An Antifragile Ecosystem of Cities
June 1, 2016

This was originally posted on Strong Towns as a response to a question on Nassim Taleb's book, Antifragile. The question was;

Mithridates drank poison in small amounts to strengthen himself against poisons. This reminds me of the starve-the-beast political argument that we should simply cut government budgets to make government systems more efficient. This *might* make them more robust but seems unlikely to make them antifragile and, as Mithridates found, might simply make them easier to die by the sword than poison. In an antifragile context, make the case one way or the other. Is there an antifragile way for state and federal governments to fund city operations?

In his Tuesday essay, "Mithridatizing City Budgets," Chuck Marohn gave a good response to making a city's budget antifragile by introducing a little uncertainty through a lottery system that randomly reduces or increases state aid each year. Over the generation of the lottery, which may be 4, 12, or any number of years, cities will still have received the same amount of aid as they will today. This is a good start -- introducing a little bit of uncertainty. However, I feel that this will mostly teach cities how to average the spending of their aid (knowing that across the generation of the lottery, the amount of aid has not changed), rather than how to wean themselves off of it.

Comfort Leads to Fragility

Taleb writes that comfort leads to fragility. We know this - if we stay in bed, our muscles and bones become fragile. If we remove all mental stressors and unpredictability, our minds become fragile. Antifragile systems need small amounts of uncertainty just to survive. Hand holding teaches us not to think for ourselves, but merely how to follow instructions. If cities and the status quo are benefiting from the current situation -- even if it is to their long term detriment -- it is hard to get them to change with a "Pretty please."

Taleb also writes that antifragile systems can be made up of fragile components, as long as each component is not fragile to the same things. We see this in nature -- a forest of consisting of a monoculture of trees is vulnerable to a single disease, while no single disease can wipe out a forest consisting of a diverse range of species. This is why we should bring decision-making to the lowest level possible. If you have an approach that has a 50% chance of success or failure, would you rather this approach be tried out at the state level with everyone succeeding or failing at the same time? Or, would you rather it be tried out at the neighborhood level, where the approaches that work can spread and be tweaked for local conditions, and failures are small and contained?

Learning from Failure

We learn more from our failures than our successes. Never trust a businessman or a politician who claims to have never made a mistake, because it means they have never learnt anything. We should not be scared of failure, but we should try to allow this failure to happen at the lowest level where the effects are minimized when failure does occur. The more trial and error, the more case studies and examples we have, and thus, the more we learn. It is important that we make our decisions at the lowest level possible to both minimize the risk when failure occurs and to increase the variety of the decisions that are made.

If we want to return control and decision making to the local level, we need to wean our cities off the morphine drip that is state and federal aid. How do we do that? Honestly, I don't know the best way. And I think not knowing is fine. But, I don't think the answer will be found in a textbook or from an expert who claims to have all of the answers. Because we are entering unexplored territory, is there a way we can do this slowly and incrementally where we can observe and learn, and failures are contained, before we just whip the IV out?

A Proposal

I will describe one idea I have. Let's say that we have a goal to eliminate state aid to local municipalities within 20 years. For each of those years we will hold a lottery, and each year, 5% of municipalities win the lottery. These municipalities are notified and are given a year to prepare. After that year, those municipalities will receive absolutely no aid or transfer of payments from the state (except in extreme emergencies such as a natural disaster, which should be rare.) In exchange, residents and businesses in those municipalities are given a tax break, and the municipalities are given the power to raise taxes locally to make up for the shortfall.

Each municipality is given the freedom to come up with its own approach, and many will fail. But, we should not be scared of failure, because we learn more from our failures than our successes, and the failures will be isolated, with those municipalities having the freedom to change their approach. As more municipalities win the lottery, we will have more case studies of what works and what does not work. Additionally, the sense of urgency created by the lottery (even by those municipalities that have not won yet, but could possibly win the following year) will force us to think more intelligently about the decisions we make today.

We have the ability to build an antifragile ecosystem of cities. The alternative is to sit idly by, while watching the fragility of the current system being pushed to its limits, then watching the entire system collapse at once, with everyone coming down at the same time.