- Title: Skin in the Game – Hidden Asymmetries in Daily Life
- Author: Nassim N. Taleb
- Publication Date: 2018
- Recommendation Score: 5 / 5
Nassim Taleb is a non-conventional thinker. He is a mathematician and cares a lot about rigor and logic. He is a philosopher and cares about the consequences of theory on people’s life. This is reflected in his writings when theory (science) and practice (real life) are intertwined.
“Skin in the Game” is the 5th book in Nassim Taleb’s Incerto series. It deals with asymmetries in daily life (decision-making, risk management, politics, religion, etc.). This post summarizes some of the ideas of the book.
Ethics and Competence
In the introduction, the author focuses on the idea that one cannot disentangle ethics and competence when dealing with human beings. What does it mean that you trust a professional? Do you trust their knowledge and skills? Or their ethics and moral values? Or both?
Some people have skin in the game, such as citizens, merchants, businessmen, entrepreneurs, artisans, etc. Others have no skin in the game such as bureaucrats, administrators, policy wonks, consultants, etc.
No-skin-in-the-game people keep the upside and transfer the downside to others. Skin-in-the-game people, on the other hand, take their own risk and keep their own downside.
Avoid taking advice from someone who gives advice for a living, unless there is a penalty for their advice.
The golden rule vs the silver rule
The golden rule is: Treat others the way you would like them to treat you. The author argues that the following silver rule is more robust: Do not treat others the way you would not like them to treat you.
The Hammurabi code of laws and “skin in the game”
Taleb evokes Hammurabi’s law as an early example of skin in the game: “If a builder builds a house and the house collapses and causes the death of the owner of the house—the builder shall be put to death.”.
Those who talk should do and only those who do should talk.
The book is absolutely worth reading. This is how the author ends it:
So let me finish this book with a (long) maxim, via negativa style:
No muscles without strength,
friendship without trust,
opinion without consequence,
change without aesthetics,
age without values,
life without effort,
water without thirst,
food without nourishment,
love without sacrifice,
power without fairness,
facts without rigor,
statistics without logic,
mathematics without proof,
teaching without experience,
politeness without warmth,
values without embodiment,
degrees without erudition,
militarism without fortitude,
progress without civilization,
friendship without investment,
virtue without risk,
probability without ergodicity,
wealth without exposure,
complication without depth,
fluency without content,
decision without asymmetry,
science without skepticism,
religion without tolerance,
and, most of all:
nothing without skin in the game.