We Should Stop Preventing All Wildfires
A Futures Thinking Perspective
Mar 18, 2026
Credit Britannica
By preventing all wildfires, we paradoxically cause more harm in the long run. By getting treatment at the doctor, you’re more than likely worse off. Why?
This Week’s Focus: Futures Thinking
What You'll Understand: The present is full of fragility. To ensure a successful future, we must establish methodologies to address them.
Reading Time: 32 minutes for full analysis + key takeaways highlighted throughout
Key Question: In what ways is the world around us fragile, and what can we do to solve these issues?
My Take: Humans are responsible for most of the fragility in our lives. We’re incredibly blind to this fact, although it shapes every aspect of life around us. From companies failing to people dying to wildfires running rampant to supply chain disruptions to extreme weather events to the downfall of the world’s most powerful nations, the elements of fragility are everywhere. Once we recognize this, we can use resilience (Tenet #8) and antifragility (Tenet #9) to address these issues both reactively and proactively.
Quick Context: This deep dive connects to our Futures Thinking series (intro here). New to Brainwaves? We explore the forces reshaping our world across venture capital, energy, space, economics, intellectual property, and philosophy. Subscribe here for bi-weekly deep dives plus weekly current events.
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Let’s dive in.
Many years ago, there lived a boy who did a brave deed. His name was Peter, and he lived in Holland, a country by the sea.
In Holland, the sea presses in on the land so much that the people built big walls of earth and stone to hold back the waters. Every little child in Holland was taught that these big walls, called dikes, must be watched at every moment. No water must be allowed to come through the dikes. Even a hole no larger than your little finger was a very dangerous thing.
One afternoon in the early fall, when Peter was seven years old, his mother called to him. “Come, Peter,” she said. “I want you to go across the dike and take these cakes to your friend, the blind man. If you go quickly, you will be home again before dark.”
Peter was happy to go, because his friend, the blind man, lived alone and was always glad to have a visitor. When he got to the blind man’s home, Peter stayed awhile to tell him of his walk along the dike. He told about the bright sun and the flowers and the ships far out at sea. Then Peter remembered that his mother wanted him to return home before dark. So he said goodbye and set out for home.
As he walked along, he noticed how the water beat against the side of the dike. There had been much rain, and the water was higher than before. Peter remembered how his father always spoke of the “angry waters.”
“I suppose Father thinks they are angry,” thought Peter, “because we have been keeping them out for so long. Well, I am glad these dikes are so strong. If they gave way, what would become of us? All these fields would be covered with water. Then what would happen to the flowers, and the animals, and the people?”
Suddenly, Peter noticed that the sun was setting. Darkness was settling on the land. “Mother will be watching for me,” he said. “I must hurry.” But just then he heard a noise. It was the sound of trickling water! He stopped, looked down, and saw a small hole in the dike, through which a tiny stream was flowing.
A leak in the dike! Peter understood the danger at once. If water ran through a little hole, it would soon make a larger one; then the waters could break through, and the land would be flooded!
Peter saw what he must do. He climbed down the side of the dike and thrust his finger in the tiny hole. The water stopped!
“The angry waters will stay back now,” said Peter. “I can keep them back with my finger. Holland will not be drowned while I am here.”
But then he thought, “How long can I stay here?” Already it was dark and cold. Peter called out, “Help! Is anyone there? Help!” But no one heard him. No one came to help.
It grew darker and colder still. Peter’s arm began to grow stiff and numb. “Will no one come?” he thought. Then he shouted again for help. And when no one came, he cried out, “Mother! Mother!”
Many times since sunset, his mother had looked out at the dike and expected to see her little boy. She was worried, but then she thought that perhaps Peter was spending the night with his blind friend, as he had done before. “Well,” she thought, “when he gets home in the morning, I will have to scold him for staying away from home without permission.”
Poor Peter! He would rather have been home than anywhere else in the world, but he could not move from the dike. He tried to whistle to keep himself company, but he couldn’t because his teeth chattered with cold. He thought of his brother and sister in their warm beds, and of his father and mother. “I must not let them be drowned,” he thought. “I must stay here until someone comes.”
The moon and stars looked down on the shivering child. His head was bent and his eyes were closed, but he was not asleep. Now and then he rubbed the hand that was holding back the angry waters.
