Thread by @dunkhippo33

Today’s thread is about the audiobook Skin In the Game by Nassim Taleb

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1) First this is the book:

Skin in the Game: Hidden Asymmetries in Daily Life (Incerto) amazon.com/dp/0425284646

2) I’m sure many of you have seen Taleb’s tweets, so needless to say, I liked some of the smart pts but as expected, he’s mean to a lot of ppl in the book.

This book is also quite disjointed (though that may be the audiobook format) & could’ve been summarized in 20 pages IMO.

3) That aside what is this book about? The premise is that most people who are making decisions don’t have skin in the game and shouldn’t be in power.

4) Backing up, his cites that in ancient history, many leaders had a lot more skin in the game.

It was common for rulers to go on the battlefield w their fellow soldiers. So they had skin in the game for their decisions on war.

5) But these days, many leaders are certainly not on the battlefield when they make such decisions.

So they don’t have any skin in the game and should not be making decisions.

6) He cites other examples - such as in geo-political decisions, you often find that leaders of other nations are making decisions for where other ppl halfway around the world should live. They don’t have skin in the game.

7) Or consultants who propose decisions for companies when they don’t work there nor are incentivized by the outcomes.

8) From gov officials to investors to researchers he shows example after example of how none of these ppl can be trusted because they don’t have anything at stake. (Which I agree w)

That basic pt makes sense and resonates but he spends about 50-100 pages talking about this.

9) He ties all this to how there’s a trickle down affect where if ppl don’t have skin in the game, ultimately the losers in a system may be the end user.

Such as in finance. Such as when researchers publish findings that can’t be repeated.

10) IMO he doesn’t offer practical solutions to these problems (and maybe that’s not the pt of the book) - namely, asking ppl to learn statistics or thinking of their craft as an art and doing that for the love of it rather than short-cutting to make a buck.

11) The most interesting pt of the book IMO is at the very end which is when he talks about how it’s hard to know whether someone says something that’s rational. Rationality has a lot of subjectivity. So he proposes the best way is to see if something withstands the test of time

12) For example, in many cultures ppl don’t eat pork or beef.

You might try to find a reason behind that. E.g. “Group ABC doesn’t eat pork because pigs eat too much trash and are unhealthy and have too many diseases.” (Or whatever)

13) Taleb says don’t try an argument like that. It’s subjective.

Rationality comes from survivability. The fact that billions of ppl don’t eat beef or pork & this tradition has withstood the test of time is what matters. The tradition hasn’t died off so therefore it’s rational.

14) I think that makes sense but I was confused how this relates to skin in the game and waiting a long time for something to prove out is often impractical. 🤷🏻‍♀️

15) Anyway, he has smart things to say but it could’ve been more brief and less disjointed even if you can take the mean-spirited style w a grain of salt.

I’ll probably listen to his other books though.