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Skin in the Game: Hidden Asymmetries in Daily Life (Incerto) by [Nassim Nicholas Taleb]

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Nassim Nicholas Taleb

Skin in the Game: Hidden Asymmetries in Daily Life (Incerto) Kindle Edition

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#1 NEW YORK TIMES BESTSELLER • A bold work from the author of The Black Swan that challenges many of our long-held beliefs about risk and reward, politics and religion, finance and personal responsibility

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. Citing examples ranging from Hammurabi to Seneca, Antaeus the Giant to Donald Trump, Nassim Nicholas Taleb shows how the willingness to accept one’s own risks is an essential attribute of heroes, saints, and flourishing people in all walks of life.

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.”

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You will never fully convince someone that he is wrong; only reality can.
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Bureaucracy is a construction by which a person is conveniently separated from the consequences of his or her actions.
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The curse of modernity is that we are increasingly populated by a class of people who are better at explaining than understanding,
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From the Publisher

Antifragile;Nassim Nicholas Taleb;business;economics;stocks;investments;decision making;leadership


	The Black Swan, Second Edition	Fooled by Randomness	Antifragile	The Bed of Procrustes	Incerto, Deluxe Box Set
	The most influential book of the past seventy-five years: a groundbreaking exploration of everything we know about what we don’t know, now with a new section called “On Robustness and Fragility.”	An investigation about luck–or more precisely, about how we perceive and deal with luck in life and business.	Through deep investigation and insight, Antifragile reveals how to thrive in an uncertain world.	With a rare combination of pointed wit and potent wisdom, Taleb plows through human illusions, contrasting the classical values of courage, elegance, and erudition against the modern diseases of nerdiness, philistinism, and phoniness.	The Incerto Series is an investigation of opacity, luck, uncertainty, probability, human error, risk, and decision making when we don’t understand the world. Makes the perfect gift for the perpetually curious.

Editorial Reviews

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Praise for Nassim Nicholas Taleb

“The problem with Taleb is not that he’s an asshole. He is an asshole. The problem with Taleb is that he is right.”—Dan from Prague, Czech Republic (Twitter)

“The most prophetic voice of all . . . [Taleb is] a genuinely significant philosopher . . . someone who is able to change the way we view the structure of the world through the strength, originality and veracity of his ideas alone.”—John Gray, GQ

“Taleb grabs on to core problems that others ignore, or don’t see, and shakes them like an attack dog on a leg.”—Greg from New York (Twitter)

“For my wife and me, Antifragile is an annual reread.”—Colle from Richmond, Virginia (Twitter)

“I read Antifragile four times. First, to get the wisdom to survive. Second, as a memorial statement for Fat Tony. Third, as Das Kapital with correct mathematics. Fourth, as ethics to learn a good way to die.”—Tamitake from Tokyo, Japan (Twitter)

“November . . . time for my annual reread of Antifragile.”—Johann from Vienna, Austria (Twitter)

“[Taleb writes] in a style that owes as much to Stephen Colbert as it does to Michel de Montaigne.”—The Wall Street Journal

Excerpt. © Reprinted by permission. All rights reserved.

Chapter 1

Why Each One Should Eat His Own Turtles: Equality in Uncertainty

Taste of turtle—Where are the new customers?—Sharia and asymmetry—There are the Swiss, and other people—Rav Safra and the Swiss (but different Swiss)

You who caught the turtles better eat them, goes the ancient adage.

The origin of the expression is as follows. It was said that a group of fishermen caught a large number of turtles. After cooking them, they found out at the communal meal that these sea animals were much less edible than they thought: not many members of the group were willing to eat them. But Mercury happened to be passing by—Mercury was the most multitasking, sort of put-together god, as he was the boss of commerce, abundance, messengers, the underworld, as well as the patron of thieves and brigands and, not surprisingly, luck. The group invited him to join them and offered him the turtles to eat. Detecting that he was only invited to relieve them of the unwanted food, he forced them all to eat the turtles, thus establishing the principle that you need to eat what you feed others.

