Share This

Showing posts with label Wisdom. Show all posts
Showing posts with label Wisdom. Show all posts

Thursday 12 May 2022

Sun Tzu - The Art of War Explained; Putin maybe using Sun Tzu and The Art of War strategy

 Sun Tzu - The Art of War Explained

  
The Art of War is the most influential treatise on war ever written, consisting of 13 chapters each of which is devoted to one aspect of warfare, it has shaped the way in which conflicts have been fought for thousands of years from the Japanese samurai to the Napoleonic war. Not only has the book influenced military commanders and generals all over the world, it has had resounding effects on politics, sports and business to this day. 
 
In this video, we give key examples of Sun Tzu's most influential philosophies and strategies. These range from the Vietnam War to the coasts of Normandy in 1944. 
 
 

 The Art of War by Sun Tzu: Entire Unabridged Audiobook (Powerful Narration)

The Art of War is an ancient guide on military strategy. Written by Sun Tzu a Chinese general and philosopher in the 5th Century B.C. It was created after he helped successfully defend the Chinese province of Wu against the province Chu. 

The strategies in this book have been used for hundreds of years in military campaigns, business and sports. It is the ultimate guide on how to defeat an opposing force in whatever form that might take. Contrary to what we might expect, The Art of War actually advises to avoid fighting as much as possible by only striking targets that are weak and using manipulation to subdue the enemy. 

Ultimately Sun Tzu teaches us how to have the advantage in conflict giving us the best possible chance of success. My hope for this production was to provide an exciting and digestible rendition of this ancient text that can help people learn these strategies for years to come. 

Putin maybe using Sun Tzu and The Art of War strategy

 
Since the American engineered coup in 2014 that brought Zelensky to power, the American and NATO have been quietly setting up the command centre for NATO operation against the Russians under the Azovstal steel plant. 3 major goals were achieved in the last 8 years, a command centre, a major biochem weapon station and a regiment of neo Nazi soldiers. All these were done stealthily, top secret military stuff. And they executed these so successfully under the nose of the Russians...without the Russians knowing?

With so many top generals and scientists shuffling in and out of the secretive underground fortress, with so many soldiers, and with so many logistics, biochemical weapons in the facility, it was a very well kept secret!

Putin was not appointed to head the KGB as a political appointee. He earned his spurs as an intelligent secret service officers. To be appointed as head of KGB, unlike the head of CIA, the latter a political appointment, meaning any idiot or clown could also be offered the job, it meant that Putin was the best of the best in KGB/Russia. Can't imagine how sleepy Joe is going to test his wits against the best of the KGB.

Putin and the Russians did not know of the death machine under the Azovstal steel plant? His original plan was to take Kiev? All his tanks and heavy military vehicles were lined up on the roads to Kiev, clearly visible by satellite images. No need guessing. The Americans and Ukrainians knew exactly what Putin was going to do. He is going to attack Kiev. The people in the Azovtal stronghold too thought they were very safe, very secure, unknown and undetected by the Russians. And their daily activities continued unchanged. 

Everything was normal in Mariupol. In fact, the Americans and NATO must have felt very safe and no one left the fortress. If only they knew what Putin was up to. If only they knew that they have been exposed, all the big fish would have fled. Was it American and NATO arrogance, or was it Putin's brilliance, the attack on Kiev was expected but fizzled out quickly.  By then, the Russian troops have all encircled the Azovstal fortress. Too late to run. No one is going to escape the dragnet of Putin.

Did any of the very clever American analysts and intelligence officers saw this coming? How could they missed the signs, the decoy, the diversionary strategy of Putin, look West and strike East? Putin's deception was as perfect as you can get from the point of military strategy. Of course the arrogance and stupidity of the Americans and NATO helped, making it so easy for Putin to round them up in one move. Now, as the Chinese strategists like to call it, Putin is hauling in the net, with all the big fish and crocodiles inside.

