In practice, there is.
Academics lecturing traders on how to run their business is like nuns lecturing prostitutes on how to run theirs.
It's two different worlds.
There are 2 kinds of professions. Those where the experts have no clue what they're talking about, & those where they do.
The "Expert Problem" doesn't exist in industries like weather forecasting. If you repeatedly fail predict the weather, you don't last.
Industries where you're only judged by peers (academia, journalism, restaurants) will rot.
In business, you don't want to impress your peers. The only person you want to impress is your accountant.
👩🔧 Plumbing and 🦷 Dentistry are similar:
And if you show up to the dentists's office with your teeth intact, but leave with half of them missing, it's easy to judge competence.
Because journalists simply try to impress other journalists. They don't work for the reader.
So they become a monoculture that's very vulnerable.
They have no accountability to reality, only each other. And their business is doomed.
@paulkrugman should be replaced w/ Miss Bri, a psychic from the Lower East Side.
If Krugman had a P&L, he'd already be bust.
When you have a P&L, you can't BS your way through life
Pilots have skin in the game. The bad pilots are all under water. Dead.
There’s a selection mechanism that doesn’t depend on the judgement of other pilots.
If the architect builds a house, and it collapses, the architect shall be put to death.
You cannot hide risk then walk way.
Bob Rubin collected $120mm in salary while chairman of Citigroup.
There, he stuffed the bank for of industrial grade hidden risk. There was no edge to the trades, they just blew up infrequently.
Bob Rubin did not show up with his checkbook, to make things right. He simply resigned.
And yet, bankers are still rich. They know how to hide and socialize their losses.
I could force you to eat Lebanese food just because I liked it.
The Silver Rule is more robust. Don't do unto others what you don't want them to do unto you.
The intellectually honest way to do internet censorship, is to build the censorship mechanism, then hand it to your enemy.
If you're not willing to do that, then you're just saying that you want to be in charge.
Being a "Lord" meant you assumed an obligation to protect your people in exchange for high status.
Skin in the Game.
But if you want to cause people to die, you should be exposed to it. It's the natural balance of society.
But risk taking is real. You cannot fake risk-taking. The essence of Skin in the Game.
There's no virtue without risk.
Any virtue that doesn't entail some kind of sacrifice or cost isn't a virtue at all.
When a hotel asks you to "save the planet" by reducing water consumption...
Are you saving the planet? Or saving their bottom line?
A failed entrepreneur is more honorable than someone who's never been an entrepreneur.
"Come back with your shield, or on it."
We're measuring it statically, not dynamically.
If you compare the Forbes list from 1982 to today, there's less than 10% overlap in names.
60% of Americans spend 1 year in the top 10%.
12% spend 1 year in the top 1%
People are upset by a rent seeking, bloodsucking CEO making 50x what a worker makes.
But they're never upset by Steve Jobs, who had skin in the game.
The average lifespan in the S&P 500 is 11 years. That's down from 60 years.
And their Price / Earnings ratios are higher.
We live in Extremistan.
You're in the hospital for brain surgery. Do you choose a Dr. who looks like a Hollywood Actor, or who looks like a butcher?
From a random population sample? Pick Hollywood. In the hospital? Pick the butcher. He's overcome bias his whole career.
Good asymmetry is a call option.
If you'll make more in the upside than you lose in a downside, you'll do very well, provided you survive.
Falling 100 meters off a ledge is more than 100x as harmful as falling 1 meter off a ledge 100 times.
The discovery that if a broadway play survives for 200 days, it will survive for 200 more.
Government issued currencies have never been Lindy. History tells us that.
This is why there were money changers in the temple during the days of Christ.
Religions were no fools. They wanted the hardest, soundest money possible
Less than 0.3% of juice drinkers are kosher. But 100% of juice is kosher.
A non-kosher person will drink a kosher drink, but a kosher person will never drink a non-kosher drink.
The intolerant minority rules the world.
If Bernie voters stay home when their candidate isn't elected, then the world is structured around the preferences of intransigent minorities.
In modernity, we may have to do the opposite.
No matter how many white swans you see, you can never disprove the existence of black swans.
But there's asymmetry. if you see just one black swan, you prove its existence.
No evidence of cancer is not evidence of "No Cancer"
Science is a process, not a result.
Science is minority rule. Even if 300 Nobel Prize winners agree on something, one experiment can prove them wrong.
Sequence matters. If you wash your pants, then dry them, then wear them you get different results than if dry your pants, then wash them, then wear them.
Don't get soaked.
You only understand this if you are math wiz (no one is) or if you have skin in the game.
Because you can’t say “I’m going to blow up and then get rich.” you get rich, then blow up. Sequence matters.
No matter how much you value your life, A is Rational. B is not.
Trading wisdom: Take all the risk you can, but make sure you’re in tomorrow.
1) Things change with scale. Singapore is not a small China. A big blowup is worse than many small blowups.
2) In the dynamic, changing (real) world, your "rational" strategies are completely different than in static one.
We live in a world of uncertainty. And the more uncertainty there is in the the system, the more paranoid we have to be.