power” (346). I do not see the problem here, for words and ideas are different from actions. One may hold fanatical or simply wrong ideas and express them using words, but this does nothing to change the state of society until the ideas are actually implemented. In a libertarian society, it is legitimate to use force to stop any implementation of coercion – so where is the problem? The moment the fanatics begin to use violence, they get punished; until then, they are merely stating their opinions. Since their ideas are false, they can be countered with true ideas; the battle at this stage should occur entirely on the level of voluntary persuasion, and force should only be used when force has been initiated. To claim that opinion necessarily finds its expression in action is absurd. If I believe that I ought to have a club sandwich, that does not mean that I will go out and get it; there may be obstacles in my way that I cannot overcome – such as poor weather or pressing work commitments. Moreover, what I mean by a club sandwich might not be what you think I mean by a club sandwich. Maybe I mean a sandwich that looks like a club, or a sandwich that is eaten in a social club or off of a golf club, so what you think I want may not be what I actually want. Whenever any two people use words, the definitions of those words may be so highly peculiar to each individual that it becomes impossible to predict in advance how any given person will be motivated by any given idea. Human actions, not human ideas, can be known with certitude – and there is no deterministic pathway by which a given idea becomes translated into any given action.

But, ironically enough, Kirk’s brand of conservative is precisely the kind of intolerant fanatic who would use overwhelming force if he were to achieve power – force that would be used to abolish numerous technological advances, mandate religious belief and observance, persecute non-coercive lifestyle choices such as premarital cohabitation, homosexuality, and marriage outside of mainstream churches, and require theological instruction for the masses. Anything that the center and far left are doing today to coerce the American people would pale in comparison to a premodern conservative theocracy in the United States. But suffice it to say, a person who is intolerant and advocates persecution of contrary opinions rarely does so on a whim; he typically believes the contrary opinions to be in some way dangerous if implemented. So Kirk’s position is no different in kind from the position of an Islamic fundamentalist theocrat — say, a Taliban cleric or an Iranian ayatollah, who also considers opinions contrary to his own to be very dangerous indeed, especially when it comes to the “higher things,” if they were put into practice. Kirk might impose different prohibitions from the Islamic fundamentalists, and to a different degree, but his mode of thinking is quite similar.

Kirk believes that the great danger of our time is “the lust for novelty; and that men will be no better than the flies of a summer, oblivious to the wisdom of their ancestors, and forming every opinion merely under the pressure of the fad, the foible, the passion of the hour” (347). But this is precisely what libertarianism helps protect us against! By having freedom from coercion, the individual is protected if he chooses to defy societal fads! If the past does indeed contain much wisdom (and I believe it does), then those who refer to it will live more successful lives – if they are not punished for doing so or forced to do otherwise. By establishing the state as an agency primarily working to prevent this kind of compulsion, libertarians ensure that every individual can become as erudite, sophisticated, long-term-oriented, and respectful of the great things that occurred in the past as possible. Most libertarians acknowledge an intellectual heritage that stretches back for millennia – with vestiges of libertarian thinking found in Socrates, Diagoras, Aristotle, Theodorus, Epicurus, Lucretius, Cicero, and many other thinkers of antiquity. Moreover, most libertarians eagerly embrace the technical accomplishments of our ancestors – the technology we enjoy today in all aspects of our lives – as well as their societal accomplishments, such as the elimination of absolute monarchy, the separation of church and state, the abolition of slavery, the emancipation of women, and the great diminishment of racial and ethnic discrimination.

Kirk then contradicts what he just wrote in the previous paragraph by lamenting that “The perennial libertarian, like Satan, can bear no authority temporal or spiritual. He desires to be different, in morals as in politics” (347). So what do you want, Dr. Kirk? You seem to dislike people blindly following fads, but then you also resent them being different! You need to pick one or the other, because the two possibilities are mutually exclusive and encompass the complete set of possible outcomes. One is either able to be different, or one is not. If one is able to be different, then one may decide not to follow a self-proclaimed authority in matters that do not involve coercing others. If one is not able to be different, then one may not be free to defy the cultural authorities that dictate the ever-changing fads that Kirk criticizes.