Putin is as good a military genius as he is expected. And he did not fail his believers with this war of deception in Ukraine. Now the Americans is pulling every string they could find to get in touch with Putin to release the big fish and crocodiles in the Azovstal fortress. The UN Sec Gen Antonio Guterres, and the Pope Francis had to make personal trips to Moscow to see Putin. 

After all the hard work plotting to capture the Azovstal fortress, including the big fish and crocodiles and all the biochemical weapons inside, it would not be so easy to appease and persuade Putin to give up his prized catches so easily. Now the Americans and NATO are at the mercy of Putin. Do not be surprised if the desperate Americans and NATO would do a last ditch assault in Mariupol to free their valued generals and scientists. When Lt Trevor Cadieu is only in charge of a biochem weapon unit, one can easily imagine how many more generals would out rank him in the fortress. Then there would be the commanding officer of this top secret facility and his deputies. The Brits French, Germans and many other NATO top brass are likely to be in the same hole under the steel plant.

These are early Christmas presents for Putin, though they came with a lot of planning and effort. For the slightest indication that the fortress' existence had been exposed, or Putin's game plan was to capture the fortress and all the top brass and biochemical weapons in them, all the top brass would have scooted long before the war started, and all the biochemical weapons would have be transferred elsewhere. Now they would be top exhibits in Putin's case against the Americans and NATO, to be shown to the whole wide world.

Never had the Americans and NATO been in such a dire strait, with their balls being squeezed by Putin and they could not do anything about it short of an outright military confrontation, an assault on the Azovstal steel plant with the full force of American and NATO forces.

No amount of propaganda can distract the success of Putin in his set up to capture the Azovstal fortress lock, stock and barrel. These would now become very expensive chips in the pocket of Putin, and the Americans and NATO would have to pay a very heavy price for their return.  How many generals or military strategists today could claim such a success against the American Empire and NATO? And to think of it, the Americans and NATO still did not have any clue what was Putin up to. Still guessing and spreading nonsense about the intent of Putin, and still claiming fake victories against Putin everyday.

 

Related:

 

Nearly 1,730 Ukrainian soldiers surrendered at Azovstal steel plant 

 https://www.thehindu.com/news/international/nearly-1730-ukrainian-soldiers-surrendered-at-azovstal-since-monday-russia/article65429599.ece

 

Propaganda, media – the fog of war | The Star

 

Farewell: A woman saying goodbye to a relative aboard a train travelling to Przemysl, Poland, amid Russia’s invasion of Ukraine. — Reuters

https://www.thestar.com.my/opinion/columnists/along-the-watchtower/2022/04/27/propaganda-media---the-fog-of-war 

 

Related posts:

 

Unmasking the superpower

 

Human rights development much broader in China than in the West

 

Cold War schemer: Reminiscing in its past ‘victory,’ US brings color revolutions to 21st century to maintain its hegemony

 

Unmasking the superpower America, the 'Dark Lord' set on destroying international order


Saturday 2 February 2013

Succession issue: give children a message,not money

Billionaire Kuok says empire can last generations

When billionaire Robert Kuok introduced a luxury hotel brand in 1971, he named it Shangri-La, after the fictional utopia in which inhabitants enjoy unheard-of longevity.

Ensconced in his executive suite 32 floors above Hong Kong’s Victoria Harbor -- the room decorated with a pair of elephant tusks gifted by the late Tunku Abdul Rahman, the first prime minister of Malaysia -- the world’s 38th-richest person appears to have defied the aging process himself.

Kuok had accumulated a fortune of $19.4 billion as of Jan. 31, according to the Bloomberg Billionaires Index. Trim, dapper and straight backed at 89, he shows no signs of stopping there, Bloomberg Markets magazine will report in its March issue

Kuok Says With Right Heir His Empire Can Last `Four Generations’
A waiter serves a customer at the bar at the Shangri-La Hotel in Paris. Photographer: Eric Piermont/AFP/Getty Images 
 

This year, the media-shy Malaysian-born magnate will likely open his 71st sumptuously appointed Shangri-La. Six of them are scheduled to be opened in the third quarter alone, including one perched in the Shard, the 72-story London skyscraper that’s the tallest office building in Western Europe.