A Customer Is Born Every Day

I have learned a lesson from my own naive experiences:

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.

Of course such advice is usually unsolicited. The asymmetry is when said advice applies to you but not to him—he may be selling you something, or trying to get you to marry his daughter or hire his son-in-law.

Years ago I received a letter from a lecture agent. His letter was clear; it had about ten questions of the type “Do you have the time to field requests?,” “Can you handle the organization of the trip?” The gist of it was that a lecture agent would make my life better and make room for the pursuit of knowledge or whatever else I was about (a deeper understanding of gardening, stamp collections, Mediterranean genetics, or squid-ink recipes) while the burden of the gritty would fall on someone else. And it wasn’t any lecture agent: only he could do all these things; he reads books and can get in the mind of intellectuals (at the time I didn’t feel insulted by being called an intellectual). As is typical with people who volunteer unsolicited advice, I smelled a rat: at no phase in the discussion did he refrain from letting me know that it was “good for me.”

As a sucker, while I didn’t buy into the argument, I ended up doing business with him, letting him handle a booking in the foreign country where he was based. Things went fine until, six years later, I received a letter from the tax authorities of that country. I immediately contacted him to wonder if similar U.S. citizens he had hired incurred such tax conflict, or if he had heard of similar situations. His reply was immediate and curt: “I am not your tax attorney”—volunteering no information as to whether other U.S. customers who hired him because it was “good for them” encountered such a problem.

Indeed, in the dozen or so cases I can pull from memory, it always turns out that what is presented as good for you is not really good for you but certainly good for the other party. As a trader, you learn to identify and deal with upright people, those who inform you that they have something to sell, by explaining that the transaction arises for their own benefit, with such questions as “Do you have an ax?” (meaning an inquiry whether you have a certain interest). Avoid at all costs those who call you to tout a certain product disguised with advice. In fact the story of the turtle is the archetype of the history of transactions between mortals.

I worked once for a U.S. investment bank, one of the prestigious variety, called “white shoe” because the partners were members of hard-to-join golf clubs for proto-aristocrats where they played the game wearing white footwear. As with all such firms, an image of ethics and professionalism was cultivated, emphasized, and protected. But the job of the salespeople (actually, salesmen) on days when they wore black shoes was to “unload” inventory with which traders were “stuffed,” that is, securities they had in excess in their books and needed to get rid of to lower their risk profile. Selling to other dealers was out of the question as professional traders, typically non-golfers, would smell excess inventory and cause the price to drop. So they needed to sell to some client, on what is called the “buy side.” Some traders paid the sales force with (percentage) “points,” a variable compensation that increased with our eagerness to part with securities. Salesmen took clients out to dinner, bought them expensive wine (often, ostensibly the highest on the menu), and got a huge return on the thousands of dollars of restaurant bills by unloading the unwanted stuff on them. One expert salesman candidly explained to me: “If I buy the client, someone working for the finance department of a municipality who buys his suits at some department store in New Jersey, a bottle of $2,000 wine, I own him for the next few months. I can get at least $100,000 profits out of him. Nothing in the mahket gives you such return.”

Salesmen hawked how a given security would be perfect for the client’s portfolio, how they were certain it would rise in price and how the client would suffer great regret if he missed “such an opportunity”—that type of discourse. Salespeople are experts in the art of psychological manipulation, making the client trade, often against his own interest, all the while being happy about it and loving them and their company. One of the top salesmen at the firm, a man with huge charisma who came to work in a chauffeured Rolls Royce, was once asked whether customers didn’t get upset when they got the short end of the stick. “Rip them off, don’t tick them off” was his answer. He also added, “Remember that every day a new customer is born.”

As the Romans were fully aware, one lauds merrily the merchandise to get rid of it.

The Price of Corn in Rhodes

So, “giving advice” as a sales pitch is fundamentally unethical—selling cannot be deemed advice. We can safely settle on that. You can give advice, or you can sell (by advertising the quality of the product), and the two need to be kept separate.

But there is an associated problem in the course of the transactions: how much should the seller reveal to the buyer?