Morning came. A man walking along the dike heard a sound, something like a groan. He bent down and saw the child below. He called out, “What’s the matter, boy? Are you hurt? Why are you sitting there?”
In a voice faint and weak, the boy said, “I am keeping the water from coming in. Please, tell them to come quickly!”
The man ran to get help. People came with shovels to fix the dike, and they carried Peter, the little hero, home to his parents.
’Tis many a year since then; but still,
When the sea roars like a flood,
The children are taught what a child can do
Who is brave and true and good. For all the mothers and fathers
Take their children by the hand
And tell them of brave little Peter
Whose courage saved the land.
- The Tale of the Dutch Boy and the Dike, Core Knowledge
The future actively shapes our lives. Historically, the way humans have thought about and approached the future has been flawed. Futures Thinking is a modern approach to the future, rethinking how humans think about and approach the future.
Rather than trying to predict specific future events, Futures Thinking encourages a shift in how we conceptualize the future itself—drawing on diverse cultural perspectives, foundational world characteristics, deep modern literature reviews, and recognizing that our present actions and narratives significantly influence future outcomes. Since most major life decisions are essentially bets on the future, adopting this framework could transform how we approach education, careers, relationships, and other essential aspects of life.
Today, our discussion focuses on how our world is set up and how these underlying characteristics shape everything that goes on, specifically on Futures Thinking Tenet #7: Fragile systems amplify their own vulnerabilities, increasing the risk of failure and worsening our cognitive limitations.
Credit Food Logistics
A SINGLE SHIP HALTS WORLD TRADE - IT’S OKAY TO DROP YOUR PHONE MORE - DON’T DRIVE YOUR CAR INTO WALLS
In March of 2021, the Ever Given, a container ship owned by the Japanese firm Shoei Kisen Kaisha and leased to the Taiwan-based shipping company Evergreen Marine, ran aground in the Suez Canal, blocking the canal for 6 days.
The 1,300 ft long, 224,000 ton ship was buffeted by strong winds and ended up wedged across the waterway with its bow and stern stuck on opposite canal banks, blocking all traffic until it was moved.
It’s estimated that around 12-15% of the world’s maritime trade passes through the Suez Canal, so the ramifications of this disaster affected nations across the globe. It’s estimated that this blockage tied up goods totalling over $70B. By the last day, over 350 ships were queued up to pass through the canal.
A single ship getting stuck in a narrow canal easily showcased the vulnerabilities of global trade. This is a perfect example of a structural fragility—where a massive system depends on a tiny, unredundant “chokepoint.”
As defined by Nassim Taleb in his book Antifragile, fragility is a property of systems, objects, people, countries, policies, thoughts, and more. Fragility is formally defined as anything that has more downside than upside from random events. In Taleb’s words, fragility “could be expressed as what does not like volatility,” or that which has vulnerability to volatility.
Drawing on principles discussed in previous Tenets, fragility could be expressed as what does not like volatility, randomness, uncertainty, disorder, errors, stressors, chaos, harm, “unforeseen” consequences, variability, chance, entropy, the unknown, turmoil, dispersion of outcomes, and critically, time.
For fragile things, volatility and shocks cause greater harm as their intensity increases. For instance, dropping your phone once from 12 feet is more damaging than dropping it 1 foot 12 times (e.g., 1x a 12 ft drop > 12x a 1 ft drop). As Taleb writes, “Your car is fragile. If you drive it into the wall at 50 miles per hour, it would cause more damage than if you drove it into the same wall ten times at 5 mph. The harm at 50 mph is more than ten times the harm at 5 mph.”
In other words, the effects of volatility and resilience to volatility are nonlinear. Fragile things are unaffected by the cumulative effect of minor deviations but are greatly affected by a single significant shock equivalent to the cumulative impact of the small shocks.
Another key aspect of fragility, which Taleb leverages in his core works, is its measurability. See, in the scenarios above, the risks present can be identified, but it’s almost always difficult to quantify their resulting impacts. Fragility, on the other hand, can be detected and, in many cases, measured.