Meanwhile, the public and private companies his family controls continue to pump money into his ancestral homeland, China, where his investments range from Beijing’s tallest building to cooking oil brands that have gained a 50 percent market share in the world’s most populous nation

Kuok Says With Right Heir His Empire Can Last `Four Generations’ Robert Kuok shovels dirt at a ground breaking ceremony for the Shangri-La Asia Ltd.'s new hotel in Guangzhou on Feb. 26, 2004. Through the unlisted family-owned holding company, Kerry Group Ltd., which he chairs, Kuok controls listed enterprises with a total market value of about $35 billion. Photographer: Grischa Rueschendorf/Bloomberg

‘Personally Powerful’


Kuok Says With Right Heir His Empire Can Last `Four Generations’
One of Kuok’s companies, Singapore-listed Wilmar International Ltd. (WIL), is the world’s biggest processor of palm oil and eighth-biggest sugar producer. 

Wilmar International Ltd.’s cooking oil brands —led by Jin Long Yu, meaning Golden Dragon Fish, seen in this photo — grease half of China’s woks and generate 48 percent of the company's revenue. Photographer: Qilai Shen/Bloomberg

Kuok Says With Right Heir His Empire Can Last `Four Generations’ Western Europe's tallest office building will be home to one of Robert Kuok's new luxury Shangri-La hotels. Six are scheduled to be opened worldwide during the third quarter. Photographer: Jumper/Getty Images

Others operate shipping and logistics businesses, a property portfolio stretching from Paris to Sydney and East Asia’s most influential English-language newspaper, the Hong Kong-based South China Morning Post.

“He’s so vital, so active and continues to be so personally powerful,” says Timothy Dattels, San Francisco-based senior partner at U.S. buyout firm TPG Capital LP and a director of Kuok’s Hong Kong-listed Shangri-La Asia (69) Ltd. “I can’t imagine a day without him at the top.”

Kerry Group chairman Robert Kuok Others can, which is why the question of succession looms over the Kuok empire as the patriarch prepares to mark his 90th birthday in October.

The world’s 39th-richest person, who named his Shangri-La hotel chain after the fictional utopia in which inhabitants enjoy unheard-of longevity, is trim, dapper and straight backed at 89. The public and private companies his family controls include investments in Beijing’s tallest building and cooking oil brands that have gained a 50 percent market share in China. Photographer: Grischa Rueschendorf/Bloomberg  

Through the unlisted family-owned holding company, Kerry Group Ltd., which he chairs, Kuok controls listed enterprises with a total market value of about $40 billion.

As it stands, the family enterprises are seeking to recover from a rocky 2012 that featured some sharp share-price and profit drops

First Interview

In his first interview with Western news media in 16 years, Kuok, who has eight children and numerous other relatives sprinkled through his executive ranks, says he won’t be worried when that day eventually comes.

“Everything on earth is dynamic,” he says in perfectly enunciated English. “I can only give my children a message, not money. If they follow it, we can go another three or four generations.” 

Relatives run the most important of the Kuok businesses.

Kuok’s second son, Kuok Khoon Ean, 57, heads Shangri-La Asia, of which the family owns 50 percent.

A nephew, Kuok Khoon Hong, 63, co-founded and chairs Wilmar International, the largest Kuok-controlled company, with a market value of almost $20 billion, in which the Kuok family controls a 32 percent stake.

A daughter, Kuok Hui Kwong, 35, is executive director of SCMP Group Ltd., publisher of the 109-year-old South China Morning Post, which Kuok took control of in 1993, when he paid Rupert Murdoch’s News Corp. $349 million for a 35 percent stake.

Kuok Says With Right Heir His Empire Can Last `Four Generations’ Pedestrians walk past the headquarters of the South China Morning Post in Hong Kong. Robert Kuok's daughter, Kuok Hui Kwong, 35, is executive director of SCMP Group Ltd., which Robert Kuok took control of in 1993, when he paid Rupert Murdoch’s News Corp. $349 million for a 35 percent stake. Source: Imaginechina

Focus Attention

As to who will succeed the master, most investors in Kuok enterprises focus attention on his eldest son, Kuok Khoon Chen, 58, who’s known as Beau.

