Skin in the game is a book written by Nassim
Taleb.
It highlights points from author’s previous
books and introduces some new concepts.
First, and most important one is included
in the title.
To have skin in the game is to have a stake
in the outcome.
Nassim decided to look at inequalities in
our world.
He describes situations where journalists
and academics used wrong models, unapplicable
to the given problem.
He calls such people virtue merchandisers
- hypocrites who tell you to do something
when they have nothing at stake.
He argues that you should listen to businessmen
and investors instead - people who operate
with their own money, and who, in case of
a mistake, would lose their status and credibility.
We live in a complex world, and heuristics
let us survive and navigate, but there are
many mistakes that go with using them.
The author points out that the society cultivated
a group called Intellectuals Yet Idiots, for
example professors who have never worked outside
of university, and who monopolized position
for authority.
We give them every right to make decisions
and intervene in complex fields, without even
checking their knowledge in the subject.
They are isolated from the outcome of their
decisions, so they don’t have to think about
cascading impact, they can just rely on scientific
models.
In consequence, they do not learn from their
mistakes, which sooner or later leads to cause
major problems.
A great example is the 2008 economy crash.
Most economists focused on models they used
before, claiming that it is the world that
did something wrong.
Nassim also brings our attention to ethical
consequences.
When people who have no skin in the game make
decisions for others, even with noble causes
and greatest intention, they often hurt them
more than they help.
They use the Golden Rule saying that you should
“treat others like you would like them to
treat you” when they should use the Silver
Rule asking to “do not do to others, what
you wouldn’t like them to do to you”.
An alternative title for this book, or at
least a great summary could be the following
quote “Avoid taking advice from someone
who gives advice for a living unless there
is a penalty for their advice.”
Taleb writes about some of the most original,
thought-provoking, and profound ideas.
And even if you find yourself disagreeing
with him, he really makes you think.
If you decide to read Taleb’s work, you
should start with “Fooled by Randomness”,
“Black Swan” and “Antifragile”, to
make sure you get 100% from this book.