Kirk proceeds to make the stale and hackneyed equation of libertarianism with libertinism (347), an accusation that requires only a modicum of empirical observation and/or study of the abstract theory of libertarianism to debunk. Many libertarians – including, as we have seen, John Stuart Mill – were and are impeccably moral in their personal lives and acknowledge that their range of desirable behavior in society is limited by moral principles so as not to harm others. Many libertarians also care about their reputations and personal respectability and so will not act in complete disregard of the opinions and preferences of others. To the extent that they desire to get along with their friends, co-workers, and acquaintances, many libertarians voluntarily embrace certain kinds of conventions and modes of behavior – but they reserve the right to violate or modify those conventions if it makes rational sense to do so. I personally follow a great deal of societal conventions that are not legally mandated, but I do not believe that it is inherently wrong to defy some of these in certain circumstances. Where human values and conventions conflict, the conventions need to go; in most other cases, there can be a pleasant coexistence of the two.

The further Kirk delves into this essay, he states a blatant lie. He alleges that “the typical libertarian of our day delights in eccentricity – including, often, sexual eccentricity” (347). Doubtless, some libertarians exhibit sexual eccentricity, but the typical libertarian? Would Kirk, if he were alive today, dare to make this generalization of all, or even most, of the 1.2 million people who voted for Ron Paul in 2008 – a reasonable estimate of the number of libertarians in the United States? My observation has been quite different: most libertarians are more sexually modest than the general public in the United States. The reason for this may have less to do with libertarianism as a doctrine, but rather with the fact that libertarianism is an intellectual doctrine and requires a great deal of mental sophistication to grasp. More intellectual people are also typically more sexually modest – so libertarians, having a greater proportion of intellectuals among them than the general public, are typically more sexually modest. It can also be said that conservative and left-liberal intellectuals tend to be more sexually modest than the general public, although conservative and left-liberal politicians are far from being so. But Kirk does not say one word in criticism of the sexual eccentricities of conservative politicians…

Kirk also establishes an intellectual strawman. He writes, “The final emancipation from religion, convention, custom, and order is annihilation…” (347). But few, if any libertarians advocate complete emancipation from any of these; they simply want the freedom to choose how, when, and if to adhere to them. Some libertarians are religious, and some are not – but no libertarian wants to eliminate religion, especially through coercion. The same goes for adherence to non-coercive customs and conventions. After all, many libertarians celebrate traditional holidays and hold doors for people! Likewise, most libertarians subscribe to Friedrich Hayek’s understanding of a spontaneous order in society – an order that is not centrally or consciously planned but nonetheless emerges out of the interactions of millions of human beings. It is impossible to eliminate every kind of spontaneous order, although these orders do evolve and replace one another over time. But no libertarian wants to jettison all order. It is Kirk’s primitive equation of order with top-down planning – what Hayek calls taxis – and more particularly, with central planning at a society-wide level – that lies at the basis of his accusation.

Kirk, and G. K. Chesterton, to whose story “The Yellow Bird” Kirk refers (347-348), misconstrue the meaning of liberty as the freedom from all limitations. They argue, instead, that limitations are quite necessary even to the very survival of the human organism. This is not controversial, but it is beside the point. The question is, rather, should somebody else be able to dictate to an individual what his limitations ought to be and to punish that individual for having a different understanding and/or acting on it? Most of us – the ones who are still alive, at least – want some limitations in our lives, which we structure according to definite patterns that we do not like to see infringed on. The alternative we face is whether we get to plan our lives, or whether somebody else gets to do it for us. It may well be that some amount of government action is necessary to give every individual the maximum possible sphere in which he gets to make his own decisions. I certainly do not reject all government, and I am even a state employee, because I think that certain kinds of protections afforded by government can maximize individual liberty. Some libertarians, the anarcho-capitalists, will disagree with me here – but virtually all libertarians will agree that the purpose of political institutions, whether they be governmental or decentralized, competing, and private, is to protect every individual’s ability to choose the limits to which he will be subject, with the exception of the inviolable limitations of not harming others and not infringing on their ability to have a similar level of choice.

