The Antifragility of Restaurants and Terrorism

15. August 2013 · Write a comment · Categories: Antifragility, Birmingham

I have been thinking about the turnover of restaurants in Birmingham recently. There have been a number of new launches in the city in the last year, from Adam’s, with Michelin starred Adam Stokes, to Café Opus at Ikon to Le Truc, each replacing struggling previous ventures.

Nassim Nicholas Taleb makes the case, in his book Antifragile, for the antifragility of restaurants. As he says: Restaurants are fragile, they compete with each other, but the collective of local restaurants is antifragile for that very reason. Had restaurants been individually robust, hence immortal, the overall business would be either stagnant or weak, and would deliver nothing better than cafeteria food – and I mean Soviet-style cafeteria food. Further, it would be marred with systemic shortages, with, once in a while, a complete crisis and government bailout. All that quality, stability, and reliability are owed to the fragility of the restaurant itself.

I wondered if this argument could be extended to terrorism, in an equally Talebian sense.

But first, three false premises:

1. Terrorist attack frequency follows a power law distribution.

Following on from my previous post, I thought I had found another power law distribution in Nate Silver’s book The Signal and the Noise. He sets out a graph of the terrorist attack frequencies by death toll. The source of the data was the Global Terrorism Database for NATO countries from 1979 to 2009. I thought I would check this and downloaded an enormous 45Mb Excel file from the National Consortium for the Study of Terrorism and Responses to Terrorism (START). I decided to use the entire database (ie from 1970 to 2011), with the proviso that I would use only attacks leading to at least 5 deaths to keep it manageable (as Nate Silver had done). The START definition of terrorism is that it is only committed by NGOs, and they also had a strange way of numbering attacks which, for instance, counted 9-11 as four separate attacks (I adjusted for this). I then used a logarithmic scale on each axis and the result is shown below. Not even straightish, so probably not quite a power law distribution, it has a definite downward curve and something else entirely happening when deaths get above 500.

Terrorist attacks

In my view it certainly doesn’t support Nate’s contention of a power law distribution at the top end. On the contrary, it suggests that we can expect something worse, ie more frequent attacks with high casualties, than a power law would predict.

So what possible link could there be between terrorism and the demise of the Ikon café (there may be other restaurants where the food served met one of the other definitions of terrorism used by the Global Terrorism Database, ie intending to induce fear in an audience beyond the immediate victims, but not the Ikon)? Well, for one thing, they do have a made up statistic in common:

2. 90% of new restaurants fail within the first year.

This is a very persistent myth, most recently repeated in Antifragile, which was debunked as long ago as 2007. However, new business failures in general are still up at around 25% in the first year, which means the point that the pool of restaurants is constantly renewed by people with new ideas at the expense of those with failing ones remains valid. This process makes the restaurant provision as a whole better as a result of the fragility of its individual members.

3. 90% of terrorist groups fail within the first year.

Now I don’t know for certain whether this conjecture by David Rapoport is false, but given my experience with the last two “facts”, I would be very sceptical that the data (i) exists and (ii) is well-defined enough to give a definitive percentage. However, clearly there is a considerable turnover amongst these groups, and the methods used by them have developed often more quickly than the measures taken to counter them. Each new major terrorist attempt appears to result in some additional loss of freedom for the general public, whether it be what you can carry onto an aircraft or the amount of general surveillance we are all subjected to.

So what else do restaurants and terrorism have in common? What does a restaurant do when public tastes change? It either adapts itself or dies and is replaced by another restaurant better able to meet them. What does a terrorist group do when it has ceased to be relevant? It either changes its focus, or gets replaced in support by a group that already has. However, although individual terrorist groups will find themselves hunted down, killed, negotiated with, made irrelevant or, occasionally, empowered out of existence, new groups will continue to spring up in new forms and with new causes, ensuring that terrorism overall will always be with us and, indeed, strengthening with each successive generation.

The frequency of terrorist attacks, particularly at the most outrageous end, over the last 40 years would suggest that terrorism itself, despite the destruction of most of the people practising it amongst the mayhem they cause, has indeed proved at least as antifragile as restaurants. So, in the same way that we are all getting fed better, more and more people and resources are also being sucked into a battle which looks set to continue escalating. Because the nature of terrorism is, like the availability of pizza in your neighbourhood, that it benefits from adversity.