In Taleb’s words, “You cannot say with any reliability that a certain remote event or shock is more likely than another (unless you enjoy deceiving yourself), but you can state with a lot more confidence that an object or a structure is more fragile than another should a certain event happen. You can easily tell that your grandmother is more fragile to abrupt changes in temperature than you are; that some military dictatorship is more fragile than Switzerland, should political change happen… And—centrally—you can even make the prediction of which one will last longer.”
Relating to Tenet #5, we can’t predict events, but we can identify fragilities, which gives us an edge in preparing for and addressing the future (as we’ll discuss in Tenets #8 and #9). In essence, instead of trying to predict (poorly) and calculate (inaccurately) future probabilities, we should focus on fragility (and, at the opposite end of the spectrum, antifragility).
Fragilities tell us what the results of events will be, not the events themselves. Actions and events have payoffs, and these are incredibly important to study. Take, for instance, the decision between two gambles. In the first, you have a 50% chance to walk away with $4 and a 50% chance to walk away with $0. In the second, you have a 1% chance to walk away with $100 and a 99% chance to walk away with $0. Expected values and probabilities indicate that the first option has a greater chance of paying out; however, most people presented with this decision will choose the second option.
Why? When deciding, humans base their decisions on payoffs, not probabilities. This is especially acute when payoffs are nonlinear (asymmetric).
Understanding the characteristics of fragility provides insights into the mechanics of every aspect of this world, from physical products (e.g., product failures, breakages, strain capacity, strengths) to politics (e.g., why some nations survive and others don’t) to nature (e.g., why some wildfires are detrimental and others are harmless) to our health (e.g., interfering to solve health concerns often hurts us more than helps) and more.
Credit Britannica
A COSTUME IS BIGGER THAN APPLE JUICE - WE SHOULD LIGHT MORE WILDFIRES - GOLDILOCKS SHOULD HAVE OPTIMIZED BETTER
I remember growing up when I was around 8-12 years old, sometime during the winter months, there was a group of older kids that went around our neighborhood one night playing the game “bigger or better.”
If you’re not familiar, you start with a small, insignificant item (like a penny), and you knock on a door and ask if they have something bigger (literally larger in size) or better (subjective to what they believe is “better”) than what you have, and then you trade them your item for that item.
When they came to our house, they brought us a 1-gallon bottle of apple juice, and we decided to go bigger and gave them my used die (think single dice) Halloween costume.
What, in reality, looks like a fun, youthful game on the surface contains many uncomfortable parallels to our modern society and the mindset that we’re never satisfied and that there's always something bigger or better out there to achieve. This is just one of many fragilities present throughout the world.
You’ve likely not noticed, but humans are arguably the most responsible for the world’s various fragilities—especially in our modern world. We constantly intervene when nothing is necessary, we pursue broad homogeneity which strips the world of variation, we prefer rigidity when flexibility is needed, we build in unnecessary layers which gunk up processes, we prioritize symptoms over underlying causes, we suboptimize, there’s almost always a lack of “skin in the game”, and we concentrate sources of randomness.
Fragility Cause #1: Interventions When They’re Not Necessary
The very first article I opened on this subject, a research piece by National Geographic on The Ecological Benefits of Fire, begins by framing the problem perfectly:
Off the bat, two of the three major causes of wildfires are human. But there are more problems we’re causing besides simply lighting the fires. For thousands of years, small forest fires have periodically been used to clear out dead organic material (the most flammable material), so it doesn’t have the opportunity to accumulate and cause larger damage.
In more recent history, settlers from across the globe (American, European, Australian, Asian, etc.) have suppressed these fires, seeing all fires as a source of harm—investing significantly in fire-fighting resources, including helicopter and plane-based retardant drops, parachuting smoke jumpers, heavy equipment, hand tools, etc.
However, in our great haste to stop all fires in the pursuit of safety, we’ve actually caused the opposite: the big fires now are much, much worse. For instance, the following graph from NASA depicts the trend over just the last 20 years:
Credit NASA
The root cause of the problem is humans. First, we start these fires, then we intervene when it’s unnecessary to put them out prematurely, causing much more harm in the long run. The concept of intervention is a careful balance. Let’s take the healthcare system as an example.
The healthcare system is oddly situated in many ways, especially in the United States. To put it plainly, we have the whole idea of care backwards. When providing medicine, we tend to over-intervene in areas where the benefits are minimal (think the common cold) and under-intervene in areas where intervention is necessary, like emergencies.