Moreover, there are always the limitations posed by the laws of nature – laws that cannot be violated, although they can be used creatively to achieve our purposes. To get anything of substance done in this world, one needs to have a thorough understanding of natural laws – the laws of physics, chemistry, biology, economics, ethics, and even to a certain extent esthetics. In the words of Francis Bacon, “Nature, to be commanded, must be obeyed.” It does not work to simply wish away the limitations posed by the laws and phenomena of nature. Rather, we ought to work within those limitations to make a better existence for us all. Libertarianism does not see itself as opposed to the limitations of natural law. Quite the contrary, libertarians – even some of the utilitarians among them – consider their ideas derived from the laws of nature, with their inherent limitations. After all, if libertarians truly did not believe in limitations, they would say that socialism could work if people wanted it to work – since socialism not working despite people’s best intentions is surely a limitation to what is possible!

More than halfway through the essay, Kirk comes to his senses and acknowledges that there are some respectable libertarians out there “who through misapprehension put up the cash for the fantastics” (348). Kirk believes that these people are really “conservative[s] with imperfect understanding of the general terms of politics” (348). I would give these individuals, whom Kirk does seem to respect, a bit more credit than to think that they are simply duped by the more objectionable elements of the libertarian movement. If these gentlemen are so smart, they must know what they are doing and must have good reasons for doing so. Perhaps the other libertarians whom they support are not as bad as Kirk supposes, or perhaps the gentlemen do not as readily support the caricatured doctrinaire libertarians as Kirk asserts. Either case, or a combination of both, is entirely plausible. In every movement of any decent size, there will be fanatical, irrational, and dangerous people; I have met some of those among libertarians as well, and I do not support them or their agendas. On the other hand, there are many people whom Kirk considers “eccentrics” (this is a negative term for Kirk) who I believe are delightful, reasonable, and sane individuals. It is true that many libertarians spend too much time developing their abstract theory and not enough time attempting to implement it in the real world – but some libertarians have recognized this and are beginning to work – often quietly and indirectly – toward more tangible objectives than an ideal minarchist state or pure and functional market anarchy. But the lack of practicality among some libertarians should not be a condemnation of libertarianism itself; it may simply be a natural outcome of the politically marginalized status that most libertarians consider themselves to have. If they can only effectively think and write at this stage, then this is what they will devote their attentions to.

Following his disclaimer, Kirk makes his case for why an intellectual alliance between libertarians and conservatives is undesirable. He believes that libertarians are “mad” and exhibit “lunacy” and besides are so small a minority that they will have no impact on American politics, but one should not want to be associated with them and their “lunacy” (349). He also accuses libertarians of splitting into ever-smaller sects and rarely coalescing again. Libertarian sectarianism is, alas, all too prevalent a phenomenon for my liking – and Kirk’s criticism here has some justice as applied to contemporary libertarianism. However, libertarians are no longer a minority so insignificant as to be dismissed and have no impact. With such highly influential and wealthy libertarians as Richard Branson, Peter Thiel, T. J. Rodgers, and Charles Koch – multi-billionaires, all – on the international business scene, libertarianism can no longer be dismissed as a fringe movement. (An impressive list of libertarian celebrities has been published by Advocates for Self-Government.) The number of libertarians is growing – especially among the intellectual and economic elite – while the number of conservatives is constant or declining. I say this to refute Kirk’s allegation that libertarianism will always be insignificant and ineffectual. Moreover, the more successful libertarians – the people who have accomplishments outside the realm of developing libertarian theory – also tend to be less sectarian, so it is possible that a natural selection process will lead those libertarians to assume increasingly more influential positions in the movement.

