good evening ladies and gentlemen welcome to the marun saman faculty of engineering and architecture for those who don't know me I'm Alan Shad I'm the dean of engineering and architecture here at the American University of Beirut the remarkable the resilient the um unbelievable American University of Beirut I should say that the Manon saman faculty of engineering and architecture is all about Discovery through Hands-On learning um everything we do is tied to something physical or something simulated but something that the students do in the real world it's not only textbook Theory and today we have with us uh a person who Advocates that very approach um we have the remarkable Nasim Talib with us um but we also have another man with skin in the game who's actually going to do the formal introduction he's an oncologist he's a scientific researcher the 16th president of the American University of Beirut I give you furi please welcome [Applause] him good evening when I introduced Nasim Talib in June of 2016 prior to awarding him A's Doctorate of Humane letters I stated Nasim Talib has changed the way the world looks at uncertainty risk and unpredictable outlying occurrences black swans as he calls them he explains how to survive such potentially threatening Global events and even how to benefit from them his ideas are always challenging of prevailing Orthodoxy and bear close attention when I spoke of resilience a few moments ago Nasim would prefer the idea of antifragility resilience was the word I used for the previous honory the subject of his most recent book a concept in which an entity grows or even thrives from the disorder and unpredictability that we face in our lives and this is from 2016 I hope he agrees that Au in its 150th year is an outstanding example of an antifragile entity little did I know or any of us know just how much our antifragile Nature's Community would be tested at the nine years that followed I wonder if I brought something on us I think we're I'm going to say we we're resilient and antifragile and we've proven it now next listen after spending more than 20 years as a derivatives Trader he was immersed in the trade uh and the assessment of risk assessment and risk-taking Nasim changed course in 2010 and decided to share his insights on risk and probability with the world Nim is best known among the many things he's known for as author of the multivolume essay on uncertainty called inserto which includes five outstanding books the Black Swan Fooled by Randomness antifragile the bed of proses and skin in the game as Alan just referred to these books have been translated into 49 languages by most citation criteria the Black Swan is the most discussed and the most mentioned book of the 21st century something that seems continuously gloring in sending to his detractors he has some of those he's distinguished professor of risk engineering at nyu's tendon School of Engineering he has a PhD from the University of Paris he has an MBA from the warten school at the University of Pennsylvania but I want to talk about some of the personal aspects since we've known each other a while we have a strong friendship but what not many people know is our late fathers had a strong friendship and they were contemporaries as deans of the faculties of medicine at AU and as she and were chartered by then president Le Sis to write the Mandate and the first Charter for the medical school at at the Lebanese University which I think remains a vital mission of the University they were patriots in the best sense of the world nessim and I and many of you here have a great deal in common he is a unique individual and that he is an unalloyed advocate for the people of the Levant their Rich culture their Innovations their love of language their Heritage and more than anything their rights to self-determination and the failure of Serial colonizations of the peoples of this region so my generous and great-hearted friend has long stood for the values we hold here dear at this University that the people of Lebanon and that the region may as is inscribed on the main gates of both of our campuses both in Lebanon and in Cyprus have life and have it more abundantly ladies and gentlemen the Great [Applause] Nim than a [Applause] lot okay so uh I'm honored to be here particularly honored to be introduced by F usually when I give a lecture 50% of the audience finds it too Technical and 50% of the audience finds it insultingly simple so I'm going to have a simple strategy I'm going to be technical this is an engineering school and then I'm going to be very simple so it's going to be technical because I hear Echo and then non- technical at all okay so that works and then we the minute I see people little bored I I already see people bored but but more Bor than they are now and we switch to a Q&A and usually people aren't bored in a Q&A because they think they're going to have a chance to ask a question okay so so let's start antifragile so let's start with sort of a technical thing it's a big mistake to think that antifragility is a an idea that that explains bouncing back from disorder getting better because these phenomena were well known particularly by doctors so there are a bunch of uh what I call seemingly disconnected classes of phenomena 1 2 3 4 5 six and these are united by a simple extremely simple mathematical framework and that ranges from bouncing back from disorder going to the gym you get stronger when you go to the gym and U uh how do you have optimal dosage in oncology okay without knowing anything about about about the chemotherapy so the class one I called uppr regulation the effect related to benefiting from stressors okay in medicine they they know something called hormesis okay where you give a poison and someone gets better after a very small dose of poison very very very dose uh uh response related uh post-traumatic growth in Psychology in fact when you go when you spend time with the drones up here and uh talking to Ramy R my classmate or stuff like that you know and then with a stress of of who's going to Shell uh next some people develop trauma but many more people get stronger it's called a an upregulation response and that's not in literature it's rarely in literature because nobody's going to make any money selling you or trying to cure you uh posttraumatic growth okay so uh Hydra like outcomes in ology where you cut one head more grow back and beliefs about rebounding from adversity when life gives you a lemon you make lemonade so that's the first class the second one is what I call benefiting from variance fost stochasticity where you benefit from some kind of irregularity like I was told when I was a child that you should eat many many small meals a day it turns out that it gives you diabetes okay so it's the same amount you should have episodic fasting now intermittent fasting is part of the cure for diabetes and uh and but at some window like eating once a day or twice a day is okay eating once a year you know you're not going to make it okay so even leanon so there is something about the benefiting from irregularity like for example before Co when we wrote about our first paper on that before covid there was an observation made by doctors that if you give someone a ventilator you know the