Robert declined to confirm that Beau, who is deputy chairman of Kerry Group, will succeed him.

Kuok Says With Right Heir His Empire Can Last `Four Generations’ The development site for the Shangri-La Residences stands in Yangon, Myanmar on Nov. 20, 2012. Photographer: Dario Pignatelli/Bloomberg

“Newshounds like excitement in their stories, whereas leadership of a business group is always a serious matter, and it would be wrong to put in writing any kind of assumption,” Kuok wrote in an e-mail following the interview.

Kuok Says With Right Heir His Empire Can Last `Four Generations’ A visitor looks out the window of Island Shangri-La hotel, owned by Shangri-La Asia Ltd., in Hong Kong. Robert Kuok’s second son, Kuok Khoon Ean, 57, heads Shangri-La Asia, of which the family owns 50 percent. Photographer: Marco Flagg/Bloomberg
 
Beau, who’s worked in his father’s businesses since 1978, is chairman of Kerry Properties Ltd. (683) The firm, 55 percent owned by Kerry Group, develops luxury apartments, shopping malls and offices mostly in China and Hong Kong. 

“I know Beau, and he has a good team,” says Peter Churchouse, founder of Hong Kong-based property investor Portwood Capital Ltd. “But you have to wonder whether the second and third generations have the entrepreneurial and trading instincts that the father has.”

‘China Watcher’

The father’s instincts were honed over decades of personal and historical turbulence inconceivable to the generation vying to take over the family business.

That experience helped him become one of the first -- and best-connected -- foreign investors in China following Mao Zedong’s communist revolution.

Kerry Group chairman Robert Kuok “Robert is the best China watcher in the business,” says Simon Murray, chairman of Glencore International Plc, the world’s biggest commodities-trading company. “He understands the steel backbone of the Communist Party, but while other Hong Kong tycoons tend to be hugely subservient to Beijing, he is in no way obsequious.”

Robert Kuok, chairman of Kerry Group Ltd., holds a trophy during the 2012 CCTV China Economic Person of The Year award at China Central Television in Beijing on Dec. 12, 2012. Source: ChinaFotoPress via Getty Images

For all of Kuok’s prowess, 2012 was a tumultuous year for investors in his enterprises.

While Kerry Properties stock surged 57 percent in Hong Kong last year -- more than double the increase in the Hang Seng Index -- Wilmar International’s shares plummeted 33 percent, making it the worst performer in Singapore’s Straits Times Index. (FSSTI)

‘A Fraction’

The plunge wiped the equivalent of more than $8 billion from the company’s market value -- and almost $3 billion from the family’s fortune. This year, Wilmar’s share price has rebounded, rising 14 percent in January.

In any event, Kuok disputes Bloomberg’s valuation of his personal wealth at $19.4 billion; he says it’s “a fraction” of that amount, though he does not volunteer an alternative figure.

Wilmar’s woes stem from its massive exposure to China, where its cooking oil brands -- led by Jin Long Yu, meaning Golden Dragon Fish -- grease half the country’s woks and where it gets 48 percent of its revenue.

Beijing limited price increases on edible oils during most of 2011 and part of 2012, Wilmar said at the time.

Furthermore, the rising cost of soybeans, which Wilmar uses to produce cooking oil, hit a record $17.89 a bushel in September, squeezing earnings.

Rough Ride

In the first nine months of 2012, profit fell 29 percent to $779 million from $1.1 billion a year earlier.

Kuok’s Hong Kong-based companies have had a rough ride since the global financial crisis.

As of Jan. 31, Shangri-La Asia and Kerry properties shares were both down 19 percent compared with a 1 percent increase in the Hang Seng Index. Asked about such underperformance (583), Kuok says enigmatically, “It is right and proper for the investor to like or dislike a share.”

