Thread by @itstheASK

1. Skin in the game is about 4 topics ( to understand the world)
* A Uncertainty and the reliability of knowledge- Basically how to detect bullshit, and thus filter the information.

B. Symmetry in human affairs, that is, fairness justice, responsibility, and reciprocity. Basically, if you have the rewards, you must also get some of the risks and not let others pay the price of your mistakes. - Don’t tell me what you think, tell me what you do.

C. Information sharing in transactions. Knowing how much information you should practically share with others, ex: what a used car salesman should ( and shouldn’t ) tell you about the vehicle on which you are going to spend your savings.

D. Rationality in complex systems and the real world and how it can face the test of time. Rationality in the real world is not about what’s right for the world, etc, but what is linked to your survival.

2. Skin in the game is about having to share the harm, paying the penalty, if something goes wrong because you made the decisions. The book focuses more on Justice, donor, and sacrifice, things that are existential for humans.

3. You cannot separate anything ( knowledge ) from contact with the ground. And, contact with the real world is done by having skin in the game i.e by having exposure to the real world and paying the price for the consequences, good or bad..

4. Greek gave the word to this “ pathemata mathemata that stands for guide your learning through pain.

5. The principle of intervention is - first do no harm ( premium non nicer)., those who don’t risk should never be involved in making decisions.

6. We have always been crazy but weren’t skilled enough to destroy the world. Now we can.

7. The idea of skin in the game is woven in the history because historically societies are run by risk takers and not risk transferors. The Prominent people became prominent because they took more risk.

8. Take an example of any leader- from Julian the Apostate to Alexander Napoleon or Caesar. ( Think of today’s leaders too- In Indian context- Narendra Modi Now PM of India took the most significant risk and won )

9. Bureaucracy is a construction by which a person is conveniently separated from the consequence of his or her actions.

10. Decentralization is based on simple notion that it is easier to macro bullshit than micro bullshit.

11. Academics know practically nothing about risk and hence its filled with people who can do macro BS

12. For a system to survive, it has to decentralize and distribute responsibility, if it does not do, it will happen itself, the hard way. If a system does not have the skin in the game, it will blow up and self-repair. ( Take the case of 2008 bank blow-ups)

13. When there is risk involved i.e SITG everyone learns. However, some people ( bureaucrats, interventionists etc) never learn because they lack SITG. Now one may argue that they can understand, but You can never fully convince someone that he is wrong, only reality can.

14. The curse of modernity is that we are increasingly populated by a class of people who are better at explaining than understanding.

15. There is no evolution without SITG. And so for a system to survive, the system learns by removing parts, i.e via negative. The experience of person vs the experience of the system is vastly different.

16. A person experience by selecting what’s to be done in a particular instance ( if similar things repeats itself ) but systems learn by filtering. Recall that it is at the foundation of evolution that systems get smart by elimination.

17. How Moral symmetry evolved-
1. Hammurabi/ Lex Talionis rule- An eye for an eye a tooth for a tooth.
2. 15th Low of Holiness of justice- Love your neighbor as yourself
3. Golden Rule- Do unto others as you would have them do unto you. Ex: Treat your parents

17. the way you want your children to treat them.Or I go to other people’s funerals so they come to mine.
4. The formula for the universal law- Act only in accordance with the maximum through which you can at the same time will that it will become a universal law.

18. Present rule- Start being nice to every person you meet. But if someone tries to exercise power over you, exercise power over them.

19.Stop taking advice from someone who gives advice for a living unless there is a penalty for their advice.

20. The game is not to win an argument, but to win. We are much better at doing than understanding, you may not know in your mind where you are going, but you know it by doing.

21. People explanations for what they do are just words, stories they tell themselves, not exactly what they do. What they do, on the other hand, is measurable and that’s what we should focus on. The larger truth is- survival talks and bullshit walks.