Using a fragility-based treatment approach, we should not be taking risks with near-healthy people, but we should take a lot more risks with those deemed at risk. If you hadn’t noticed the parallels to Tenet #1, there is a nonlinear relationship here. Phillip Tetlock explains the problem as follows:
We haven’t gotten better since then! This has become so bad that the word iatrogenic (referring to harm done by healers through their interventions) has steadily increased in usage since the 1920s, correlating highly with the continued development of modern medicine practices. Here’s a high-level version of a table Nassim Taleb includes in his book:
You still may not be convinced of the potency of this argument.
Perhaps the belief of 300+ million Buddhists would sway your thinking. The Four Noble Truths are the foundation of Buddhism, outlining life’s problem (suffering), its cause, its solution, and the path to that solution.
Point number two is exactly this point, simply reframed. As Noah Rasheta, author of Secular Buddhism: Eastern Thought for Western Minds, writes, “This is the cause of suffering: suffering emerged when we want life to be other than it is… we want life to conform to our expectations, and we experience suffering when it doesn’t.”
In other words, the cause of our suffering in life (which Buddhists believe is life’s main problem) is that we want life to be other than it is—we want to intervene to change life to be other than it currently is. Our tendency to intervene, whether we like it or not, has been ingrained in us as human beings for thousands of years.
One of the key problems with interventions is that the outcomes they produce don’t last. As Donella Meadows outlines in her book Thinking in Systems, “The trap is formed if the intervention, whether by active destruction or simple neglect, undermines the original capacity of the system to maintain itself. If that capability atrophies, then more of the intervention is needed to achieve the desired effect. That weakens the capability of the original system still more. The intervenor picks up the slack. And so forth.”
Intervention often creates a negative feedback loop, spiraling into increasingly fragile states. Quoting Meadows again, “If the intervention designed to correct the problem causes the self-maintaining capacity of the original system to atrophy or erode, then a destructive reinforcing feedback loop is set in motion. The system deteriorates; more and more of the solution is then required. The system will become more and more dependent on the intervention and less and less able to maintain its own desired state.”
As we’ll discuss in Tenet #9, intervention should occur only if it is certain that the outcome strengthens the system's underlying ability to shoulder its own burdens.
Fragility Cause #2: Pursuit of Homogeneity, Introducing a Lack of Variation & Disorder
A common illusion many humans operate under is the thought that randomness is risky and bad, and therefore should be eliminated. This could not be further from the case.
As we outlined in Tenet #1, change is a constant principle of life. To ignore or resist this change increases our vulnerability and constrains our opportunity to pursue emerging possibilities, limiting our options.
Similarly, simplifying the system to increase efficiency reduces the number of possible responses to shocks, volatility, and disturbances, thereby increasing its vulnerability.
Mainly through human intervention, the world's natural randomness and volatility (discussed in Tenet #2) have been suppressed, thereby increasing fragility. Taleb states this plainly, “We are fragilizing social and economic systems by denying them stressors and randomness.”
For instance, in many remodels and “upgraded” designs, humans have removed some or all emergency response mechanisms. The rationale posed is that they aren’t often used and are very costly. In the short term, this often doesn’t have any ramifications, and people feel justified in their actions. However, in the long run, they’ve drastically narrowed the range of conditions over which the system can survive, introducing further fragility.
By systematically removing uncertainty and randomness, humans are trying to make life much more predictable (as covered in Tenet #5). Taleb explains this perfectly:
To be clear, removing and artificially suppressing volatility makes the system more fragile. At the same time, the system exhibits no visible risks. On the surface, these systems look calm and collected, while underneath, they’re accumulating a large mass of silent, deadly risks. These systems, as Taleb details, are more prone to Black Swan events (and others described in Tenet #3).
Fragility Cause #3: Rigidity When Flexibility Is Needed
Adam Grant, in his book Think Again, expertly summarizes this problem:
We’ve all met people like this, who are stubborn to their own detriment. In many cases, this only increases the fragilities, leading to further pain, heartache, and failure.
Canadian ecologist C.S. Holling stated, “Placing a system in a straitjacket of constancy can cause fragility to evolve.” Donella Meadows employs this quote as one of the core tenets of her systems thinking methodology.
