Skin in the Game
Hidden Asymmetries in Daily Life
Editorial Review
The phrase “skin in the game” is one we have often heard but rarely stopped to dissect truly. It is the backbone of risk management, and it’s also an astonishingly rich worldview that, as Taleb shows in this book, applies to all aspects of our lives. In his most provocative and practical book yet ,one of the foremost thinkers of our time redefines what it means to understand the world, succeed in a profession, contribute to a fair and just society, detect nonsense, and influence others. He shows how the willingness to accept one’s own risks is an essential attribute of heroes, saints, and flourishing people from all walks of life.
Book Reviews
Books on Related Topics
A black swan is a highly improbable event with three principal characteristics: It is unpredictable; it carries a massive impact; and, after the fact, we concoct an explanation that makes it appear less random, and more predictable, than it was. The astonishing success of Google was a black swan; so was 9/11.
Any chief executive whose ship is sinking, with the lights dimming and music fading, is likely to ask, “How did this happen? How did I allow myself and my company to end up like this?” Directors of once great companies also find themselves asking similar questions. “Did I and my fellow
Wind extinguishes a candle and energizes fire Likewise with randomness, uncertainty, chaos: you want to use them, not hide from them. You want to be the fire and wish for the wind. This summarizes the author’s nonmeek attitude to randomness and uncertainty. We just don’t want to just survive uncertainty, or to
Wisdom to Share
We can’t separate knowledge (or anything) from contact with the ground, and the contact with the real world is done via skin in the game—taking risks and having exposure to the world, and paying a price for its consequences, good or bad.
Skin in the game is an overall necessity; however, we can’t get carried away with it. We can’t apply it to every detail in sight in its every detail particularly when consequences are contained.
The “public good” is something abstract, taken out of a textbook. We exercise our ethical rules but there’s a limit—from scaling—beyond which the rules cease to apply.
All it takes is a stubborn minority group—with significant skin in the game—for the entire population to have to submit to their preferences. In fact, the entire growth of society—whether economic, moral, or otherwise—comes from a small number of people.
Science isn’t the sum of what scientists think (the majority); it is a procedure that’s highly skewed. Once you debunk something, it’s now wrong. Had science operated by majority consensus, we would still be stuck in the Middle Ages.
The minority rule shows us how a small percentage of stubborn virtuous people—with skin in the game in the form of courage—can drive society to function properly.
The best slave is someone you overpay and who knows it; so they’re always terrified of losing their status. For example, multinational companies created the expat statue, in which they pay their diplomats an enormous amount of money so they would represent the firm abroad. The employees get addicted to the high living standards, so they never disobey.
Anyone who has submitted a “scholarly” paper to a journal knows that they usually raise the odds of acceptance by making it more complicated than necessary; so it would look like science when it’s scientism.
When someone “looks the part,” it doesn’t mean they’re competent enough to “do the part.” Always remember that intellect shouldn’t look intellectual and science shouldn’t look like science. Time and survival are the only fair judges.
Skin in the game is mostly about justice, honor, and sacrifice. Applied as a rule, it reduces the effect of the following divergences that grew with civilizations: those between actions and cheap talks, consequences and intention, practice and theory, honor and reputation, expertise and charlatanism, concrete and abstract, ethical and legal, genuine and cosmetic, science and scientism, quality and advertising, commitment and signaling, and centrally, collective and individual.
Books by the same Author
A black swan is a highly improbable event with three principal characteristics: It is unpredictable; it carries a massive impact; and, after the fact, we concoct an explanation that makes it appear less random, and more predictable, than it was. The astonishing success of Google was a black swan; so was 9/11.
Wind extinguishes a candle and energizes fire Likewise with randomness, uncertainty, chaos: you want to use them, not hide from them. You want to be the fire and wish for the wind. This summarizes the author’s nonmeek attitude to randomness and uncertainty. We just don’t want to just survive uncertainty, or to
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