Underperformance isn’t the only problem at SCMP Group, whose share price had declined 69 percent as of Jan. 30 since Kuok acquired it. In 19 years, the South China Morning Post has churned through 11 editors, including one who served twice.

And although Kuok says his news executives publish without fear or favor, present and former staff members have publicly complained that the paper sometimes self-censors stories it thinks the Chinese government wouldn’t like.

‘Toned Down’

“Under his ownership, criticism of China has been toned down,” says David Plott, managing editor of Global Asia, a Seoul-based quarterly. “And if you look at the turnover of editors, it tells you one of two things: either Robert Kuok doesn’t know what he wants or he knows what he wants and he hasn’t gotten it.”

If that’s true, it might be a first for Kuok, whose life story has been one of single-minded achievement.

The son of Chinese immigrants who had settled in British- controlled Malaya, Robert Kuok Hock Nien -- his full name -- grew up speaking his parents’ Chinese Fuzhou dialect, English and even Japanese during Japan’s wartime occupation of the region.

 Significantly, given the role China would play in Robert’s life, his mother encouraged him to achieve fluency in Mandarin and embrace his Chinese heritage.

Kuok’s parents ran a shop that sold rice, sugar and flour. Kuok recalls living with the smell of his addicted father’s opium pipe in his nostrils.

Family Business

Still, there was enough money for Robert to progress from a local English school to Raffles College in Singapore, where fellow students included Lee Kuan Yew, later the founder of modern Singapore.

Kuok never finished his studies. In 1941, Japanese troops stormed through the Malay Peninsula and in February 1942 captured Singapore. Kuok took a job with Mitsubishi Corp. With Japan’s defeat in 1945, his family resumed doing business under the British.

In 1949, after his father died, Robert; a brother, Philip; and other relatives founded Kuok Bros. Sdn., which later specialized in sugar refining.

Philip went on to become a Malaysian diplomat, and a second, much-admired brother, William, took an entirely different path again by joining the communist revolt against colonial rule. In 1953, William Kuok was killed by British troops in a jungle ambush.

Furtive Rendezvous

Robert Kuok, by contrast, used his English-language skills on visits to London to learn the sugar business while remaining based in Malaysia and later Singapore.

During the Cold War, he traded with both Western and communist blocs, meeting Cuba’s Fidel Castro and doing business with China’s Mao from as early as 1959.

In 1973, with China in the grip of the Cultural Revolution, Kuok was summoned to Hong Kong for a furtive rendezvous with two of Mao’s trade officials.

They confided that China was facing a sugar shortage. Kuok stepped into the breach, transferring his headquarters to Hong Kong that year.

It was a prescient move. In 1976, Mao died, and in 1978, Deng Xiaoping tore down the so-called Bamboo Curtain, initiating reforms that sparked 34 years of surging economic growth.

In 1984, Kuok opened his first Shangri-La on the mainland. The following year, he partnered with China’s foreign trade ministry to begin building the China World Trade Center (600007) in Beijing.

Enduring Mystery

In 1988, at his nephew Khoon Hong’s suggestion, he branched out into edible oils. By 1993, Coca-Cola Co. was impressed enough with Kuok’s China connections to form a bottling joint venture with him.

That lasted until 2008, when Coke bought back Kerry Group’s stake for an undisclosed amount, both companies pronouncing the outcome a success.

The family’s history of that period harbors an enduring mystery: a 16-year parting of the ways between Robert and Khoon Hong, who in 1991 left the Kuok Group to set up Wilmar with Indonesian entrepreneur Martua Sitorus.

It wasn’t until 2007 that Robert acquired a 32 percent stake in Wilmar and injected most of his agribusiness into it. Neither Robert nor his nephew would discuss the split.

For all his triumphs in the capitalist world, Robert Kuok says the biggest influences on his life were his devoutly Buddhist mother and his communist revolutionary brother, William.