As she describes, “Any system, biological, economic, or social, that gets so encrusted that it cannot self-evolve, a system that systematically scorns experimentation and wipes out the raw material of innovation, is doomed over the long term on this highly variable planet.”
Rigidity prevents systems from undergoing the natural process of self-evolution, which, as discussed in Fragility Cause #2, reduces the variation within the society, further increasing its fragility.
Similarly, Brian Walker and David Salt, in their book Resilience Thinking, describe the four phases of a system’s adaptive cycle, including the rapid growth phase (depicted by rapid growth), the conservation phase (materials accumulate and fewer opportunities are available), the release phase (brought about when a disturbance exceeds the system’s resilience and breaks it apart), and the reorganization phase (the pieces of the system are renewed and reorganized).
The conservation phase is the critical one in which many fragilities are established, leading to the release phase when thresholds are breached. Specifically, during the conservation phase, growth has slowed, and the system's connectedness has increased.
As this happens, the system becomes increasingly rigid, and its resilience decreases. Increased efficiency comes at the cost of reduced flexibility. The system increasingly depends on existing core structures, thereby increasing its vulnerability to disturbances and volatility. The system is increasingly stable but only for a decreasing range of conditions.
Fragility Cause #4: Increased Complexity and Sophistication Creating Unnecessary, Detrimental Layers
Over the last decade, the movement to eliminate unnecessary middle management in businesses has grown significantly. The argument is pretty simple: there are usually too many levels of management, which slow progress, create unnecessary bureaucracy, and reduce profitability.
In response, many new startups are embracing a “flat hierarchy,” with as few levels as possible (sometimes going so far as to have no hierarchy at all).
Over the last few centuries, humans have built our global system to include many unnecessary layers.
For instance, when dealing with complex systems, the traditional approach is to reduce or constrain them. Typically, this involves compartmentalization, where the system is divided into separate parts that work independently to accomplish their own missions (in support of the broader organization's goal).
However, this approach creates unnecessary layers that increase the isolation of each division. When issues arise that bridge division, they can result in failure or a major setback. This thought is echoed by Donella Meadows:
When societies, systems, companies, and organizations gain in complexity—usually by adding more specialization and/or more sophistication through modern technologies and practices—they become increasingly vulnerable to collapse from Black Swan events due to their increased fragility.
Nassim Taleb said it best, “A complex system, contrary to what people believe, does not require complicated systems and regulations and intricate policies. The simpler, the better.”
Fragility Cause #5: We Prioritize Solving Systems Instead of Addressing the Underlying Causes of Problems
Until the true development of AGI, the joke will always be that code will only do exactly what you want it to do. Consider the Boston Dynamics robot dog. It will only ever jump if it and when it is programmed to do so. If you don’t program it to jump, it won’t.
Our systems are designed in a manner similar to this principle. Donella Meadows again provides insight, explaining how we set up our systems to pursue a purpose or goal. This goal influences and directs the system, which dynamically acts in general pursuit of this aim.
As you might imagine, when the goal is positively defined, a large amount of benefit can be derived. For instance, a major pursuit in the last century was the Space Race, in which two prominent nations competed to put a man on the moon as quickly as possible. This resulted in widespread national pride, accelerated technological development, and numerous positive externalities. However, the opposite is just as true. As Meadows writes:
This goal or purpose represents the underlying direction the system is pursuing. Unfortunately, when things go wrong, we rarely address the underlying conditions of the system, often preferring to deal only with surface-level symptoms. It’s a classic human trap: we tend to reach for the Band-Aid solution because it stops the bleeding immediately, even if the wound was caused by a systemic infection.
For example, when addressing environmental issues (including current climate change issues), we often focus on the visible mess rather than the underlying causes. We focus on the increased floods, wildfires, and other impacts rather than on the increased CO2 causing warming.
As we saw during the 2008 financial crisis, the government bailed out corporations rather than people. Only one person went to jail. By creating this pattern, this transfers fragility from the unfit to the collective. The solution, whether we like it or not, is to build a system in which no one’s fall can drag others down.