22. So what is suggested is- those who talk should do and only those who do should talk.Ex:why people who give lectures to large audiences are uncomfortable on stage.reason: stage light beaming in our eyes hinders our concentration ( that’s why police interrogations used a beam)

23.
Problem is those who lecture have no experience of light, and engineers who ensure lighting on stage has no clue of what it is to lecture in front of a large audience. #LackofSITG

24. If your motivation comes from thrills and taking a risk in the market, but not from curiosity or philosophy, then you are fake. In fact, Non-SITG people don’t get Simplicity, Why?

25. Because when you are rewarded for perception and not results, you need to show sophistication. That's why things designed by people without SITG tend to become complex. ( before they collapse)

26. Compendiaria res improbities, virtusque tarda- The villainous take the short road, virtue the longer one. Artisans have their soul in the game because they do things first for existential reasons, financial and commercial second.

27. If you want to select a book to read- put the first filter whether it is written by the doer or by the observer. Reading books from people who have skin in the game is by far valuable than other.

28. People fail to realize a principle thing that they can learn from a professor how to be a professor, and the chief thing you can learn from an inspirational coach is how to be an inspirational coach. Why- because they almost don’t get it ( actually they never get it )

29. Beware of the person who gives advice, that a certain action on your part is good for you and also good for him, while the harm to you doesn’t necessarily affect him. The moment someone starts sounding as it is good for me ( read you) smell the rat

30. History- has it that it turns out always that what is presented as good for you is not really good for you but certainly is good for the other party.

31. Laws come and go but ethics stay. That's why no person in the transaction should have the certainty of the output while the other have uncertainty. Ex: if a man knowingly offers for sale of wine that is spoiling, ought he tell the customers?

32. Genes vs Languages: Genes follow Majority rule, Language follows minority rule. Because of language travel, Genes not so much.

33. The market is like a large movie theatre with a small door. The way you can identify a sucker is to know if he focuses on the size of the theatre than the size of the door.

34. Dependability is a driver behind many transactions. People who are employees like a special kind of envelope at the end of every month. Take that away and they will act like a baby deprived of milk.

35. On the other hand, there is a traders expression- Never buy when you can rent the three F’s- What you Float. What you Fly and What you F….* Yet many people buy Big cars/ Yacht and end up stuck with that F..

36. Freedom is never free. Story: dog boast to the wolf of all his comfort, of food and luxury he gets prompting the wolf to enlist. Until the Wolf asks about the collar and it is terrified when it understands its use. Wolf Says- of all your meals- I want nothing.

37. A dog’s life may appear smooth and secure but in the absence of an owner, a dog cannot survive. CASE: Employees abandoned by their employers - as in case of IBM story- cannot bounce back.

38. Loss aversion principle: What matters isn’t what a person has or doesn’t have, it is what he or she is afraid of losing. So, people whose survival depends on qualitative job assessments by someone of higher rank in an organization cannot be trusted for critical decisions.

39. The problem is never the problem. It is how people handle it. Anything that’s smacks of competition destroys knowledge.

40. The illusion that business and scientist must be rewarded in a similar way is wrong. Businessmen are motivated and rewarded by profits, that does not mean scientist should be motivated and rewarded by donors and recognition.

41. Why? Because science follows Minority rule, a few will run it, most will become just back-office clerks

42. Grandparents wisdom
1. Cognitive dissonance- In order to avoid inconsistent beliefs, people rationalize it i.e Grapes that they can’t reach got to be sour.
2. Loss Aversion:A loss is more painful than a gain is pleasant. i.e men feel the good less intensely than they feel bad

42. Grandparents wisdom
3. Negative advice: We know the bad/wrong better than what’s right.
4. Skin in the Game: You can’t chew with someone else teeth.
5. Anti-fragility: When our souls are mollified, a bee can sting.