As for the accusation of the madness of libertarians, it is an ad hominem attack and is simply unfair. I could easily say the same about Kirk’s belief that cars are “mechanical Jacobins” and his complete rejection of television and computers. I will not say that this belief is madness – just a difference of opinion. I say this because, while Kirk’s ideology seems thoroughly irrational and false to me, I do not believe that anyone can say, from his vantage point, that the vantage point of another constitutes madness. This aids neither intellectual progress nor mutual good will among people. Every person – irrespective of the content of his thoughts, has reasons for thinking the way he does. Rather than dismissing him as mad, it is more constructive to try to understand his position – for we must, after all, coexist in the same world, preferably without exerting brutal violence upon one another. This is the purpose of civil discussion – to establish a level plane of respect and consideration for all the participants and to evaluate ideas based on their content, not on name-calling. Ad hominem attacks, such as the accusation of madness, destroy the level plane of discussion in an attempt to relegate one of the participants to an automatically less respectable position. This leads to intellectual bullying and bravado by the party that performs the diminution, but it does not establish any truth, nor contribute to any mutual improvement.

Now I will refute, point by point, Kirk’s more specific arguments for why an alliance between libertarians and the more sensible conservatives is not possible.

1. Kirk writes, “The great line of division in modem politics – as Eric Voegelin reminds us – is not between totalitarians on the one hand and liberals (or libertarians) on the other; rather, it lies between all those who believe in some sort of transcendent moral order, on one side, and on the other side all those who take this ephemeral existence of ours for the be-all and end-all-to be devoted chiefly to producing and consuming” (349). I will not here address the controversy between the believers in the transcendent and those who consider this world to be sole and primary. However, I will note that politics concerns this world and the manner in which people interact in it. Thus, in the political sphere, any considerations of whether anything besides this world exists could and should be irrelevant. The purpose of politics is to establish an order here that fulfills certain desired characteristics. I fail to see why people of different metaphysical beliefs would necessarily never agree on what the desired state of affairs in this world ought to be. We all believe in this world, after all, and – despite the disingenuous protestations of some on the Religious Right – we all consider this world important.

2. Kirk writes, “In any society, order is the first need of all. Liberty and justice may be established only after order is tolerably secure. But the libertarians give primacy to an abstract liberty. Conservatives, knowing that ‘liberty inheres in some sensible object,’ are aware that true freedom can be found only within the framework of a social order, such as the constitutional order of these United States. In exalting an absolute and indefinable ‘liberty’ at the expense of order, the libertarians imperil the very freedoms they praise” (349). Kirk believes that order has primacy over liberty – but any order? What about the order of the Aztec empire, with its hundreds of brutal human sacrifices per day. What about the caste system – the traditional order of India – accompanied by ritual widow burning, violence against families that paid insufficient dowries for their daughters, and inhuman treatment of “untouchables”? What about the order of some eras of traditional China, characterized by female foot binding and aversion to foreign contact? What about the order of a totalitarian dictatorship? Surely, not all kinds of order are desirable – and some are even less desirable than that big unattainable bugaboo of complete chaos. If Kirk is willing to admit (and he probably would be) that not every order is a good order, then it follows that an order is only good if it is good for something.