If we only ever focus on the symptoms, the underlying characteristics causing them will never be treated, leaving fragilities in the system. It’s difficult to mobilize people to address underlying issues, as it usually takes longer, they often aren’t responsible for the root cause, and it’s more expensive in the moment (even though it’s cheaper in the long-term).
Fragility Cause #6: We Overoptimize Subsegments of the System, Leading to Overall Suboptimization
The UK British Council summarizes the famous story well:
Humans have struggled for years to find the “just right” level of optimization in our systems. We’ve become incredibly skilled at overoptimizing the parts while suboptimizing the whole. It’s the “racing car problem”: if you’re a builder of race cars and you spend all of your money building the world’s most powerful engine (overoptimization) but forget to upgrade the brakes and tires (suboptimization), the car is actually less functional than a standard vehicle.
One of the main aspects of economics is prioritizing efficiency. As we discussed above, the pursuit of this goal has led to detrimental results: the elimination of redundancies (Tenet #8), which leads to drastic losses in resilience. This drive for the efficient optimal state has made the whole system more vulnerable to shocks and disturbances.
We do this through a methodology known as “command and control.” It involves controlling or commanding aspects of a system to result in an optimized solution or end state. The view is predicated on the idea that it’s possible to create a “sustainable optimal state” that the system can stay in for long periods of time. Walker and Salt provide more insights:
The last century of command-and-control management has created many hardships. For example, recently, humans have sought to command and control the Everglades, aiming to develop it into agricultural, urban, and conservation areas. Unfortunately, this has significantly reduced the area of natural habitat, resulted in a dramatic decline in water quality, and overall made the region vulnerable to shocks from extreme weather events.
As economist Charles Goodhart coined in what became Goodhart’s Law, “When a measure becomes a target, it ceases to be a good measure.” To rephrase, when a metric is used to reward performance or define success, people will manipulate it, making it lose its value as an indicator of true quality.
Formally, this is called rule beating, and it’s a phenomenon that becomes a problem only when it leads a system into large distortions or unnatural behavior that would not exist had the rules not been present to influence behavior.
As you can see, we often optimize for a single metric without realizing it’s making the broader system worse. As Meadows puts it, “When a subsystem’s goals dominate at the expense of the total system’s goals, the resulting behavior is called suboptimization.”
Fragility Cause #7: Actors Have an Absence of Skin in the Game
Nassim Taleb is a man who makes many strong statements. Here’s another of his, “[This is the] largest fragilizer of society, and the greatest generator of crises, absence of ‘skin in the game.’”
As we’ll discuss in much greater depth in Tenet #9, skin in the game refers to coupling those who perform actions with the consequences of those actions. In our modern systems, the person acting or deciding often isn’t the person who feels the effects (e.g., think of upper management creating a policy that only affects entry-level employees).
In his eyes, this is the largest factor in our world's fragility. “At no point in history have so many non-risk-takers, that is, those with no personal exposure, exerted so much control.”
Fragility Cause #8: Modern Systems Experience Concentrated Sources of Randomness
As discussed in Tenet #5, a major initiative humans have recently undertaken is to make the world more predictable. The result is that risk and randomness have become more concentrated, leading to trading frequent, small disturbances for rare, cataclysmic shocks.
We saw this in our example of the global financial crisis, where traditionally, a bank failure in one country or a virus in a remote village stayed local. Today, in our tightly coupled system, instead of these instances being isolated failures, they cause cascading collapse across neighboring systems, triggering many feedback loops.
We saw this in our example of forest fire prevention above. When we try to prevent small amounts of randomness, we store up energy for a massive explosion later. In this case, avoiding small mistakes (small sources of randomness) makes the larger ones more severe.
As Taleb states, “It is exactly like saying that nuclear bombs are safer because they explode less often. The world is subjected to fewer and fewer acts of violence, while wars have the potential to be more criminal.”
Credit Borderlandia
WHY NATIONS FAIL - SEEMINGLY ENDLESS FEEDBACK LOOPS CONTINUING CYCLES - EXTRACTION PROMOTES FRAGILITIES
Daron Acemoglu and James Robinson received the 2024 Nobel Prize in Economic Sciences for their contribution to comparative studies of prosperity between nations, highlighted in their culminating work, Why Nations Fail.
