His own gloss
What do I mean by Skin in the Game? My Own Version – INCERTO – Medium
When selecting a surgeon for your next brain procedure, should you pick a surgeon who looks like a butcher or one who looks like a surgeon? The logic of skin in the game implies you need to select the one who (while credentialed) looks the least like what you would expect from a surgeon, or, rather, the Hollywood version of a surgeon.
the central attribute is symmetry: the balancing of incentives and disincentives, people should also penalized if something for which they are responsible goes wrong and hurts others: he or she who wants a share of the benefits needs to also share some of the risks.
My argument is that there is a more essential aspect: filtering and the facilitation of evolution. Skin in the game –as a filter –is the central pillar for the organic functioning of systems, whether humans or natural.
Systems don’t learn because people learn individually –that’s the myth of modernity. Systems learn at the collective level by the mechanism of selection: by eliminating those elements that reduce the fitness of the whole, provided these have skin in the game.
scholars who do not have skin in the game fail to get that while in academia there is no difference between academia and the real world, in the real world, there is. They teach evolution in the classrooms but, because they are not doers, they don’t believe that evolution applies to them; they almost unanimously vote in favor of a large state and advocate what I’ve called “Soviet-Harvard top-down intelligent design” in social life. (Authoritarian High Modernism)
selection pressures from skin in the game apply to perhaps 99% of the population. But it is hard to tell if macroeconomists, behavioral economists, psychologists, political “scientists” and commentators, and think-tank policymakers are experts. Bureaucrato-academics tend to be judged by other bureaucrats and academics, not by the selection pressure of reality.
Skin in the Game by Nassim Nicholas Taleb – digested read
If you take just one thing away from this book, make it this: Big Nick knows best and is doing you a favour by writing it.
This book is 25% probability theory, 25% classical anecdotes, 25% stating the bleeding obvious, and 25% complete bullshit.
Negative review by Aran Joseph Canes:
Most of the ideas in Nassim Nicholas Taleb’s ‘Skin in the Game’ are characterized by a shameless lack of nuance, are supported only by dishonest misrepresentation and overgeneralization of samples, and will probably make the world much worse if implemented
The only other book I can think of which more strongly exemplifies confirmation bias, and which is more blind towards overwhelming contradictory evidence, is Rhonda Byrne’s ‘The Secret’, and parallels between these two books run deep—deep enough to call this ‘Taleb’s The Secret’.
if I am accusing the author of statistical subterfuge, at least one example is in order
with a few curious exceptions, societies were run by risk takers, not transferors
What he is too dishonest to tell you is that in his data on the deaths of Roman emperors, he is actually COMBINING the minority of deaths in battle AND the majority of deaths from covert assassinations, suicides, and post-coup executions into a single unstated category to give it the overall appearance of brave warriors with SITG
there you have it. Only 17% of all the deaths of Roman emperors took place while fighting alongside their soldiers on a battlefield
Secondly, there’s ANOTHER weasel word in that quote. Without specifying what “really old age” is, Taleb says of Roman emperors who died naturally that “only few of these died of really old age.”
Finally, and most importantly, there’s a good reason why high-ranking commanders of modern armies, the “decision-makers,” are precluded from joining their armies on the battlefield regardless of how good their plans are
So in summary, the fact that SOME historical commanders had skin in the battle was actually a reckless error that has been fixed by modern armies. But that is exactly the kind of backwardness Taleb fantasizes about returning the world to
Anyway, to get on with the meat of the book: SITG
there are not two but four combinations of idea-consequence scenarios that can be neatly represented as below
1 and 3 are SITG scenarios; 2 and 4, not
Recall that there are two kinds of non-SITG scenarios, and if applied to the wrong one, Taleb’s model harms the system more than it rehabilitates it.
Taleb maintains that SITG and conflict of interest should not be conflated, but he fails to grasp that if, as he demands, politicians were to have their SITG, it would INEVITABLY lead to conflict of interest as a nasty side-effect
NOT having any SITG game lets you think objectively about a situation in a way that having your skin at stake hardly can
But the point is, both SITG and no SITG have their place; it’s a matter of what works better given the context. Sadly, such nuanced analysis is unapologetically foreign to Taleb’s simplistic methods
Coming to the second recurring theme in the book, the Lindy effect: Here, Taleb’s loose grasp of reality takes on a life of its own. In essence, it states that the projected lifespan of non-perishable cultural entities is in direct correlation with its current age. If a book has survived for 100 years in print, it will likely survive another 100.
Lindy is indeed good at eliminating some bad cultural objects from the past. But since Taleb is fond of saying “Lindy and Lindy alone is the real expert,” I think Lindy’s consistency is worth examining. Is Lindy only FREQUENTLY or ALWAYS effective? The difference matters.
When Lindy cannot even eliminate fraud in simple systems like detecting the success of a miraculous cure for cancer, to expect it to arrive at reliable heuristics in complex systems in the form of time-tested aphorisms is naïve wishful thinking. Aphorisms survive because of their rhetorical effect, not necessarily because they are agents of truth. Only by woefully cherry-picking them can you present them in a positive light. Superstitions survive for thousands of years, and horrible myths that are demonstrably untrue are inherited through generations of descendants, completely unfiltered by Lindy.
Page after page of this book is filled with vignettes from classical literature, to give it the feel of Lindyness. It never ceases to amuse me how Taleb combs through historical mythologies to find stories that vaguely metaphorically resemble an agenda he has already made up his mind about
In the philosophy of science, consilience is a method of converging on the truth through multiple, independent sources of evidence that are themselves imperfect and prone to errors
In consilience, Lindy can act as ONE of these independent sources, rather than replacing other sources. But by clownishly interjecting that “Lindy alone is the real expert,” Taleb only makes the cavernous depths of his ignorance official.
Murray Gell-Mann, Nobel Laureate physicist, is rightly praised in this book. Gell-Mann wrote an influential non-fiction book called The Quark and the Jaguar, which contains illuminating discussions on simple and complex systems. Now, Taleb likes to mouth off that climate change is a non-linear, complex system and therefore we cannot, as climate scientists often do, predict the future trajectory of climate change with sufficient confidence. But here let me quote an excerpt from a 2011 interview with Gell-Mann precisely on this topic, which can be viewed on YouTube under the title ‘A chat on climate literacy with Murray Gell-Mann’. Gell-Mann’s answer is seething with righteous condescension, as he expresses these words with a look of incomprehension towards people who misguide the public on the predictability of climate change.
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