Skin in the Game – Nassim Nicholas Taleb
Nobody thinks like Taleb.
Employees Are Broken, Submissive Fellas
Employees display submission by going through years of personal deprivation.
Givin’ up 9 hours of one’s time for years, every day is the equivalent of domestication.
And showing up on time every day is the sign of an obedient, housebroken dog.
The question is whether you want to be a housebroken dog or a free wolf.
However, being a wolf comes with risks. Wolves who seek their own paths have skin in the game.
Minority Rule Is Destroying The West
In societies, minorities can come to dictate the rules to the majority.
This usually happens because of asymmetry or because when the majority is either too flexible, too accommodating, or too indifferent.
A case of asymmetry is between smokers and non-smokers.
A smoker can sit in a smoke-free area but a non-smoker cannot sit in a smoker area, so the non-smokers will prevail even if they are the minority.
However, this can become an issue when the minority prevails because it’s more aggressive or more intolerant.
It is the most intolerant person who imposes virtues on others precisely because of that intolerance.
We need to be more than intolerant with some intolerant minorities. The West is currently in the process of committing suicide.
Fat Tony’s motto
You do not want to win an argument. You want to win.
Indeed you need to win whatever you are after: money, territory, the heart of a grammar specialist, or a (pink) convertible car. For focusing just on words puts one on a very dangerous slope, since we are much better at doing than understanding.
Crook, Fool, or Both
There is always an element of fools of randomness and crooks of randomness in matters of uncertainty; one has a lack of understanding, the second has warped incentives. One, the fool, takes risks he doesn’t understand, mistaking his own past luck for skills, the other, the crook, transfers risks to others.
There is another point: we may not know beforehand if an action is foolish—but reality knows.
It’s intellectual Who Are Jealous of The Super Rich
it’s not the poor who are actually envious of the rich and it’s not the poor who first embrace communist movements.
It’s usually the bourgeois and the intellectuals and the clerical class who first embrace communism. It’s because of jealousy.
Feeling of shame
Sometimes I would offer something for sale for, say, $5, but communicated with the client through a salesperson, and the salesperson would come back with an “improvement”, of $5.10.
Something never felt right about the extra ten cents.
It was, simply, not a sustainable way of doing business. What if the customer subsequently discovered that my initial offer was $5?
No compensation is worth the feeling of shame.
The Idiocy of Naive Empiricism
You often hear people saying that you are more likely to die by X silly thing -ie.: coconut falling- than by terrorist attacks or Ebola outbreaks but that makes no sense.
People dying because of falling coconuts or people who die by drowning in their bathtub will never double from one year to the other -they are examples of mediocre stand-.
But the effects from events in an extreme stand, say a huge virus outbreak or a series of terrorist attacks, can increase the death toll by several orders of magnitude.
Those who don’t take risks should never be involved in making decisions
Overestimating tail risks makes sense
It’s perfectly rational to overestimate some tail risks because you can’t consider them in isolation.
Driving after 2 glasses of wine once will not be extremely dangerous, but doing so every day is.
When you measure tail risks in the laboratory you only consider one tail risk at a time, and that’s why their conclusions are wrong.
Subjects are being rational in overestimating the risk because, chances are, they are likely already running several tail risks in their lives.
Complex Systems Don’t Work With Simple Cause/Effect
And when in doubt, it’s better not to mess with these systems. Starting a war to implement democracies is an example of messing with a complex system.
Clueless politicians compare a local dictator not with the local alternatives but with a Norwegian prime minister.
These people keep staying at their jobs even their reckless decisions because they don’t have skin in the game. Nobody paid anything for the Iraqi invasion or for supporting “Arab spring” failed uprisings.
I Am Dumb Without Skin in the Game
Many kids would learn to love mathematics if they had some investment in it, and, more crucially, they would build an instinct to spot its misapplications.
Soul in the game
People who are not morally independent tend to fit ethics to their profession (with a minimum of spinning), rather than find a profession that fits their ethics.
Heroes Were Not Library Rats
Studying courage in textbooks doesn’t make you any more courageous than eating cow meat makes you bovine.
By some mysterious mental mechanism, people fail to realize that the principal thing you can learn from a professor is how to be a professor—and the chief thing you can learn from, say, a life coach or inspirational speaker is how to become a life coach or inspirational speaker.
The curse of modernity
The curse of modernity is that we are increasingly populated by a class of people who are better at explaining than understanding,
or better at explaining than doing.
From Hammurabi to Kant
Hammurabi’s best-known injunction is as follows: “If a builder builds a house and the house collapses and causes the death of the owner of the house—the builder shall be put to death.”
Mental accounting is correct
Betting harder with money you won and being more conservative with your own money makes sense because that’s how you survive.
Thaler and other behavioral economists don’t get it because they see the world as a one-shot game instead of a series of repeated trades.
Taleb’s Worthy Quotes
- You cannot steal “a little bit” or murder “moderately” — just as you cannot keep kosher and eat “just a little bit” of pork on Sunday barbecues.
- The Romans judged their political system by asking not whether it made sense but whether it worked.
- Anything that smacks of competition destroys knowledge.
- Men feel the good less intensely than the bad.
Silver Beats Gold
The Golden Rule wants you to Treat others the way you would like them to treat you.
The more robust Silver Rule says Do not treat others the way you would not like them to treat you.
From Kant to Fat Tony
Don’t give crap, don’t take crap.
More practical approach is:
Start by being nice to every person you meet. But if someone tries to exercise power over you, exercise power over him.
Artisans have their soul in the game
Artisans do things for existential reasons first, financial and commercial ones later. Their decision making is never fully financial, but it remains financial.
they have some type of “art” in their profession; they stay away from most aspects of industrialization; they combine art and business.
they put some soul in their work: they would not sell something defective or even of compromised quality because it hurts their pride.
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