The authors begin by citing the innate differences between the two cities of Nogales (Nogales, Arizona, and Nogales, Sonora, pictured above). Despite sharing the same environment, ancestry, and name, the two sides of the city exist in completely different worlds. Why? The difference, as we’ll come to know, is the border and the associated institutions on either side.
The book, at a high level, describes how nations develop differently, with some succeeding in accumulating power, prosperity, and widespread diversity, and others failing. Ultimately, they describe how some nations, by various aspects described previously, curate aspects of fragility, making them more likely to fail when volatility and stressors arise.
Their key idea is the impact of inclusive and extractive institutions. Institutions shape actors' behavior, incentives, and the rules underlying how the economy works, thereby influencing the success or failure of nations.
Inclusive institutions, as depicted in the United Kingdom, South Korea, the United States, and Botswana, are described as “those that allow and encourage participation by the great mass of people in economic activities that make best use of their talents and skills and that enable individuals to make the choices they wish. To be inclusive, economic institutions must feature secure private property, an unbiased system of law, and a provision of public services that provides a level playing field in which people can exchange and contract; it must also permit the entry of new businesses and allow people to choose their careers. “
Through these characteristics and others, inclusive institutions foster heightened economic activity, sustainable and productive growth, and widespread prosperity. Inclusive economic institutions create inclusive markets that provide people with the opportunity to go where their productivity is highest, enabling firms to be replaced by more efficient ones.
Inclusive institutions are contrasted with extractive institutions, which are designed to extract incomes and wealth from one subset of society to benefit a different subset.
Specifically, extractive institutions are political and economic systems designed to extract income, wealth, and resources from the many to benefit a small, elite few. For example, in countries such as Peru, Mexico, and Guatemala, the Spanish conquistadors established the encomienda—a system designed to force indigenous people to work in mines or on land for the benefit of the Spanish crown and local elites.
There is a strong synergy between economic institutions and political institutions. To use Acemoglu’s definition, “Politics is the process by which a society chooses the rules that will govern it… When there is conflict over institutions, what happens depends on which people or group wins out in the game of politics—who can get more support, obtain additional resources, and form more effective alliances. In short, who wins depends on the distribution of political power in society. The political institutions of a society are a key determinant of the outcome of this game. They are the rules that govern incentives in politics. They determine how the government is chosen and which part of the government has the right to do what. Political institutions determine who has power in society and to what ends that power can be used.”
Extractive political institutions, as you may imagine, are focused on concentrating political power in the hands of a narrow, elite group. This group almost always structures economic institutions to extract resources from the rest of society, further propping up their regime. Extractive economic institutions depend on extractive political institutions.
Within this model, there is a strong feedback loop: political institutions enable elites who control political power to choose economic institutions that offer the greatest benefit to them. They also enable these elites to structure the future of the political and economic institutions. Extractive economic institutions enrich these elites, and their further economic wealth and power help perpetuate and consolidate their political dominance. Moreover, when the set of existing elites is overthrown by a set of newcomers, those newcomers have strong incentives to maintain these political institutions and create a similar set of economic institutions, thereby preserving the society’s status quo. As written in the novel:
In contrast, inclusive political institutions tend to break down extractive economic institutions, paving the way for inclusive economic institutions. Inclusive political institutions accomplish this by distributing power broadly throughout society, preventing others from easily usurping it and undermining the foundations of inclusivity. Acemoglu and Robinson summarize the ultimate premise well:
Interestingly, Acemoglu and Robinson arrived at a similar conclusion to Taleb: centralized, top-down systems are inherently unstable, while decentralized, pluralistic systems are built to endure. Extractive institutions demonstrate and promote fragilities in two main ways:
Firstly, because power is concentrated in extractive systems in the hands of a small elite group, the entire society depends on the stability of that group. If the leader dies or the circle experiences a significant disruption (Tenet #2), the whole system collapses into chaos (Tenet #3).
Secondly, extractive elites suppress the natural cycle of creative destruction because it threatens their entrenched status. This process artificially suppresses the basic volatility present in society, the natural “shocks” of a healthy economy. This connects to the ideas about the wildfires above—eventually, the dead wood accumulates so much that the next spark triggers a massive, uncontrollable blaze (e.g., a Black Swan event).