ventilator that kills people but they think it cures them if you give a ventilator if you 100% of the dose all the time you don't get the same outcomes as giving 80% or 120% of the needed dose so irregularity so this is this is what we call uh uh benefiting from this I call it fos stochasticity benefiting from various and dispos by the way it's exactly the same equation for all of them okay uh stochastic resonance in physics and Signal processing where you put some noise in the system and the signal Rises bit technical uh and then of course long volatility in finance for those of you in finance that was my profession is benefiting from crashes right so from disorder and markets class what I call scaling okay an elephant looks like a mouse I mean I we don't have elephants in Beirut but we have mice I'm sure but you can imagine but they're not the same they don't scale in the same way a a an elephant is not quite a large Mouse the the as as you grow for stability you need to have you know your contact with with with the ground is in squares but you grow in cubes so you have some scaling called isometric effects you're actually and and but nevertheless you're still going to be more fragile as an elephant than a mouse an elephant has a uh you know breaks very quickly this is why we don't have a lot of elephants and I'm sure in New York we have more mice than we have Lebanese in Lebanon okay so and that's you know uh not counting every month because they don't vote so you don't count them you don't have the incentive so these are the three classes of events on a positive side now the opposite qualitative attitude is going to be the same with negative sign effects related to Breaking under shocks now the interesting thing now this is uh not uh fragile but I have my my cell phone so it breaks under a shock it doesn't get better if you have a shock okay the um uh uh and typically it's it need requires nonlinearity so in other words 10 shocks of intensity one will have no Effect one shock of intensity to will break it okay so I mean don't try cell phones are expensive and and plus you have to pay that thing to the Lebanese State you know that tax so don't break your cell phone so classi harmed by the second order effect at some window harmed by by uh dispersion of outcomes so in other words uh uh eating for example continuously May harm you having a drug at a too low a dose for a long time harms you with own benefits um and there are a lot of uh things that are harmed by outcomes banking portfolios now class six effects link to hazards Associated to the with with a passage of time so in other words things that don't like time things that the first category like time and second they don't like time and like the state of Israel doesn't like time right for example I'm giveing an example so Decay from memoryless shocks there's things that don't get better and and time brings volatility time brings disorder they're all linked together so this is a technical thing all right so here I'm explaining how the the core of it is transferring properties from the do response to the probability domain and they're all linked this going to be technical for one more slide and this is a tweet by one of my co-authors about how to deal with dosing and cancer and Drug resistance okay now we're done with the with the technical uh you know more technical but I see that people are not very excited some people are excited by the technical actually this is this is how you can please everyone by giving them a little bit it's called the varell strategy nothing in the middle you do both extremes now let me start the non-technical all right and we're going to get to this idea of convexity or concavity raise your hand if you're bored but so we we'll start the the everything fragile has to have one property it must respond disproportionately to shocks so in other words must have some nonlinearity to shocks so for example if you smash your car against the wall at 1 kilometer per hour 100 times don't try I mean but you you try if you want it's a nice experiment but but but make sure uh you don't tell your spouse about the car okay you can try 100 times at 1 kilm per hour versus once at 100 kilm per hour okay so if you have everything fragile must have this uh nonlinearity that's established and once we once we understand the fragile and what it maps to and the similarity of other phenomena is the same equation the same nonlinearity must be present everywhere then we can understand antifragility so now if I jump one meter okay at 10 met once you die even bot they die some survive of course in the South some people do but okay 10 * 1 meter you actually you know some will break Al life not many but 10,000 times one Whatever 001 of a meter okay so all equivalent okay in total shock now why is it that everything alive must have this nonlinearity it's simple if I am linear to harm and I die at 10 m just just walking around the a campus would would would destroy me so you must have nonlinearity of the do response under any form of uh Pro I say unimodal probability distribution that's sort of that was that's not technical but you know it's got to be even less technical in a few minutes but so the idea is that if you have acceleration of harm as you go up okay you're going to be fragile and everything fragile has some acceleration and and to detect fragility you don't have to smash your car okay at 100 miles per hour all you have to do is try 1 mile per hour 2 miles per hour you can compare and you can see you can figure out you know if you have a such an effect if something is fragile there ways to detect it so this is the shape of the response you see this is the dose and the thing breaks and when it breaks you know it's you can make the curve as smooth as you want okay be abrupt it's all the same nonlinearity so that's what I call the second order effect so we are if you're fragile for example you must have the following R you must have the following second order effect and let's look at it uh simply uh I'm going to take use Fahrenheit because I'm not used to Celsius for for this kind of thing what's better spending um one day at uh 70 degrees Fahrenheit or spending one day at 0 degrees Fahrenheit and sorry half the day and the other half at 140 degrees Fahrenheit okay on average you're going to be 70 degrees fit so what's better the first or the second one if you're fragile to temperature okay you want to have stay at because that's the convexity curve that explained the link to convexity okay that explains the link to acceleration Lo between two points if you prefer so 70 degrees Fahrenheit is about what about 22 degrees cels the other one zero is about minus something sorry - 18 and 140° is 60 so - 18 plus 60 even in Saudi Arabia then we get 60 all right so the average if you care very simply anything if you care about the average all right if you worry about the average the dispersion around the average you're fragile and you're fragile to temperature we're fragile to a lot of things so based on that we can detect fragility from this convexity of the curve so if a function has some kind of acceleration so the convexity effect is I'm going to explain it in English and in French in English don't cross a river that is on average four feet deep that's in