Then the question must be asked as to why we want order in societies in the first place. We need societal interaction in order for us to rise above the level of bare subsistence we could attain under autarky. By engaging in societal cooperation, we each want something that the others have. Thus, we require mechanisms by which we can engage in only interactions that benefit all of us and avoid, as much as possible, those interactions that harm some of us. Most of these mechanisms are private, consensual, and even informal. But some human interactions – the violent ones – are so powerful at overriding all the others that they must not be tolerated. Indeed, the society in which nobody uses violence against anybody else is the most desirable society. If we have a government, its legitimate purpose is precisely to make sure that as little violence as possible occurs by establishing a method of promptly detecting and punishing initiations thereof. Historically, most governments have fallen miserably short of this goal and have indeed initiated much active harm – but some governments fulfill the role of protector from violence better than others. And we can always hope for and work toward future improvements. Order is undoubtedly important, but it is vital to have the right kind of order for fulfilling the primary goal of a society, which is the mutual benefit of everybody in it. But who defines the mutual benefit of everybody? Each person who fits under the umbrella description of “everybody” defines his benefit for himself, to the best of his reasoning ability. But in order to be able to pursue his definition of his benefit, every individual must have liberty. Therefore, the purpose of a political order is to preserve for each individual this liberty, so that – by partaking in the larger societal order – the individual can gain other values as well. Order and liberty are not mutually contrary, but order without liberty is not worth having; it is the enslavement of some to others.

3. Kirk writes: “What binds society together? The libertarians reply that the cement of society (sofar as they will endure any binding at all) is self-interest, closely joined to the nexus of cash payment. But the conservatives declare that society is a community of souls, joining the dead, the living, and those yet unborn; and that it coheres through what Aristotle called friendship and Christians call love of neighbor” (349). Kirk is being far too simplistic here. Why cannot both friendship and self-interest be necessary and important components for a society to work? What makes these two concepts in any manner opposed or mutually exclusive? Why can one not look out for one’s own well-being but also care about the well-being of others whom one considers friends? Virtually everybody does this, and I do not know of a single libertarian or conservative who believes that there is either no friendship or no self-interest in any actual or desirable society. Moreover, I do not know of any libertarian who believes that no dead person is important. After all, many illustrious libertarian thinkers have lived many generations ago! Moreover, I do not know of any libertarian who espouses complete apathy for the yet unborn. Self-interest, as well as friendship and consideration for the past and future, are universal human attributes; they are not peculiar to conservatives or libertarians.

4. Kirk writes: “Libertarians (like anarchists and Marxists) generally believe that human nature is good, though damaged by certain social institutions” (350). This is far from the truth. Perhaps only Jean-Jacques Rousseau – clearly not a libertarian – and his intellectual disciples held this view of human nature. Most libertarians do not believe that any universal normative judgment can be applied to the natures of all humans. Humans are neither universally good nor universally bad; rather, they have certain fairly common motivations and are channeled by internal and external incentives toward good or bad acts. As for my own more particular view, I believe that the term “human nature” is tautological and not particularly helpful, as I explain in this article.

5. Kirk writes: “The libertarian takes the state for the great oppressor. But the conservative finds that the state is ordained of God” (350). Kirk is wrong again about the libertarian view. Libertarianism per se does not condemn the state, although anarcho-capitalism does. Most libertarians are minarchists – advocates of a government limited to protecting individuals against the initiation of force. The state, so long as it confines itself to this role, is not an oppressor. When, however, it initiates force or fraud, libertarians begin to have issues with it. The “conservative” view that the state is ordained of God is rather alarming; it is in no manner distinguishable from the divine right philosophy that justified 17th-century absolutist monarchies in Europe. Surely, sensible conservatives will shy away from this view, if only for its glaring potential to be used by tyrants as a blank check to do anything they please – since they were ordained by God, after all. The sensible conservative will believe that the state is a manmade institution, subject to the possibility that it will be imperfect, unjust, or even on balance harmful. The sensible religious conservative will believe that, if God really is that great, he would not operate through the imperfections of human government – and, moreover, that his faith is most secure by being distanced as far from the state as possible.

