Skin in the Game: What I Learned

Nassim Nicholas Taleb is a trader, mathematician, author, and most importantly a deadlifter whom I have followed for over a year. His is one of the most enjoyable accounts on Twitter owing to his off-the-cuff, unapologetic, and honest assessments. In his series Incerto, Taleb has examined randomness, risk, fragility, and how we restrict our thinking by following the herd into what is currently in vogue:  scientism, interventionism, fat-less diets, the Bell Curve.

I read the terrific Black Swan last year, and couldn't help pre-ordering his latest book: Skin in the Game. I started reading in July and read a few pages every week while I waited for my laundry; now that I am on break, I have had the time to devote a few hours uninterrupted for a couple days. Skin in the Game posits that the collective has  been governed by the Greek phrase pathemata mathemata, by the story of Antaeus who was brought down when he lost contact with the Earth, by heads of nations who wrought war but also led their armies from the front and hence faced the greatest risk for their actions. However, there is an increasing significant class of elites in today's society who are removed from the consequences of their decisions. This class includes politicians, journalists, malpracticing scientists, and the IYI.

The following is not a review of the book, but a collection of (nontechnical) quotes that matter to encapsulate what I learned.

Historically, all warlords and warmongers were warriors themselves, and, with a few curious exceptions, societies were run by risk takers, not risk transferors … The very status of a lord has been traditionally derived from protecting others, trading personal risk for prominence.
The curse of modernity is that we are increasingly populated by a class of people who are better at explaining than understanding.
Skin in the game keeps human hubris in check.
Using mathematics when it's not needed is not science but scientism. Replacing your well-functioning hand with something more technological … is not more scientific. Replacing the "natural" … processes that have survived trillions of high-dimensional stressors with something in a "peer-reviewed" journal that may not survive replication or statistical scrutiny is neither science nor good practice.
Things designed by people without skin in the game tend to grow in complication … when you are rewarded for perception, not results, you need to show sophistication.
When I don't have skin in the game, I am usually dumb. My knowledge of technical matters, such as risk and probability, did not initially come from books. It did not come from lofty philosophizing and scientific hunger. It did not event come from curiosity. It came from the thrills and hormonal flush one gets while taking risks in the markets.
If you can't effectively sue, regulate.
There is another dimension of honor: engaging in actions going beyond mere skin in the game to put oneself at risk for others, have your skin in other people's game; sacrifice something significant for the sake of the collective.
Beware of the person who gives advice, telling you that a certain action on your part is "good for you" while it is also good for him, while the harm to you doesn't directly affect him.
A doctor is pushed by the system to transfer risk from himself to you, and from the present into the future
What matters isn't what a person has or doesn't have; it is what he or she is afraid of losing.
He [Christ] was a risk taker...he sacrificed himself for the sake of others. A god stripped of humanity cannot have skin in the game in such a manner, cannot really suffer.
Static inequality is a snapshot view of inequality; it does not reflect what will happen to you in the course of your life … The way to make society more equal is by forcing (through skin in the game) the rich to be subjected to the risk of exiting from the 1 percent.
As with all communist movements, it is often the bourgeois or the clerical classes who are the early adopters of revolutionary theories. So class envy doesn't originate from a truck driver in South Alabama, but from a New York or Washington, D.C., Ivy League-educated IYI with a sense of entitlement, upset some "less smart" persons are much richer.
Someone with a high public presence who is controversial and takes risks for his opinions is less likely to be a bulls***t vendor.
It is immoral to be in opposition to the market system and not live in a hut or isolated from it. It is much more immoral to claim virtue without fully living with its direct consequences.
If your private life conflicts with your intellectual opinion, it cancels your intellectual ideas, not your private life. If your private actions do not generalize, then you cannot have general ideas.
The notion of belief without sacrifice, which is tangible proof, is new in history. The strength of a creed did not rest on "evidence" of the powers of its gods, but evidence of the skin in the game on the part of its worshipers.
Survival comes first, truth, understanding, and science later.
Judging people by their beliefs is not scientific There is no such thing as the "rationality of a belief, there is rationality of action. The rationality of an action can be judged only in terms of evolutionary considerations.
How much you truly "believe" in something can be manifested only through what you are willing to risk for it.
And the best quote of all:
The mere sight of these books reminds me of a lunch with a former member of the Federal Reserve Board, the kind of thing to which one should never be subjected more than once per lifetime.