Perversely, however, the very governmental policies that are designed to protect us all from the dangers of economic cycles and random problems are in fact making the world economy ever more fragile – more vulnerable, as a system, to unforeseen problems. And as I’ve written before, this is exacerbated by the increasing interconnectedness of our entire world economic system, which tends to speed up the “feedback loops” that drive cascades of sentiment and interactions. The recent economic crisis is a perfect illustration of his point. The simple fact is that there is no such thing as an invariant antifragile system – that is, tranquility and invariability inevitably lead any complex system (like the world economy) to become fragile, getting more rigid and increasingly vulnerable to unforeseen events the longer the system remains unstressed by changes.

Unfortunately, it is the ability of individual businesses to fail that makes the overall economic system antifragile. According to Taleb, “In a system, the sacrifices of some units—fragile units, that is, or people—are often necessary for the well-being of other units or the whole. The fragility of every startup is necessary for the economy to be antifragile, and that’s what makes, among other things, entrepreneurship work: the fragility of individual entrepreneurs and their necessarily high failure rate.” So business failures are unfortunate, but they are necessary.

If this were all there were in Taleb’s book it would be well worth the read, but there is much more.

via Don Peppers Is Your Business Fragile? Or Antifragile? | LinkedIn.