Kirk further writes: “Society requires not only that the passions of individuals should be subjected, but that even in the mass and body, as well as in the individual, the inclinations of men should frequently be thwarted, their will controlled, and their passions brought into subjection. This can be done only by a power out of themselves; and not, in the exercise of its function, subject to that will and to those passions which it is its office to bridle and subdue. In short, a primary function of government is restraint; and that is anathema to libertarians, though an article of faith to conservatives” (350). This passage is a further example of Kirk’s fascistic leanings – the desire to subject not just people’s actions ­– but their will and passions. Thoughtcrime, anyone? The moment that the state goes beyond restraining what people do and instead endeavors to control what goes on inside their minds, it becomes not merely authoritarian but outright Orwellian. An old-fashioned autocrat is preferable to a government that thwarts men’s inclinations, controls their will, and brings their passions into subjection – which leaves men as nothing more than chunks of meat with no direction of their own, controlled entirely by the great puppetmasters to whom Kirk ascribes the enormous ability of so managing other human beings!

6. For me, the most unwarranted of Kirk’s objections to libertarianism is the following: “The libertarian thinks that this world is chiefly a stage for the swaggering ego; the conservative finds himself instead a pilgrim in a realm of mystery and wonder, where duty, discipline, and sacrifice are required-and where the reward is that love which passeth all understanding. The conservative regards the libertarian as impious, in the sense of the old Roman pietas: that is, the libertarian does not venerate ancient beliefs and customs, or the natural world, or his country, or the immortal spark in his fellow men. The cosmos of the libertarian is an arid loveless realm, a ’round prison.’ ‘I am, and none else beside me,’ says the libertarian. ‘We are made for cooperation, like the hands, like the feet,”‘ replies the conservative, in the phrases of Marcus Aurelius” (350).

I do not know whether it takes a “swaggering ego” to make presumptions that another person’s experience of the world is that of an “arid loveless realm” – but these certainly are swaggering presumptions on Dr. Kirk’s part! One can appreciate the numerous wonders, beauties, and possibilities of this world without unquestioningly adhering to custom and tradition, being willing to lose one’s life for millions of people whom one does not know but who happen to be in the geographical entity rather arbitrarily defined as one’s “country,” or believing in a supernatural personified entity who made us, knows everything, and can do anything. It is sheer ignorance to say that libertarians do not venerate the natural world; many of them base their whole worldview on the idea of natural law – and a substantial portion of them like trees and animals and sunsets, too. As for “the immortal spark in one’s fellow men,” which Kirk certainly means in a religious sense, some libertarians agree with Kirk, while others prefer to pursue a more reliable physical immortality in this world. Still others believe that we do not need immortality in order for what finite lifespans we have to still be the highest values can that exist. There are substantial differences of opinion among libertarians on this issue – but clearly, the reality does not justify Kirk’s characterization of all libertarians as ignoring everything that makes the world worth appreciating. As for cooperation, no libertarian advocates autarky and many, including John Locke, Ludwig von Mises, Friedrich Hayek, Ayn Rand, and Murray Rothbard, placed an explicit emphasis on the importance of societal cooperation to human flourishing. But this cooperation is among autonomous, independently conscious individuals – not “hands and feet” of a larger “body.”

Kirk further states, quite alarmingly, that an alliance with socialists is more preferable to conservatives like him than an alliance with libertarians: “The socialists at least declare the existence of some sort of moral order; the libertarians are quite bottomless” (351). The allegation that libertarians do not believe in a moral order is quite false and misleading. Most libertarians adhere to some explicit understanding of what is right and wrong for them and others to do – and all of then have an implicit understanding of this. One moral belief that is shared by all libertarians is that the initiation of force or fraud is wrong and should not be tolerated. Another common moral belief is that the life of each individual is a major – if not the major – moral value for its own sake, and not as the means to any other end. Another virtually ubiquitous libertarian moral value is that of honesty in one’s personal dealings – for no free-market economic system can thrive when people continually lie to and defraud one another. A wide variety of other moral values can be derived from the above in a myriad of ways.