The question “Is it ethical to sell something to someone knowing the price will eventually drop?” is an ancient one—but its solution is no less straightforward. The debate goes back to a disagreement between two stoic philosophers, Diogenes of Babylon and his student Antipater of Tarsus, who took the higher moral ground on asymmetric information and seems to match the ethics endorsed by this author. Not a piece from both authors is extant, but we know quite a bit from secondary sources, or, in the case of Cicero, tertiary. The question was presented as follows, retailed by Cicero in De Officiis. Assume a man brought a large shipment of corn from Alexandria to Rhodes, at a time when corn was expensive in Rhodes because of shortage and famine. Suppose that he also knew that many boats had set sail from Alexandria on their way to Rhodes with similar merchandise. Does he have to inform the Rhodians? How can one act honorably or dishonorably in these circumstances?

We traders had a straightforward answer. Again, “stuffing”—selling quantities to people without informing them that there are large inventories waiting to be sold. An upright trader will not do that to other professional traders; it was a no-no. The penalty was ostracism. But it was sort of permissible to do it to the anonymous market and the faceless nontraders, or those we called “the Swiss,” some random suckers far away. There were people with whom we had a relational rapport, others with whom we had a transactional one. The two were separated by an ethical wall, much like the case with domestic animals that cannot be harmed, while rules on cruelty are lifted when it comes to cockroaches.

Diogenes held that the seller ought to disclose as much as civil law requires. As for Antipater, he believed that everything ought to be disclosed—beyond the law—so that there was nothing that the seller knew that the buyer didn’t know.

Clearly Antipater’s position is more robust—robust being invariant to time, place, situation, and color of the eyes of the participants. Take for now that

The ethical is always more robust than the legal. Over time, it is the legal that should converge to the ethical, never the reverse.

Hence:

Laws come and go; ethics stay.

For the notion of “law” is ambiguous and highly jurisdiction dependent: in the U.S., civil law, thanks to consumer advocates and similar movements, integrates such disclosures, while other countries have different laws. This is particularly visible with securities laws, as there are “front running” regulations and those concerning insider information that make such disclosure mandatory in the U.S., though this wasn’t so for a long time in Europe.

Indeed much of the work of investment banks in my day was to play on regulations, find loopholes in the laws. And, counterintuitively, the more regulations, the easier it was to make money.

Equality in Uncertainty

Which brings us to asymmetry, the core concept behind skin in the game. The question becomes: to what extent can people in a transaction have an informational differential between them? The ancient Mediterranean and, to some extent, the modern world, seem to have converged to Antipater’s position. While we have “buyer beware” (caveat emptor) in the Anglo-Saxon West, the idea is rather new, and never general, often mitigated by lemon laws. (A “lemon” was originally a chronically defective car, say, my convertible Mini, in love with the garage, now generalized to apply to anything that moves).

So, to the question voiced by Cicero in the debate between the two ancient stoics, “If a man knowingly offers for sale wine that is spoiling, ought he to tell his customers?,” the world is getting closer to the position of transparency, not necessarily via regulations as much as thanks to tort laws, and one’s ability to sue for harm in the event a seller deceives him or her. Recall that tort laws put some of the seller’s skin back into the game—which is why they are reviled, hated by corporations. But tort laws have side effects—they should only be used in a nonnaive way, that is, in a way that cannot be gamed. As we will see in the discussion of the visit to the doctor, they will be gamed.

Sharia, in particular the law regulating Islamic transactions and finance, is of interest to us insofar as it preserves some of the lost Mediterranean and Babylonian methods and practices—not to prop up the ego of Saudi princes. It exists at the intersection of Greco-Roman law (as reflected from people in Semitic territories’ contact with the school of law of Berytus), Phoenician trading rules, Babylonian legislations, and Arab tribal commercial customs and, as such, it provides a repository of ancient Mediterranean and Semitic lore. I hence view Sharia as a museum of the history of ideas on symmetry in transactions. Sharia establishes the interdict of gharar, drastic enough to be totally banned in any form of transaction. It is an extremely sophisticated term in decision theory that does not exist in English; it means both uncertainty and deception—my personal take is that it means something beyond informational asymmetry between agents: inequality of uncertainty. Simply, as the aim is for both parties in a transaction to have the same uncertainty facing random outcomes, an asymmetry becomes equivalent to theft. Or more robustly:

No person in a transaction should have certainty about the outcome while the other one has uncertainty.