This suggests to me:

a. that we should rethink the constant upping of security measures against a threat which is only strengthened by them; and
b. that you shouldn’t believe everything you read.

The Clocks and the Wind

12. May 2013 · Write a comment · Categories: Birmingham, Economics, Prediction

There has been much discussion over the past few months over whether high levels of debt cause low growth (the “austerian” camp, eg Britain, Canada and Germany within the G7) or whether instead low growth causes high levels of debt to accumulate (the “Keynesian” camp, to which Japan appears to be providing leadership currently). There has been relatively little discussion about the possibility that neither is the case.

We are compulsive pattern spotters. That explains to a large extent our dominance as a species, and completely explains the dominant position that mathematics and its applications holds in our culture.

I was reminded most stirringly of this a few years ago, on a lunch break. The Ikon Gallery in Birmingham was hosting an exhibition by Japanese sound artist Yukio Fujimoto called The Tower of Time. However, instead of siting it at their gallery space in Brindley Place, it had instead been staged at Perrott’s Folly, just around the corner from my office at the time.

Yukio Fujimoto. The Tower of Time
Installation view – Perrott’s Folly, Birmingham, UK 2009  Photo: Stuart Whipps

Perrott’s Folly was built in 1758 by John Perrott. It is a building 94 feet high, with one room on each of its six octagonal floors, and no obvious purpose (hence “folly”). It may have been somewhere to spy on his wife from, while she was alive or dead, or it may have been a gambling den for him and his mates. Or it may have been something else entirely. I think we are unlikely to ever know for sure.

After a brief introduction on the ground floor, I climbed the stairs to the first floor to find one little black square alarm clock with a red second hand ticking in the middle of the wooden floor. The next floor had ten such clocks, in a row. The next 100, in a square, the fifth floor had 1,000.

A curious thing happened to me as I moved up the tower. The clocks’ mechanisms appeared to alter with altitude. I put it that way as an example of an obviously false causality, ie that the height above sea level in some way affected how the clocks worked (and before I get complaints, I mean effects that could be detected within a matter of a few tens of feet and with no measuring equipment other than my eyes and ears). Because what I saw did change. I looked at one clock and I could see that the battery was powering the gear mechanism that kept the second hand, minute hand and hour hand in their required relative motion. I looked at ten clocks in a row and I could see the same, although I also noticed the second hands were not all at the same point along the row and that there was an order in which each piece of red plastic reached the top before beginning the next circuit. I found myself having to watch the clocks for several minutes to see the pattern confirmed. But was this “pattern” anything which had any meaning, or was it just a way for my brain to store the images it was collecting in an easily fileable format?

When I moved to 100 clocks, the relevance of the gear mechanism became secondary. I could “see” lines of second hands moving together in the way that lines of plants in a cornfield move with the breeze. This, combined with the swooshing of 100 clocks (as the ticking of each individual clock combined to make a different noise – this change in sound was I believe the artist’s main reason for constructing the installation in the first place), made me need to check several times that one of the strange pointed windows in the tower had not been opened and let in a stray breeze. At 1,000 clocks it was just pure cornfield, the individual clocks now as hard to imagine as it had been to imagine anything else four floors below.

I can “see” that the “wind” is blowing a pattern through the second hands of the clocks and yet I “know” that this is not happening. Now transfer that wind I can see to a situation where I do not readily have a theory for what is happening to individual elements within a system. Suddenly what anyone with eyes can see becomes so much more powerful than what we might know. Returning to the austerity debate for instance, perhaps the individual growth clocks have no relationship with the patterns of debt I can see being blown through them. Perhaps if I just arranged the clocks differently I would see the wind blowing from a different direction. Perhaps the clocks and the wind have nothing to do with each other outside my head, despite the “evidence” of my eyes.

Why does it matter? Because if we cannot prevent ourselves from seeing patterns and then extending them via models where we have to make some things depend on other things, even in the face of weak and conflicting evidence, then we need to know this about ourselves. Because if giving a person the wrong map is worse than not giving him one at all, our natural instinct to construct these maps is likely to keep getting us into trouble.

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