In contrast, and as a brief preview to the content in Tenet #9, inclusive economies thrive on creative destruction. This allows thousands of businesses to fail every year. These “deaths” are stressors that provide information to the system, enabling the economy to evolve and strengthen. Because power is spread across many different groups, no single shock can take down the entire country. This decentralization makes the nation robust to individual errors.
Credit Yankee
EROSION DEFEATS ALL OVER TIME - THE IRISH POTATO MONOPOLY CRUMBLES - THE BEST RELATIONSHIP ADVICE
If you’re not from New Hampshire, you probably aren’t familiar with the tale of the Old Man of the Mountain (pictured above). The Old Man of the Mountain is a series of granite cliffs on Cannon Mountain.
The mountain has been a symbol for the Abenaki and Mohawk peoples for millennia and has slowly become a landmark and cultural icon for the state of New Hampshire, even featured as the state's emblem.
A long-standing attribute of the Old Man was a long crack on the man’s “forehead.” In the 1950s, the legislature passed an appropriation to add cement, covering, and steel rods. This held for decades; however, in 2003, the formation collapsed.
For an estimated 12,000 years, this iconic face looked out over New Hampshire, surviving brutal winters, extreme winds, and much more. The structure was statically stable, but environmentally fragile. Over centuries, tiny amounts of water seeped into microscopic fissures, and during the winter, it froze and expanded slightly. This expansion shifted the center of gravity slightly, causing the entire structure to collapse in a single night.
The way the “fragile” breaks (as discussed in Tenet #3) is rarely a single, dramatic moment. Instead, it’s usually a slow dance between internal tension and external pressure. The fragile inevitably breaks with time.
Simonides of Ceos, a Greek lyric poet, had two excellent quotes on this subject: “Time has sharp teeth that destroy everything” and “There is no better test of a man’s work than time.”
One of the least fragile things in life is Mother Nature. The Earth's current state has evolved and refined over billions of years. That’s a lot of time for fragile things to break. Taleb describes it expertly:
As we’ll get into further in Tenet #9, the natural and organic is contrasted with the mechanical, noncomplex, and manmade. The natural can be both antifragile and fragile, whereas the manmade is typically fragile.
As we’ve seen, fragility comes in many domains. For instance, potatoes, which are originally native to South America, were brought into Ireland by the late 1500s. By the early 1800s, millions of poor Irish relied on potatoes as both their only source of income and a significant food source. For nearly a century, the “Lumper” potato was the mechanical engine of the Irish economy. It was incredibly efficient, producing massive yields from tiny plots of land.
Then, in the 1840s, infestations of Phytophthora infestans devastated the country. Because every potato was a near genetic clone, the system was incredibly fragile and couldn’t “self-heal” because there was no diversity to resist it. What looked like a robust agricultural machine was actually a fragile system that undercompensated when the shock hit.
Time is similar to volatility: the longer it is, the more events and opportunities for disorder. The Roman poet Ovid invoked the Latin phrase Tempus edax rerum, translating to “time, devourer of all things.”
In materials science, things don’t usually break because of one big hit; they break because of micro-stressors. Every time a “fragile” object experiences a change in temperature, a vibration, or a minor weight, tiny cracks form at the molecular level.
When we apply this concept to people and relationships, the “fragile” breaks through neglect or static tension. In relationships, fragility often breaks via “micro-cracks”, small resentments that aren’t addressed. Over time, these cracks snowball. Paradoxically, things often become fragile because they aren’t tested. Just as bones become brittle without the stress of gravity and movement, the human psyche can become fragile if it is overly shielded from minor hardships.
The fragile breaks because it cannot learn from time; it can only be weathered by it. To survive time, a thing must be able to incorporate the damage it receives and rebuild.
In every case, there are three possible states of exposure and response all things are subject to, detailed at a high level below and throughout Tenets #7, #8, and #9.
Luckily, whether you believe it or not, there are two rather unique solutions to life's fragilities: resilience and antifragility. We’ll start by diving deeper into ways to maintain the status quo through resilience and robustness, beginning with Tenet #8:
Robust and resilient systems absorb shocks through redundancy and durability, though they don’t necessarily improve from them.
That's a wrap on this deep dive.
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Drew Jackson
Founder & Writer
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