Kirk continues to make false blanket characterizations of libertarians: “It was recently a plank in the platform of the Libertarian Party that expectant mothers should enjoy a right to abortion on demand; while to the reflecting conservative, the slaughter of innocents is the most despicable of evils” (351). While some libertarians do indeed support abortion rights, many others do not – myself included. Whether libertarians support the legality of abortion depends primarily on whether they consider the fetus to be a human person; if the fetus is a human person, then it has a natural right to life. If it is not a person, then it has no such right. Many libertarians are as strongly opposed to abortion as many conservatives, the Libertarian Party’s platform notwithstanding.

In the years since 1981, we have seen where the American conservative movement has gotten by refusing, in Kirk’s words, “to lie down, lamblike, with the libertarian hyenas” (351). (By the way, it seems rather strange for Kirk to first dismiss the libertarians as politically insignificant, but then to compare them to dangerous hyenas that would devour the conservative “lambs”!) By refusing to consider libertarian ideas, the American conservative movement has actively caused one of the greatest increases in illegitimate government activity in American history – including rampant deficit spending, the expansion of dangerous social programs, a disastrously-managed foreign war, torture, a surveillance state, restrictions on civil liberties, the precursors of hyperinflation, and enormous corporate bailouts. Russell Kirk’s intellectual influence may be felt in these developments by the discerning observer. If he were alive today, Kirk might protest that the depredations of the Bush administration were not what he wanted – but they are the logical outcome of the insular, intolerant, fascistic, and illiberal form of conservatism that Kirk promoted with considerable success. Conservatives have indeed had far more political power than libertarians in recent decades – and look where this brought us. Perhaps it is time to try something different.

Click here to read more articles in Issue CXCVIII of The Rational Argumentator.

How Time and Uncertainty Can Make Us “Antifragile” – Article by David Howden

How Time and Uncertainty Can Make Us “Antifragile” – Article by David Howden

The New Renaissance Hat
David Howden
January 26, 2014
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Antifragile: Things that Gain from Disorder, Nassim Nicholas Taleb (New York: Random House, 2012).

No two buzzwords define the present crisis more than “contagion” and “robustness” in the world of economists and policy wonks. The current interrelated nature of the financial system has bred a fragile situation where the success of the greater economy supposedly hinges on its individual components, such as banks that are too big to fail. To combat this fragility, economists have increasingly sought to build robust institutions. Such institutions will remain strong in the face of adverse effects if an individual component of the economy fails — be it subprime mortgages, sovereign debt, deposit-taking institutions or investment banks. This approach to the crisis stresses that if we cannot battle contagion, we had better construct strong institutions to weather future storms.

Nassim Taleb takes great issue with this approach in his new book Antifragile. His view is that constructing such so-called robust institutions is not sufficient as they continually fight yesterday’s battles. Instead the focus should be in building “antifragile” insti­tutions. Although often confused with robustness or resilience, an antifragile institution is not only unharmed by adverse events, but is actually strengthened by them. Building antifragile institutions will not only strengthen the global economic arena, but also have wide-ranging social applications.

Taleb’s latest work builds on two of his previous books, Fooled by Randomness (2001) and The Black Swan (2007). The common theme underlying all three is that there are events which are fundamentally unknowable — true uncertainties — in distinction to merely risky outcomes. Since we cannot know in advance what these events are, or what their effects will be, we should not exert too much effort in constructing contingency plans.

It is at this point that my first quibble with the book arises, and one I had with its predecessor The Black Swan. Taleb bifurcates between two definitions of uncertain events. On the one hand he invokes random or fundamentally unknowable events. Readers of this journal will be sympathetic to this definition of uncertainty, bearing close resemblance to Mises’s own use of “case probabilities”[1] (1949, pp. 110–113), or Shackle’s (1949) use of “non-seriable, non-divisible” events.[2] On the other hand, it is also clear that Taleb also thinks of uncertain events as merely rare events. These are events located on the fat or long tails on a probability distribution. Even though he thinks that these represent true uncertainty, there is no doubt that he is referring to funda­mentally probabilistic events.