‘Good Boys’

“Otherwise, probably I would have been an arrogant middle- class Chinese, only caring about materialism, worldly pleasures and fleshpot pleasures,” Kuok says, his moist eyes betraying a momentary sadness. “When I am tempted, I think of what William went through. He sacrificed his life trying to help the underprivileged.”

Kuok says he has tried to pass on those values by not cocooning his children in privilege. Nor, he adds, does he place much emphasis on scholastic qualifications, including MBA degrees, when hiring senior staff.

Beau Kuok earned a bachelor’s degree in economics from Monash University in Melbourne; Ean holds a similar qualification from the University of Nottingham in England. Kuok describes Beau and Ean as “good boys.”

Among members of the extended family, Kuok speaks highly of Khoon Hong, his nephew at Wilmar.

‘Stupid Ones’- Perils of succession

“There are stupid ones, there are mean ones, but he’s one of the cleverest,” Robert Kuok says. None of the second- generation Kuoks would comment for this article. Kuok says they make their own decisions. “I never control my children,” he says. “We are a very liberal, democratic family.”

The perils of succession are acute in Kuok’s bailiwick, according to researchers at the Chinese University of Hong Kong.

Their study of 250 family-controlled businesses in Hong Kong, Singapore and Taiwan from 1987 to 2005 shows that stocks typically plunged 60 percent over an eight-year period before, during and after a founder’s relinquishing control.

Joseph Fan, the finance professor who led the research, attributes this wealth destruction to the inability of the patriarch to pass on, even to family members, his most valuable, intangible assets, including relationships with governments and banks. “The founder is the key asset,” Fan says.

That’s why, Fan says, so many tycoons remain at the helm of their businesses well into their 80s and don’t disclose succession plans.

Octogenarian Rivals

Last year, following investor concerns over feuds that have split the second generation of some of Hong Kong’s most prominent families, two of Kuok’s octogenarian billionaire rivals in the property business, Li Ka-shing of Cheung Kong Holdings Ltd. and Lee Shau-kee of Henderson Land Development Co., finally disclosed which of their progeny would eventually take control.

TPG Capital’s Dattels says succession isn’t a concern when it comes to the Kuok businesses.

“There’s only one Robert Kuok, there’s no doubt,” he says. “But he has instilled his business philosophy deep into the family. With what he has built, they are well set to continue, whatever happens.”

Back at his Hong Kong headquarters, Kuok asks an assistant to bring him a favorite quotation. Written by his mother in Chinese and engraved on a steel plate, the aphorism reads:

“If my children and grandchildren can be like me, then they don’t require material inheritance. But if they are not like me, then of what use is my wealth to them?”

Those words beg the question investors in Kuok’s far-flung businesses are asking now more than ever: How like Robert Kuok are his heirs? - Bloomberg

Saturday 5 January 2013

Understanding the Chinese mind

BROWSING through my library during the holidays, I came across a book on comparative Western and Chinese philosophy that had an old saying: “Every Chinese person is a Confucian when everything is going well; he is a Taoist when things are falling apart; and he is a Buddhist as he approaches death.”
 Chinese culture is like ancient pyramids of different worldviews built over one another. The earliest was animism, where one believed different gods; the Book of Changes taught two sides to every story; Confucianism was about knowledge of self; Taoism about following the natural Way; Legalism about ruthless pragmatism and order; Buddhism about letting it go. In the 20th century, China imported Western influences from Marxism to science and technology.

It is commonly believed that the Chinese think very differently from Westerners. Western minds are considered logical and scientific, whereas the Chinese mind is supposed to be elliptical, contextual and therefore relational. One possible reason is the ideogramatic nature of the Chinese language, based on pictures rather than alphabets, which positions everything in relation to everything else.

The Chinese word for crisis is both risk and opportunity; for contradiction an impenetrable shield facing an unstoppable spear. Chinese thinking tends to sees things within systemic context and history, probably because the fount of Chinese philosophy is the I Ching or the Book of Changes, circa 1049 BC, which is essentially dialectic in tradition, seeing the world as emerging from the conflict, synthesis and evolution from contradictory opposites.