English in French a convex function of an average not the average of convex function all right so this is the the there was a a Russian interpretation so now we have an idea a general idea if you want you can read more about the technical stuff visibly there no equation no serious equation other than that French uh sentence down at the bottom and we can apply to many many things we can talk about isometry that if I hit someone with a large stone is going to be the person is going to be a lot more harm than if you break it into pebbles and felt the person there was uh you know a a big story in uh Persian tale about the king who had to punish his son by and the punishment was to C to crush him with a big Stone but his advisor helped him by saying okay let's break it into pebbles and it's the same same punishment in in the aggregate so I I discover that from Finance when you discover that if the market goes down 10% people lose1 million dollar but if it goes down 1% they lose half a million dollars so there's an acceleration and these people who have an acceleration typically go bust that's one way to figure out something something's going to go bust this explains also the difference Stone between the fragility an elephant and a mouse okay do you have mice on campus sorry you have cats no cats don't mess with cats okay and it's the same thing with the so optionality this is why I discovered it is visibly a convex function where if you own an option say Finance I'd rather have a lot of say the average is going to be 100 i' rather have either 50 or 150 rather than than just 100 because you like you have 50% chance of making a lot of money so this is technical forget about it now before I finish the thing the the soda Brothers if you like one of them you like them all okay so it took about 10 years to figure out the theorem and if you like if you hate one of them you hate them all so in other words if you like uncertainty you also like variability you also like chaos Vol disorder stressor error you also like time like Au likes time you know yeah how old is they be 150 years 158 so we have another 158 years to go see it seems to like time and uh and things typically um humans are fragile institutions are not because you know the buildings the physical institution is not the same as the institution um humans if you live 150 years you don't have another 150 to go no so as as you age life expectancy decreases for think that are antifragile life expectancy increases but I'll get to antifragile in a minute so the central equation is convex concave it's not lesson in mathematics because this is where you can figure it out okay that this is you benefit from from disorder this your H by Disorder so we put as a general class where people would ask me would would this would say what is the opposite of fragile okay everybody would say robust robust is something that doesn't is not impacted by the disorder clusters the disorder Brothers but if you have but that's not the opposite but we know from mathematics that in the old days concave used to be called anti-c convex and to be to be to when fragile you have to be concave over that range of variation antifragile convex the reason we go to the gym we benefit lifting once 100 pounds instead of thousand times a t of a pound is because you're convex up to that point okay this is why actually have gyms so as I was working on antifragile I don't know if you does someone have an Apple watch it has something called heart rate variability how many people have that on watch when I wrote antifragile uh that was there some the the the belief was that you live long if if your if your heart rate is steady then you're going to live long and it turned out to be the exact opposite the best predictor of death is a steady heart rate okay it means you're not adapting there are micro changes in the environment you're not changing you're not adapting okay someone when seated someone healthy would have heart rate of 45 and and and then and when jumping 200 right so you don't have these variation so it's exactly the opposite of popular belief that uh so I wrote about it in antifragile but mostly the intuition to me came from corporations the best predictor of immortality of a corporation what is it Ste profits steady cash flow actually you take cash flow a steady cash flow is the best predictor of bankruptcy of Corporation because think about it the environment is not steady it means there's something artificial about that stabilizing the cash flows it means someone has a friend a big you know government you know giving her or him orders and if that friend decides to leave whatever position they have to become a yoga instructor okay you lost that business all right so so this is where why you you you uh and it was effectively in finance is very good predictor of Crisis stabil stability of income usually it means you have a lot of hidden risk that explode very frequently so now I've I've explained a bunch of things but I want to go back to the I mean the Levant visibly is that uh there there's something about the scale of a city state model the regional model instead of having States what happen they like territory as you know from a neighbor have neighborhood State and the like territory but traditionally we were in cities and cities the further away you were from the city the less they care about you the city state so so it's a complete pretty much like V the further away from the heart the less your heart cares about you you see you get cold when you have your extremities when it's cold so so there is something about the the model of the city state that allows for overco compensation to work this is you know it's more technical but and now you notice that what is the best way the best possible way uh to to become rich for for for a for let's say a polity a poity for me is a c with the surroundings like Beirut think that they own up to aard but we in Kura think differently all right but nevertheless so say the the areas actually under the Turks was sh Etc so anyway so these areas what is the best predictor take a map today and try to figure out where are the what are the the the the the the states of quties that are the best performing what are they Singapore Hong Kong Dubai and if you take Singapore they Fair a lot better than the Chinese who have the same ethnicity same work ethics the same applies to Dubai they're do a lot better than Saudi Arabia there the same people okay and they have same access to the water now what is it okay so the the and then of course in the anci world what was who was very successful locals here okay maybe I'm going to be I'm stretching by St local in Beirut Beirut was a small town was not as interesting before Au it was not very interesting it was mostly uh and sidon and of course uh Su so what happened also you notice the city states they have no resources Singapore has no resources not even water have to import water okay so what is it that they have that's working for them that they have no resources like Amsterdam no resources so what did our ancestors here do sorry that they had they had to go at some point it became extremely um popular uh to have copper okay so just like auv had to go to Cyprus you know to get I don't know if there's still copper there to get