This quibble aside, one can apply much of the remaining work cognizant that Taleb’s terminology differs from that of the Austrian economists, and also that the domain of his theory is slightly different than he thinks.

Something is “antifragile” if it gets stronger from a negative event. What are some examples? Taleb applies the prefix of his book liberally to outline what choices we should be pursuing. Indeed, the body of the book gives a long list of antifragile actions that, at least on one level, boil down to doing the exact opposite of what you think you should be doing.

Authors should be shocked to learn that there is almost no news that can harm a writer’s credibility, and that any publicity is good publicity (pp. 51–52). Corporations and governments that try to “reinstill confidence” should not be trusted because they would do so only if they were ultimately doomed (p. 53). Children shouldn’t be on antidepressants as this removes a source of learning from the life experience and thus make individuals less capable of dealing with unwanted events later in life (p. 61). The sinking of the Titanic was a positive disaster as it put shipbuilders on their toes, and possibly avoided an even larger accident later (p. 72). The general theme is that those who make errors are stronger than those who don’t — reliability, or antifragility — only comes when something is regularly tested by an unwanted event.

The theory has merit. Consider this lesson applied to central bank policies. In the wake of the dot-com bust a concerted effort by the world’s central banks flooded the global financial system with liquidity. The liquidation of assets that should have happened never did, and as a result lenders and borrowers didn’t learn their lesson on prudential money management. The seeds were sown for the larger crisis starting in 2007–2008 because a simple lesson was not learned when the financial system’s problems were still in relative infancy.

There is much to learn from this book and much to be wary of. At the end of the day, Taleb reckons the best test of an anti-fragile institution is Mother Nature mixed with a healthy dose of time. In chapter 21 he criticizes the prevailing orthodoxy of “neomania,” the mistaken belief that newer is better. Those institutions that have existed the longest are, in all likelihood, those that will continue to exist into the future. As an example, imagine that the year is 1988 and answer the following: which structure will last the longest, the Berlin Wall or the Great Pyramid of Giza.

In this test, as in much of the book, Taleb asks too much and too little. He asks too much because those institutions with the most longevity were once upon a time also the ones with the least. There must be a better test than longevity, as it only pushes the problem back in time to identify the source of antifragility. It cannot be turtles all the way down.

An applied example relevant to the present financial crisis would involve looking for those institutions that have been strengthened by current affairs. The crisis has taken its toll on many aspects of the financial services industry, but some general types of products have proven surprising resilient, or antifragile. Governments with prudent fiscal policies — e.g., Germany, Switzerland and Singapore — have fared well and indeed been strengthened as finances deteriorate in more profligate countries. Investment funds capitalizing on what were once unorthodox strategies, such as gold and other precious metal holdings, have out-performed more traditional investments as the financial crisis worsens. Readers of this journal will also notice that their stock in Austrian economics has increased in value over the past decade. Question begging and failed policies developed through more mainstream theories have led many former outsiders to the ranks of Austrian economists. An unwanted event caused an offsetting positive outcome in all these scenarios. That is what being antifragile is about.

Taleb asks too little by not exploring the true sources of antifragility. He comes close, alluding in many places that market-based institutions better combat the false security that planned institutions create. Explaining and elaborating on this link would do much to take the fundamental merits of antifragility to the next level. It would be, however, fodder for another book.

References

[1] Mises, Ludwig von. 1949. Human Action: A Treatise on Economics. Auburn, Ala.: Mises Institute, 1998.

[2] Shackle, G. L. S. 1949. Expectations in Economics. Westport, Conn.: Gibson.

David Howden is Chair of the Department of Business and Economics and professor of economics at St. Louis University’s Madrid Campus, Academic Vice President of the Ludwig von Mises Institute of Canada, and winner of the Mises Institute’s Douglas E. French Prize. Send him mail. See David Howden’s article archives.

This article first appeared in the Fall 2013 edition of The Quarterly Journal of Austrian Economics.