Western science and intellectual tradition stems primarily from Greek Aristotlean logic, which is reductionist and linear, reducing complex ideas into simple theories and principles that could deduce, explain and predict the future. Aristotlean logic prevailed in the West, until the German philosopher Hegel (1770-1831) developed dialectics based upon the concept that everything is composed of contradictions, with gradual changes becoming crises. Karl Marx (1818-1883) built on Hegelian dialectics into historical change through class struggle and dialectic materialism, whereas Mao Zedong fused Marxism into Chinese agrarian reality to form a theory of revolutionary knowledge through practice.

In the 20th century, natural science, such as physics, mathematics and biology began to evolve away from the social sciences, particularly economics. The Anglo-Saxon tradition of linear, logical thinking continued to dominate in social science, through philosophers such as Karl Popper, who rejected the vagueness of dialectics. On the other hand, quantum physics, quantum mathematics, biology and information theory began to evolve into binary worldviews whereby change in nature evolved through the synthesis or erosion of opposites. This is much closer to ancient Chinese and Indian views that saw the world in constant change.

What has been missing so far has been a synthesis of the two divergent worldviews.

In his new book Antifragility: How to live in a world we do not understand, Black Swan author Nassim Taleb introduced option theory as a general tool to bridge dialectic thinking with mainstream bell curve statistics. The normal “bell curve” distribution is a widely used statistical tool for decision making in mainstream social science. Social scientists look for statistical significance in the high probability (95%) or “robust” zone of the bell curve, tending to ignore low probability events (2.5% each) in the long tails.

By ignoring the long tail events that occur rarely but have large impact when they occur, mainstream thinking like the economic profession missed systemic events like that 2008 financial crisis. There are of course two long tails, one being the “bad” Black Swan events that create systemic damage when they occur.

The other is the upside or “good” long tail events. Nassim calls “anti-fragility” as good actions that compensate for “fragility”, the bad events.

Intuitively, Taleb has reframed Chinese philosophy in modern mathematics with a scientific explanation. What he calls the central Triad of exposures Fragile, Robustness and Antifragile has the analogy in the Chinese trinity of female (ying), Golden Mean and male (yang).

The Confucian concept of Golden Mean seeks to avoid extremes and take the safe middle path. But Taleb's insight shows why the Golden Mean gets into trouble, because playing safe and mainstream ignores the uncertainty of Black Swan events that could eventually damage the system as a whole. Prudence and conservatism through adopting the Golden Mean prevents the practitioner from adopting “antifragile or (good) high risk-high payoff” strategies that would compensate for the uncertain unknown bad Black Swan events.

A Buddhist would immediately recognise the need to build up good deeds to compensate for the bad deeds that may befall oneself.

By not taking risks, Chinese dynasties that adopted Golden Mean strategies became closed societies that eventually imploded when disaster struck. On the other hand, in the run up to the Industrial Revolution, Western societies took large risks with high payoffs, in science, technology and even colonialism. Western society compensated for fragility by taking anti-fragile measures. No risk, no gain.

The easiest way to think about options and antifragile strategies is in stock market investment. Suppose you adopt a conservative strategy that follows what the market does on average (follow the index). If however the market suddenly drops by 30%, and your portfolio declines by 30%, you will never recover your capital if you continue to adopt market following Golden Mean strategy. To recover or do better, you have to take small bets on risky shares that are “anti-fragile”, meaning that if they win, they win big.

Antifragility loves volatility. Making small mistakes will avoid large mistakes. The more you try to be stable, the more unstable you become, which Keynesian disciple Hyman Minsky rediscovered as “stability creating instability.”。

Taking non-linear options on high risk-high return ventures was exactly what Deng Xiaoping did in his opening up strategy. He knew that the risks of failure were high (and unknown) but taking options by opening up new development zones and new policies created new payoffs and growth areas that were not imagined by the critics.

In 2013, Deng's successors may be making new, anti-fragile options.


THINK ASIAN By ANDREW SHENG
Andrew Sheng is president of the Fung Global Institute.

Rightways