Tuesday 24 July 2018

Skin in the Game by Nassim Nicholas Taleb

In Skin in the Game, Nassim Nicholas Taleb advocates that you should never take advice from anyone who doesn't have a similar risk symmetry as you - i.e. they must win if you win and lose if you lose, preferably to the exact degree. Here's a summary of issues covered from the blurb:

 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.

I've read a few of Taleb's earlier works, The Black Swan being the most recent. As with that book, this one, and the issues it covered caused me to think about these things in a different way - which is the point, I suppose. However, my initial thoughts while reading were that: 

a) The writing style is aggressive, antagonistic and arrogant - far more so than his other works;
b) He is extremely dismissive of arguments and people he considers to be idiotic; and
c) There is not a great deal of structure to the book, the arguments and the thoughts expressed.

I've avoided reviewing this book for a while, wondering if I should re-read the whole book before I make comments, but I'm not doing that yet. And I suppose it is that very desire for a re-read before being overly critical that makes me realise that Taleb didn't pay his fellow authors/speakers the same degree of respect. At the very least, he owes it to his audience to disagree in a way that is easy to understand, and that does more than simply berate his contemporaries.

I also felt that the title lends itself to the exploration, in a far more nuanced way of what skin  in the game can involve, and I felt a little disappointed that this wasn't done.

Nevertheless, I enjoyed thinking through some of these issues,  and no doubt I'll return to this for a more critical read someday.

ISBN: 9780241247471

2 stars

You may also enjoy The Knowledge Illusion by Steven Sloman and Philip Fernbach, or Superforecasting by Philip E Fetlock.

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