but they said okay it's fancy to get copper let's go get copper because everybody has copper so they figure out a way to have boats to go to Cyprus but when you egular you learn to build boats then you ask a cypriot you know hey would you like some I don't know something with it right something so you become Traders now you have boats you have a net work you know how to sail you know how to work so suddenly because you had nothing like Venice like uh the the all these all these town because you have nothing okay you become very rich and and you make a lot of money from trade you don't invade your neighbors they didn't even have a Confederation it's could care less okay they care about Commerce and they're very peaceful and then even have an army by saying hey you want to invade us you know if you invade us if you kill us you get nothing if you don't do anything you get 10% and then the Persians said well okay yeah but the neuk noar had 15% okay then you work out something there's no need to have they're not going to kill you you're making money nobody kills anyone making money right so this is the idea I wanted to close on on this this is visibly is very hard for me to explain antifragility because most people working on it like this fellow in who does oncology and other a group of seven people writing a textbook and they're not involving me because they understand a lot better than me so okay so they they uh so I'm not going to get too technical I let other people get more technical I'm not going to get too comprehensive I'm just giving you a summary that there exist things once I explain here that unifying theory of around convexity of things that nonlinearity of things that like or dislike disorder or are indifferent to disorder robust I explained that disorder can be good for you if you set up the right way as a matter of fact absence of disorder can harm you if you don't go to the gym it could be harmed and that when you look at uncertainty you have to focus on how you're built whether you're built in a certain way because it's once you you know work out the details you know how much disorder you can handle and and then you welcome uncertainty you know under the condition that you boun back higher and this town has had how many bounce backs right and we do better no every time depend depends on I hope yeah this time I think we're going to do better all right so what doesn't kill me makes me stronger so this is a humble introduction to this idea general idea of antifragility and uh and I'm sure people who understand this here better than me can ask the right questions thanks question and we have a [Applause] board thank you Dr to for this insightful discussion on anti fragility especially that it resonates very well in the complex realities of um of Lebanon and the region so I would like now to ask the audience to join the conversation and we would like to take questions we have microphone circulating in the room so please raise your hand and we will bring the microphone to you thank you for the presentation um I was wondering if the nonlinear linearity works both ways for example for antifragility uh so we are bouncing back and we're growing from the disorder but does this decrease with time so the more shocks we receive maybe the less growth and some point we will get to a Breaking Point there's something called the S curve okay when you go from a floor you're convex and when you hit the ceiling everything that hits a ceiling is concave see so when you're starting you're if you're low on a scale the sort of benefits you when you're up top no okay so this is sort of an explanation of why when when economy iies are mature they have less room to go up and disorder gives them less uh less of a bounce which is something that people don't understand in the west because the West is pretty much finished they don't have gross anymore here okay they got people to dve to take out of the countryside they have apartment buildings to build even China people complain I mean lot of bad propaganda about China but China still going up that curve so um so this is the the and we're here we're still here so and then we did bounce back from adversity because when we had the Riad Ponzi stabilizing the currency a stable currency destroys the country unless you have oil to match unless you please oil actually as we saw will destroy a country countries that have oil don't do very well country that have no resources always do very well just like I mean this in medicine everybody in medicine knows about this curve I it's everything in nature has a floor and a ceiling and visibly you're convex before and concave above but people didn't realize this applies to gross as well so France is here is done finished America is here uh China is here and we're here so and then okay we benefited from uh the last part of the s in Lebanon because we had adaptation after we bounced back from the aftermath of Riad Ponzi who destroyed the Lebanese economy by having an expensive and stable currency and destroyed all manufacturing so people would sell whatever they had and invest and put their money in the banks making 8% why bother so and now we're we're coming back and this year has been excellent for in spite of the war if you look at the reserves of central bank so yeah so there's the opposite of fragility and and this you apply you apply this to a lot of Dimension could be the economic saturation or other things thanks Nasim very insightful as usual uh I would like to I would like to add something uh to me antifragility is to accept to lose a bit in order to gain a lot for example in oncology patients accept to lose their hair for example in order to gain their life so uh here my question is any limit to antifragility yes of course so let let me let me come back to that very same curve okay so the um if you have more upside than downside for the same like a dollar down in a market you lose a million a dollar up you make two million okay that's that curve you have the opposite up here so there's a point where the way I Define antifragility and fragility is over range the difference between anti fragility and fragility is fragility once you break you break actually fragility is the other curve it's not it's a it is H The Coffee Cup breaking but it's a negative sign FR of this anyway so of course there is a point where uh the gains are going to be small and the risk is going to be big it's like putting your money in a bank on Riad Ponzi all right so you had very stable very small upside and a lot of downside people felt it whereas if you put your money in uh penny stocks you have a lot of upside and a little downside to what extent can you build up an anti fertility yeah is there a limit to how far you could go with yeah I I I defined it I said okay when you go to the gym okay if I put 100 kilos on your shoulders and you stand up it's going to strengthen your bones there's a range if I put a th000 kilos on your shoulders you're going to be a good client of the AUC the medical center all right so so there is a range over which okay another representation than this one it's a generalized S curve it's like a weekend in Philadelphia is good two weekends in Philadelphia not so good okay so the curve goes like this okay and then beyond that start