Skin In The Game: Hidden Asymmetries In Daily Life
By: Nassim Taleb
Random House (February 27, 2018)
Skin In The Game is a book about consequences. See, people make decisions in a certain way when their choices impact everyone else. But when they have Skin In the Game it all changes. This book argues we should be trusting fewer people, in every part of our lives, that make decisions without recourse. For example: Don’t ask a Portfolio Manager/ Economist what they think about a particular investment. Ask them what they are buying and why. Ask them what they are selling and why. Get it?
Two of my favorite quotes:
Now, if you are going to highlight only one single section from this book, here is the one. The interventionista case is central to our story because it shows how absence of skin in the game has both ethical and epistemological effects (i.e., related to knowledge). We saw that interventionistas don’t learn because they are not the victims of their mistakes, and, as we hinted at with pathemata mathemata: The same mechanism of transferring risk also impedes learning. More practically, You will never fully convince someone that he is wrong; only reality can. Actually, to be precise, reality doesn’t care about winning arguments: survival is what matters. For 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.
My lifetime motto is that mathematicians think in (well, precisely defined and mapped) objects and relations, jurists and legal thinkers in constructs, logicians in maximally abstracted operators, and…fools in words. Two people can be using the same word, meaning different things, yet continue the conversation, which is fine for coffee, but not when making decisions, particularly policy decisions affecting others. But it is easy to trip them, as Socrates did, simply by asking them what they think they mean by what they said-hence philosophy was born as rigor in discourse and disentanglement of mixed-up notions, in precise opposition to the sophist’s promotion of rhetoric.