Gharar, like every legalistic construct, will have its flaws; it remains weaker than Antipater’s approach. If only one party in a transaction has certainty all the way through, it is a violation of Sharia. But if there is a weak form of asymmetry, say, someone has inside information which gives an edge in the markets, there is no gharar as there remains enough uncertainty for both parties, given that the price is in the future and only God knows the future. Selling a defective product (where there is certainty as to the defect), on the other hand, is illegal. So the knowledge by the seller of corn in Rhodes in my first example does not fall under gharar, while the second case, that of a defective liquid, would.

As we see, the problem of asymmetry is so complicated that different schools give different ethical solutions, so let us look at the Talmudic approach.

Rav Safra and the Swiss

Jewish ethics on the matter is closer to Antipater than Diogenes in its aims at transparency. Not only should there be transparency concerning the merchandise, but perhaps there has to be transparency concerning what the seller has in mind, what he thinks deep down. The medieval rabbi Shlomo Yitzhaki (aka Salomon Isaacides), known as “Rashi,” relates the following story. Rav Safra, a third-century Babylonian scholar who was also an active trader, was offering some goods for sale. A buyer came as he was praying in silence, tried to purchase the merchandise at an initial price, and given that the rabbi did not reply, raised the price. But Rav Safra had no intention of selling at a higher price than the initial offer, and felt that he had to honor the initial intention. Now the question: Is Rav Safra obligated to sell at the initial price, or should he take the improved one?

Such total transparency is not absurd and not uncommon in what seems to be a cutthroat world of transactions, my former world of trading. I have frequently faced that problem as a trader and will side in favor of Rav Safra’s action in the debate. Let us follow the logic. Recall the rapacity of salespeople earlier in the chapter. Sometimes I would offer something for sale for, say, $5, but communicated with the client through a salesperson, and the salesperson would come back with an “improvement,” of $5.10. Something never felt right about the extra ten cents. It was, simply, not a sustainable way of doing business. What if the customer subsequently discovered that my initial offer was $5? No compensation is worth the feeling of shame. The overcharge falls in the same category as the act of “stuffing” people with bad merchandise. Now, to apply this to Rav Safra’s story, what if he sold to one client at the marked-up price, and to another one the exact same item for the initial price, and the two buyers happened to know one another? What if they were agents for the same customer? --This text refers to the hardcover edition.

Product details

ASIN ‏ : ‎ B075HYVP7C
Publisher ‏ : ‎ Random House (February 27, 2018)
Publication date ‏ : ‎ February 27, 2018
Language ‏ : ‎ English
File size ‏ : ‎ 12454 KB
Text-to-Speech ‏ : ‎ Enabled
Enhanced typesetting ‏ : ‎ Enabled
X-Ray ‏ : ‎ Enabled
Word Wise ‏ : ‎ Enabled
Sticky notes ‏ : ‎ On Kindle Scribe
Print length ‏ : ‎ 254 pages

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Nassim Nicholas Taleb

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Nassim Nicholas Taleb spent more than two decades as a risk taker before becoming a full-time essayist and scholar focusing on practical, philosophical, and mathematical problems with chance, luck, and probability. His focus in on how different systems handle disorder.

He now spends most of his time in the intense seclusion of his study, or as a flâneur meditating in cafés. In addition to his life as a trader he spent several years as an academic researcher (12 years as Distinguished Professor at New York University's School of Engineering, Dean's Professor at U. Mass Amherst).