coming back down where you end up worse off see so the the I'm simpli fing but you got to look at locally the the properties locally okay when you go to the gym lifting 100 kilos is better than 50 kilo twice you see but 1,000 kilos not so much so there is a limit to anything same applies when hormesis for example is comes from the fact that small doses things can be uh beneficial but at higher doses they harm you yes go ahead yeah good evening um regarding the uh the last uh um example about the the west and the East um I believe that uh the West has played it very well to add its uh antifragility through colonialism which I believe is still uh adding to its West okay let me tell you the problem of the West uh I I didn't go into Finance but what fragil as a system is debt debt debt if you're a company or a person and you have debt you can't face R random outcomes in the same way as someone who doesn't have that and what is the opposite of that redundancy okay having extra stuff like for example uh I don't know if it applies to people at AU but most people in Kura have two kidneys okay come with two why do you have two kidneys all right because because of uner you know in case you lose one and effectively you could fuction on one very well so you have a spare part okay so that is the inverse of a spare part and and things get fragile so let me explain one thing about West when the West Was Here you had no debt when did you start having debt big deficit in US last 20 years okay so when you're here you can't have that China is here they can handle that you see but but the West cannot handle that France is choking under that and they have no way out so people think that it's because they need a new president or something it's can't the structure of the system and it OTS accumulated thatb when they got rich and it's it's so silly that people only get into debt when they get rich it's when they need it the least I have a question from our live audience that I'm going to relay so can the engineered system like cybernetics benefit from anti fragility same as natural systems the system is adaptive system benefits from errors but you don't want the errors to be too big you see in evolution evolution is like let let's say you have parthenogenic Evolution okay so how does a system evolve it makes mistakes of reproduction it's like effects you remember the facts those of you who were born when you had effect machines effects is a little blurred so The Offspring is a little different from what was intended so you have a lot of Offspring those who are different in a good way survive and those who are not doing well don't survive okay so mistakes uh so that improves the species where it makes it more adapted to the environment so thanks to random errors so it's a system that benefits from errors it's another category in the thing but I didn't put it so A system that benefits from errors problem is if you have too many errors too many no error it doesn't evolve too many errors it doesn't conserve its fast gains you see okay so now let's go to the system so cybernetics computer benefits from errors but sometimes it's not enough so there's this uh Thing by Netflix discovered that the best way for them to improve their system is to try to hack it internally so to make it because particularly that you could reverse you know what you've done so at something called the Cyber monkey or what is it called the something Markey that would create mistakes in their code all the time and uh and then the the the the code would adapt to it so you you can up to a point everything benefits from errors you see you you uh but up to a point visibly so if you have two larger mistake the thing breaks apart so this is why this is a local property you have to know where you are convex and where you're not not please go ahead uh Dr Talib I kind of have a geopolitical question yes in light of the recent events in Syria how would you expl explain the sudden collapse of a system that survived over 54 years just to fall within a couple of days okay so this is this is the thing about uh do you remember when I said that the let me tell you what I wrote about Syria okay I went I was invited when I was writing the Black Swan you know that I'm I'm usually don't like bureaucrats I it's a thing I just don't like bureaucrats so I got allergic to bureaucrats when I was writing the Black Swan I was invited to a something called the Wilson Center for two lectures very nice so there's only one lecture they didn't invite me to do the second one all right they they they said oh we have problem scheduling and and 18 years later haven't heard from them but during the lecture they had all these bureaucrats in DC and I quizzed them I told them I'm going to introduce you due to two regimes one has been around uh so one had the 40 governments someone's talking on the phone Au is au my okay so one has had uh at a time since the war I said 40 governments since the war the other one had the same government since 1973 which one is more stable all of them thought that the second one was more stable which one is the first one what was the first one no the first one was Italy and last time I checked as of this morning it was still standing all right what was the second one Syria and so you have an idea of why what the system is a system just like a Riyad Ponzi thing you stabilize a currency so you don't have adaptation at all to the risks involved you're hiding the risk and it cost more and more to stabilize the currency and then the SNS fall apart falls apart in one block like in 2019 see whereas um a system that's adapted doesn't have any surprise the the the as I say the I'm not going to use that rude word the you can you can see the I don't want to pronounce say it because sorry none of there's a word in Arabic I don't want to use okay whatever okay so so this is so you can see that stuff okay so it's visible and typically in my new book I talk about an interesting property is that the more people the more the if you want the the we never have never lived in an environment ever in the history of the world where we had more gender equality and more racial uh less racial discrimination never yet we have never had more complaints about gender equality and racial discrimination so you you you you have this impression that hey we're living in a dystopia okay where has never been better before it's the same effect with uh with when you when you have a lot of fluctuations uh people complain a lot and and an environment where people complain all the time is a very good environment I mean don't go overboard because of lanese complain all the time hi uh I just have a I have a question so you do say that organic things need stressors to evolve so how do you define Israel and as well how do I Define what Israel okay so let me talk about something artificial you remember that entity that I discussed yeah okay so uh the there's another representation but linked to this that explained that um let's define it it is an official entity they speak they don't even speak Semitic languages with properly andas and and and and this is all right so they're not integrated in the area okay and uh and it doesn't work I mean we have a lot of local communities okay of different religions that were completely