ANTIFRAGILE. Author Nassim Nicholas Taleb ("The Black Swan") makes the point that bigger is NOT better, although the mass media have fooled us into believing that it is, and partly because they are big and want to retain their monopoly at your expense. So top corporate leaders are given blank checks to take risks with your money and health, while they themselves have no downside or "skin in the game." (And therefore few ethics.) Our culture admires and rewards BIG at the expense of small, but it is small business which is healthier and poses no threat to your pocketbook in higher taxes due to bailouts and bonuses. Small is also forced to be ethical because risks are theirs, not yours. Taleb employs illustrations to get these points across. Consider the effects of being bigger. If it's your own waist, you have a bigger chance of heart attack. But if you're a major banking CEO, you get to say "too big to fail" and to exercise options and golden parachutes that your clients and employees do not have when you do fail (which is also inevitable in a complex and volatile world, where risk is unpredictable and unethical collapse inevitable due to wild market swings and the tipping points of political and religious wars.) Indeed, "risk management" is an oxymoron like "military intelligence." Meaning the Republican ideal of few regulations on Big Business (allowing Wall Street quants to bet against their clients), and the Democratic ideal of safeguards via Big Government (allowing entitlement fraud to mushroom) both miss the point. Big ITSELF is bad. Why? Because risk is non-linear. Imagine if I throw a pebble at your head. Annoying, true, but not much of a threat. Now imagine the pebble is twice as large. Is it 100% more annoying, or more than 100%? If you crash into a wall with your car at 50 MPH versus 5 MPH, is it 10 times more damaging or 10,000 times more damaging? If the rock is half a pound or the car is moving at 5 MPH, you survive, but if the rock is 5 pounds moving at 50 MPH, you don't. Whatever the case, there is more than 100% additional damage at each doubling. The same is true with markets, military campaigns, and practically everything else that doesn't take into account the X Factor, or the "tipping point" at which traffic slows to a stop with the addition of just a few extra cars in the system. Taleb compares the risks of being big to a crowded theater where someone yells "Fire!" For every extra person you add, the potential for injury goes up by more than the percentage that person represents, whether there is a fire or not. And that potential is larger for each person you add, because the size of the exit doors do not change. They are established by the market. So if there's a fire, more die in bigger theaters. If there's no fire, more are trampled, trying to get out. Now imagine there are two smaller theaters instead of one big theater, with the same total number of people, now divided into the two. Casualties are less than 50%. In fact, injuries may be zero. Still think bigger is better? If so, which theater would you rather be in when a sudden, unexpected gas explosion sweeps out over you from the back of the building? Taleb shows that when things get squeezed, costs rise exponentially, not linearly. And this is the fundamental error made by forecasters, political pundits, politicians, economists, military strategists, and everyone else who thinks tomorrow will (or should) repeat today. Taleb says that we are wasting time and money because we confuse catalysts with causes, and don't realize that individual actions cannot be predicted at all. "It is like blaming a bridge collapse on the last truck that passed over it," he says. For all our talk of security, we squander our time and effort by imagining we can somehow predict the "black swan" event---the thing which, by its very nature, is rare and unpredictable. Black swans hide within all complex systems, and there is no simple program which can fish them out, especially if you're looking at surface tensions and don't delve deeper. Throw all the money you like at "military intelligence" and you get what we've gotten: not much at all. So Taleb is not a fan of interventionism, either. Like muscles, people only grow through adversity, not by hiring bodyguards and manicurists. Ergo, demanding no risk and a quiet life in front of the boob tube will only get you heart disease and eventual bankruptcy. On the explanatory level, many people try to deny their fragility, claiming they are victims of trends or events (like Alan Greenspan did.) Their true reality is blindness to the big picture, not seeing the forest for the trees (information glut.) To become more than just resilient (to not simply survive but to thrive), he shows, requires eyes-wide-open, and the imagination to create new ideas based on a willingness to change, and a passion to grow from mistakes. The book itself is a learning experience, as it embraces trial and error, personal risk, and new ethical choices. "If you see fraud and don't say fraud, you are a fraud," Taleb insists. What I say is that this is one insightful and revolutionary book, and as such, it is Tower Review's latest Book of the Month.