Skin In The Game

 

The basic premise of the book is that one should not believe the opinions or forecasts of others unless they have some "skin in the game." Results are all that count—opinions and talk are worthless. It is so easy for people to utter nonsense, so unless they could potentially suffer the consequences of being wrong, you should ignore them. This is especially true for intellectuals in academia. However, "hard" science seems immune to this problem because of the redeeming nature of falsification, while "scientism—the excessive belief in science—is worthless.

As always both accessible and iconoclastic, Taleb challenges long-held beliefs about the values of those who spearhead military interventions, make financial investments, and propagate religious faiths. Among his insights:

• For social justice, focus on symmetry and risk sharing. You cannot make profits and transfer the risks to others, as bankers and large corporations do. You cannot get rich without owning your own risk and paying for your own losses. Forcing skin in the game corrects this asymmetry better than thousands of laws and regulations.
• Ethical rules aren’t universal. You’re part of a group larger than you, but it’s still smaller than humanity in general.
• Minorities, not majorities, run the world. The world is not run by consensus but by stubborn minorities imposing their tastes and ethics on others.
• You can be an intellectual yet still be an idiot. “Educated philistines” have been wrong on everything from Stalinism to Iraq to low-carb diets.
• Beware of complicated solutions (that someone was paid to find). A simple barbell can build muscle better than expensive new machines.
• True religion is commitment, not just faith. How much you believe in something is manifested only by what you’re willing to risk for it.

The phrase “skin in the game” is one we have often heard but rarely stopped to truly dissect. It is the backbone of risk management, but it’s also an astonishingly rich worldview that, as Taleb shows in this book, applies to all aspects of our lives. As Taleb says, “The symmetry of skin in the game is a simple rule that’s necessary for fairness and justice, and the ultimate BS-buster,” and “Never trust anyone who doesn’t have skin in the game. Without it, fools and crooks will benefit, and their mistakes will never come back to haunt them.”

You can't chew with somebody else's teeth, and your fingernails can best scratch your itch, and there is nothing without skin in the game.

The author has beautifully summarised the book with a long maxim. 

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.