part of the scenery and they're not okay but let's say let's go to the next step the only reason there exist is is because of military they have stability because of military things they don't exist because for any other reason and every time if you notice it's quite explosive every time you have to kill more people to just be in the same place okay they have to kill more every time they kill more people so next War they're going to have to kill more people so to be in the same place so I don't think it is a state that's that can survive for several reasons one is you can't fight history you can't find the rise of universalism like we have gender equality you have Racial equality you can do aparti and they put themselves in a box basically I am certain that uh you remember Geor habash the great George habash he reincarnated in small TR and Netanyahu because the best thing for a Palestinian is avoiding the two-state solution because think about it if you have let think about 2030 2050 and you have 7 million Israelis or or Jew Jews and 7 million uh Muslims or few Christians what kind of state is it going to be you can't do an ethnos state if if if you have a majority that's not from your ethnicity I mean so so you can't so so they're fighting time they're very fragile the way they are the nation state itself is a fragile concept construct that has been challenged in Europe in Europe they still have not only a nation state but there it's not there's no there's no real I mean it's m who talks big but but if you look at the structure economic structur it's all integrated so I think that they're going to eventually have to abandon Apper tide the the they will Annex the West Bank and Gaza and do whatever they want they cannot their dream was to kick kick the people out and they're unable to kick the people out their dream was was to kill them they can't kill I they killed 42,000 but I'm sure it had more than 42,000 babies around okay so they cannot get rid of the Palestinians hence it's going to eventually be Palestinian state so this is why I'm not I'm I'm you just have to wait plus the other thing you remember that curve where are the enemies of Israel up here where are the friends of the Palestinians down here I mean think about it turkey 15 years ago let me give you some numbers okay 15 years ago the United States had 20% of the world economy and Europe 19 sorry Europe had 19 one of them United States had 19% Europe 20% 15 years ago what is how much of the world economy us have now 15% and Europe 14% France used to be 3% three 3.3% France and UK of the world economy now they're under 2% turkey was 1% now 2.2% so you realize that how this is playing out okay and China was 6% of world economy they say 20% but I'm using uh prices you know adjusting prices PPP it's called it's a lot more because you look at the consumption of power the use of Miles by citizens stuff like that China is probably 23% of world economy and they moved from 1% of the scientific Publications to 25% of the nature index is China so you realize that the friends that without AR official support Israel can't exist so they need to make friends with us okay and you can't make friends with people you keep killing right and so that now it's they put themselves in a box because the strategy is to have just a Jewish State and it's not working it's not going to work long long run it would have worked if they played it differently we we did have a question we just wanted to know where would you place tele or Israel on the map on your little graph where would you put them what do I put on on this map on your graph this is economic growth on economic growth Dimension you see okay not you can't generalize economically they they are somewhere in here a question from kudo yeah no no too many kuras over represented okay go ahead uh so it's interesting that the first cities were all located in uh in in history in in deserts or semi desertic areas because of the harsh conditions I think so you think that the harsh conditions in Lebanon will force us to develop and adapt or always okay so we have never really had resources here okay and uh and uh the cities were not okay so let me tell you something interesting about Lebanon there's a guy who wrote about the Bron AG collapse and then he revised the book after reading antifragile he figured out that you had large states before the Bronze Age collapse okay 1182 the late Bronze Age collapse and then suddenly all these big Empires you know were washed away right the Hittites the arcade indans all these guys disappeared and then we had the rise of city states along the Mediterranean and and what you call the Phoenicians effectively Coastal canites uh Rose dramatically so and he talks about anti fragility that the bronze stage collapse helped these small city states rise and dominate uh you know Commerce in the Mediterranean and they weren't interested in war unlike the other Empires it gives you an idea about the future the other thing that you got to realize why the West is weak when I say the West is weak one because it's saturated but they have beautiful they're like Museum States you go to Europe they have beautiful cycling paths I'm a cyclist beautiful museums great mozzarella whatever you want but there no growth okay why is it why did the Roman Empire move to Byzantium from Rome someone can someone tell me me sorry what was the richest city in the history of the world the say the richest the longest period of time Aleppo and that gives you a hint that the weals was along the Silk Road Persia India China so that gives you an idea and then India and China still had the of the world economy till 1760 the first event is the first Industrial Revolution and then sure enough 1830 when the Chinese decided to have no Fleet because they weren't interested in the rest of the world they got you know had the English came and started two Wars one is the Opium Wars and then the Boxer Rebellion and China fell apart but the norm is for the East to dominate so if you want to look at the conflict that depends on on APAC dominating the the outcomes in the West Bank depend on a Lobby group in US dominating Congress okay that's not a long-term solution okay that's very fragile yes sorry question thank you very much for your presentation it's the first time I hear about the concept and I look forward to reading the book because I haven't but my question is um when you're presenting the concept of an antifragility we're analyzing systems and to me um we're looking at antifragility postmortem so we're we're realizing antifragility in a system afterwards I no by very definition you can tell ahead of time if something but that's the whole idea if you don't have to uh uh kill the patient to figure out where the patient would die just from the shape of the function the dose response function okay so my question how would the concept of antifragility apply or could it apply to me understanding the concept and applying it personally but then as a society how would we apply know I'm not I'm not you know trying to teach people to apply anti I'm describing the properties of systems and you pick your own but there's some rules okay okay try to go to the gym if you have a gym because physically people need a little bit of stressors okay