42. Grandparents wisdom
6. Time discounting: a Bird in the hand is better than ten in the tree.
7. The madness of crowd: Madness is rare in individuals but in a group, parties, nations, its a rule.
8. Less is More: Truth is lost with too much altercation

42. Grandparents wisdom
9. Overconfidence: I lost money due to my excessive confidence.
10. The paradox of choices/ progress: To what end are you going into such an enterprise

43. The best actor in the world are those whom no one realizes as an actor. In any type of activity or business divorced from the direct filter of SITG d great majority of people know d jargon, play the part, are intimate with the cosmetic details, but are clueless of the subject

44. What looks scientific is not science but scientism. Real gyms don’t look like gyms, Real universities don’t really look like universities.

45. Virtue is what you do when nobody is watching. Have the guts to be unpopular and why meetings breed more meetings. Because Courage is the only virtue you cannot fake. Ex: when you join a startup you require courage.

46. If you want Peace, let the people trade. They will eventually figure out a way to peace. Ex: Countries who have a long history of trading, rarely go to wars with each other.

47. History is largely peace punctuated by wars, rather than wars punctuated by peace. Problem is due to availability heuristic, we tend to mistake that history is filled with wars.

48. Different people certainly mean different things when they say religion. For early jews and Muslims, religion was Law. Din, means law in Hebrew and religion in Arabic.

49. For early Jews, religion was also tribal, for early Muslims, it was universal. For Romans, it was social events, rituals, festivals

50. Today: For Jews, religion has become ethnocultural, without Law. For Americans, Syriacs, Chaldeans, Copts, and Maronites it is the same with an extension from Ethnocultural to a nation.

51. For Orthodox and Catholic Christians, religion is largely aesthetics pomp and rituals. For Protestants, religion is belief without aesthetics, Pomp and or law.

52. In the east, for Buddhist, Shintoist, and Hindus, religion is a practical and spiritual philosophy, with a code of ethics.

53. To bring the Skin in the Game, every religion incorporated Sacrifice as part of its culture. So basically, every religion believe- Love without sacrifice is theft. Applies to any form of love, even the love of god.

54. This led world to 2 types: 1.Priests: Atheist in actions, religious in words ( most orthodox and Catholic Christians- If the pope gets hurt, he will first rush to the hospital. 2. Terrorists: Religious in actions, religious in words ( Salafi Islamist and suicide bombers)

55. Survival comes first, truth, understanding, and science later.

56. You don’t need marketing to build a company but you need a company to do marketing.

57. Hobbes: Premum vivere, diede philosopher ( First live then philosophize)

58. Warrant buffet truism: To make money you must first survive.

59. Judging people by their beliefs is not scientific.

60. There is no such thing as the rationality of a belief, there is rationality of action.

61. The rationality of an action can be judged only in terms of evolutionary considerations

62. Not everything that happens, happens for a reason, but everything that survives, survives for a reason.

63. Never cross a river if its average depth is 4 Ft.

64. Courage is when you sacrifice your own well being for the sake of a layer above you

65. Learning from Warren Buffet: he did not make millions by cost-benefit analysis, but by simply establishing a higher filter, then picking an opportunity that passes that higher threshold.

66. The difference between successful people and really successful people is that really successful person say no to a lot of things- almost everything.

67. On Risk: One may be risk loving yet completely averse to ruin.

68. Every single risk you take adds up to reduce your life expectancy

69. Rationality is avoidance of systematic ruin.

70. When Hair is black- heed the reasoning, ignore the conclusion. When hair is gray, consider both reasoning and conclusion, when hair is white skip the reasoning but mind the conclusion.

71. Sins to remember 1/5: No muscles without strength, friendship without trust, opinion without consequence, change without aesthetics, age without values, life without effort, water without thirst,

72. Sins to remember 2/5: No food without nourishment, love without sacrifice, power without fairness, facts without rigor, statistics without logic, mathematics without proof, teaching without experience

73. Sins to remember 3/5: No politeness without warmth, values without embodiment, degrees without eradication, militarism without fortitude, progress without civilizations, friendship without investments,

74.Sins to remember 4/5: virtue without risk, probability without ergo city, wealth without exposure, complication without depth, fluency without consent, a decision without asymmetry, science without skepticism,

75. Sins to remember 5/5: religion without tolerance and above all nothing without skin in the game