particularly as you age the more you age actually uh the more stressors you need and and the more recovery you need okay so try to go to the gym try to have a second kidney try not to uh invest uh whatever there's Riad Ponzi you know proposing anything do the opposite and stuff like that so thank you by the way I didn't have to wait for the collapse of the banking system to call him Riad Ponzi and he was very upset because I gave a talk at USG at University St Joseph here in Beirut and he was very upset about it so um sorry that was in uh November October 2019 and it was called from Ponzi to fragility and and it was Riyad about Riad Ponzi we would like to take a few question more ecomic yes we would like to take a few questions from the audience so are you optimistic about Lebanon do you see the situation as fragile or are um or are there consec consecutive shocks the country experienced too strong on the es curve to experience post-traumatic growth from I have okay in general I have no idea but but I have the feeling from experience that Lebanese only work do well on stress okay they don't they they Prosperity doesn't Prosperity is not a a thing that fits the Lees very well so uh another I don't know I don't side on question you're the boss I have a excuse me I have a short question when do you think us treasuries would become risky Investments excellent question so so let me let's talk Finance because that was my specialty for a long time and this is where I generalized from um there's a big idiot called Joseph Biden and he who doesn't quite understand of course much of anything but black politicians this is why we have I have my book skin in the game where we talk about how to clean up the system from uh these kind of decision makers who don't pay for their mistakes in 2022 he exprop created Russians okay and uh and forc Europeans to do so so the Western banking system uh made sure that there's no incentive to hold uh us or european or dollar denominated assets that have claims because they can take them away from you without due course I mean I'm not against expropriating someone or whatever freezing someone's assets but you're not going to get new customer it's the kind of thing in life you do once see I mean expropriations you do it once and you can't do it anymore because now every penny even Saudi Arabia they don't leave their money in the system they transform it into gold so the dollar is still a dominant currency for trade but it's just for the transaction and then once you get the dollars look at the rise of gold people store it into other things the Chinese the Arabs and of course the Russians and others so and if you notice they destroyed Cyprus because the Russians don't go to Cyprus anymore they want to go to duai not because they they committed crimes but because they don't want to be accused of something and and they feel paranoid you see so so it was a big mistake made by the West under Biden they wanted to punish the Russian they ended up punishing the US currency and the Euro so we we have a problem because the US so let's talk about the curve here okay you know what's going on in the US we were paying $800 billion in debt servicing and next year we're going to pay more we we're going to pay interest on these $800 billion we're going to have to borrow them okay and borrow more that's more than a military budget so you can't you can't grow out of this there's no way to grow out of this so you have to keep issing more and more treasury there's something called a death spiral and rhymes with death spiral and where you have to borrow keep borrowing more and more and more till you end up like viar Germany so we are in a bad situation because and largely because the there's no incentive to store in dollar the gross doesn't come from the dollar zone and uh and then and Trump doesn't get it Trump actually got it immediately when he said oh we should stop freezing a asss he even proposed giving money back to the Iranians because it's good business you see but I think that his administration is not uh smart enough to understand the point so thank you for the presentation and discussion I have a technical question so the concavity and the convexity of the curve uh depends on the operating point right what if the uh curve is time varying or dynamic exactly so most curves almost anything of the function is like this okay you're got to be be concave here convex here yes but what yes what I mean is that at the same point the curve itself fluctuates with time something about the range of variation you set a range of variation and see and say I'm convex around this area you see it's it's defined if you look at the technical stuff is defined for a given uh range of variation sorry um you asked a question before no oh okay uh this is from the south just to get it oh yeah what represented we need to have good representation uh I just so I built sensors for biomarkers and the UN certainty in in biom micros for cancer is a is a big challenge a lot of factors that can affect them a lot of them can change in terms of helping us discover or diagnose to prognose cancer what can antifragility do for us in that domain I I don't understand that uh domain at all other than understand dosage and those responsive frequency for a given uh medication that you're giving or something that just the the the dosing is my department not uh whatever you're using or whatever disease is conditional on you're doing your uh your uh treatment okay how do you do you see so so to give an example examples from biological world is that if you uh uh they they tried to have plants that that are produce their own pesticides and it didn't work because you had to produce a lot of pesticides because it had to a little bit all the time because it was constant and then they really realized that it's better to put pesticides independently because you can put a big dose and then come back next month or two months later because it was the total was was you had to put less pesticide overall okay so locally you had to figure out if you're going to kill the patient or not that that's the whole idea that at what dos and also if you're going to kill the tumor or not because also you have the the uh resistance but I'm not I'm not an expert on biomarkers biomarker all that that's not my my my focus um we have spent more than an hour and we haven't mentioned AI would would AI save the US you think I mean it would save China I have no idea about about uh I have no idea maybe maybe you need something but but not necessarily more effective for the US than it would be for China speaking of uh AI if you were to apply uh your concept of anti fragility to the development of AI do you think such an antifragile AI system could ever surpass human intuition uh in dealing with extreme Randomness no the problem was AI I'm going to tell you the problem is AI Attis so AI is a statistical machine so statistical machine don't extrapolate they can't so they they almost by design made to not extrapolate and and a friend of mine explained it very well he said what does it do it reflects the consensus okay what made sense and and typically things in the tail don't make sense see so uh the other that so the there's a few things about AI that a few anecdotes have personally that you play with AI to see if it gives you the answer I have a the we have a theory in option trading if you have a reason to buy an option don't buy it or if you have if an investment makes sense don't do it because other if it makes sense other it made sense to other people and they went bankrupt so things that work they have to be out of the box and AI by Design if you see how how the the the GPT is built you know it's built around neural Nets with some temperature so they for accuracy is basically representing things so uh uh the way what made sense so for example one day I tried to quis it and there is a um a uh uh there a famous meeting in Berlin 1910 there was a war between the Ottoman Empire on one side and European countries and Greece was on the other side the opposite side so there's a fellow called um Constantine car theodoris okay who represented a big Power there so I asked open AI who did he represent at the uh Congress of Berlin okay was there was a war between Greece and and and turkey and other countries which country do you think he represented the otoman Empire okay but it told me he was a representative of Greece why because it went by what made sense he has a Greek name and so this is but you can't Advance by by looking for thing that makes sense it's Inola not extrapolative so typically the problem with statistical distribution that are thin tailed is you interpolate and it works very well from weights for stuff like that but but the other one you have to extrapolate outside the things you've seen based on properties of things you've seen and they can't do it or at least not now but I doubt it could do it so it's like people who open a restaurant that makes sense they don't make money it has to be weird okay and uh and and and and people after the fact will think that it's obvious and then the other thing about AI they think that it's going to save the US no why not save uh Pakistan I mean AI is so uh Universal yes go ahead re recent and very fashionable uh Theory regarding Economic Policy uh or the application of Economic Policy Vis A V uh public policy would be nudge Theory so uh micro steps that governments can take in order to uh maintain a steady state or improve the situation in their country so micro steps if you will very little uh uh not very uh aggressive policy in order to improve the lot in their countries can you compare contrast that to our anti-fragility uh system I have I have no idea I have no idea I I have for me anything related to macroeconomics is uh doesn't exist so it just simplified my life and because of there's no feedback mechanism through to know you don't have large sample and Medicine why does medicine work in non-economics because people die and you figure out oh the fewer people dying under this drug okay whereas in economics you don't have a large sample so and and you have like three observations and becomes anecdotes dressed in bad mathematics so I have no idea thank you first off for the lecture my question is uh I would like your professional perspective on uh a move Richard Nixon did when he removed the dollar of the gold standard how do you think this affected the US dollar you cannot separate the fact first of all you can't separate what happened uh in 1971 the Bron Woods thing uh the the the the removal of all these convertibility things with the fact that by then the United States was a world economy so you can't really and then today the United States is maybe at best a third of this its role worldwide see so you can't really uh compare but we don't know whether it was good idea or bad idea we we don't know there thing that don't make sense at a time like Biden expropriating the Russians okay because you lose all kind of customers outside Cincinnati but uh and even then okay but I I don't have no idea about that policy right so from the online audience we have two questions do you want to pick the one about Bitcoin or the one about West and becoming anti fragile about the West becoming anti fragile or Bitcoin Bitcoin okay Bitcoin yeah go ahead you wrote an article on bitcoin flows do you still stand by it and would it be a wise investment for Lebanon people people have this idea the Lebanese are very smart individually but they get into tulip waves okay so it's like the the Ponzi worked in Lebanon it wouldn't have worked in New York I mean someone like Riad Ponzi wouldn't have survived in in in the west he survived in Lebanon he did very well so they want to get rich because and that was the idea then they're blinded by classes of risk now Bitcoin has tried to become a currency and if you show me some one who has paying her or his rent in Bitcoin or getting a salary in Bitcoin okay i' i' uh you know i' change my mind it's not has not operated as a currency because if my income is in dollars or whatever I can't have my expenditure in Bitcoin so it's a speculative thing speculative stuff it can go to a million it will still be a speculative thing you see and with with a bunch of liquid speculative and people cornering it so I don't think that you can use Bitcoin as a I mean analogy of a success story because the price went up the Tulip it's a tulip bulb uh thing it makes no sense so ex an now people tell me Well gold doesn't make sense say gold has two properties that Bitcoin doesn't have one I can wear it okay it has the Aesthetics and it also has industrial qualities the second one from a risk standpoint if I put this gold train in the ground I'm going to hide it in AU all right in the ground will last for a long time and but 100,000 years will still be gold there's no and they won't discover any metal that can match it in properties okay whereas Bitcoin is the far the the the U the people involved in maintaining Bitcoin if one day they decide to join the Israeli army or go to the beach okay what would happen 15 minutes and the thing's kaput so you're going to tell me that at Infinity that thing can match Gold and properties plus the other thing is what's Bitcoin it's a protocol so my friend um my friends here in the department at the School of Engineering if they get bored one day and and there's nothing to do they could probably start another one identical to bitcoin so the the fact that it has market share is very transitory plus if you've noticed I noticed when I was after my paper I was attacked a lot by a bunch of bitcoiners no you know was it was it was like a wave of kids you were into Bitcoin now they're all into AI okay so I I I don't I mean it's rising but it's not a currency it's used you probably it's not even useful in Syria think about it you don't have the internet how are you going to use Bitcoin and every time we've had a crisis and ecomic crisis it did exactly the opposite what was expected from it so it's a speculative thing speculative stuff by definition never fight something speculative looks like we're done no thank you so much Dr tal I'm extremely honored thank you for inviting me thanks thank you all the evening is over we look forward to having you back with uh Dr Talib in in the future he is a member of the Department of industrial engineering and Engineering Management at AU and so I'm sure we'll be hearing from him again I'm so glad to have seen you all this evening have a good night [Applause] Back To Top