He is the author of the Incerto (latin for uncertainty), accessible in any order (Skin in the Game, Antifragile, The Black Swan, The Bed of Procrustes, and Fooled by Randomness) plus a technical version, The Technical Incerto (Statistical Consequences of Fat Tails). Taleb has also published close to 55 academic and scholarly papers as a backup, technical footnotes to the Incerto in topics ranging from Statistical Physics and Quantitative Finance to Genetics and International affairs. The Incerto has more than 200 translations in 41 languages.

Taleb believes that prizes, honorary degrees, awards, and ceremonialism debase knowledge by turning it into a spectator sport.

""Imagine someone with the erudition of Pico de la Mirandola, the skepticism of Montaigne, solid mathematical training, a restless globetrotter, polyglot, enjoyer of fine wines, specialist of financial derivatives, irrepressible reader, and irascible to the point of readily slapping a disciple." La Tribune (Paris)

A giant of Mediterranean thought ... Now the hottest thinker in the world", London Times

"The most prophetic voice of all" GQ

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Barren Wuffett

About the real world: think in dynamics, not statics. Think in terms of interactions as well as actions.

Reviewed in the United States 🇺🇸 on February 28, 2018

Verified Purchase

[TLDR] This practical and provocative book is mostly about:
1) Uncertainty and the reliability of knowledge (b/s detection, theory vs practice, cosmetic vs true expertise, etc).
2) Symmetry in human affairs (fairness, justice, responsibility, reciprocity). e.g.: to get the rewards you must also get some of the risks; not let others pay for your mistakes.
3) Information in transactions
4) Rationality in complex systems.

The main aspect of "Skin in the game" (SITG) - a phrase probably made popular by Warren Buffet - is, in Taleb's view, about matching disincentives to incentives. For Taleb, SITG isn’t purely incentives (e.g.: just having a share of some benefits). It is SYMMETRY in both UPSIDE and DOWNSIDE. Taleb makes this important aspect extremely explicit since the very beginning of the book (page-4).

If some actors pocket rewards from a policy they enact or support (without accepting risks/downside), various economists consider it to be a problem of "missing incentives". In contrast, for Taleb, the problem is more fundamentally one of asymmetry: one actor gets the rewards, others are stuck with the risks. Forcing SITG corrects this asymmetry (you cannot make profits and transfer the risks to others as some large corporations do; bankers being bailed out by the public are the antithesis of SITG). Actors, per Taleb, must always bear a symmetric cost when they fail the public (this is SITG!). A fund manager that gets a percentage on wins, but no penalty for losing is incentivised to gamble with his clients funds. Bearing no downside for one's actions, means that one has no "Skin In The Game"

A few insights from the book:

- Having exposure to the real world, with upside and downside, is the best (often the only) way to learn.

- EXPOSURE TO REAL WORLD CONSEQUENCES beats Intellectualizing. Employed intellectuals, professional academics, or bureaucrats are rarely in love with thoughts & ideas. They are primarily in love with orthodoxies in their respective fields.

- There are some risks we just cannot afford to take (e.g.: systemic risks). There are some risks we cannot afford to NOT take.

- Intelligentsia have no downside for their actions (no SITG).

- There is no evolution without skin in the game. Note how most academics (Economists, Psychologists, Sociologists, Social Scientists, etc) can be wrong for so long, while MOST businesses cannot (except the likes of Goldman Sachs and others, provided the Government bails them out when they mess up)

- Government intervention, in general, tends to remove SITG, to weaken robustness in complex (economic, social, financial) systems.
- Interventionists don't suffer the consequences of their bad actions, policies, etc

- About the real world: think in dynamics, not statics. Think in high, not low dimensions. Think in terms of interactions as well as actions.

- SITG doesn’t literally mean an eye for an eye. It just means there is a downside large enough (for individuals) to protect the overall system.

- We know far more what is bad than what is good. Therefore, when treating others: no bad actions > good actions as a rule.

- Universal behavior is great on paper, disastrous in practice. Why? We are local and practical animals, sensitive to scale. The small is not the large; the tangible is not the abstract; the emotional is not the logical. Most behaviors do not scale. Family members are not friends and random people on the street are not friends. What's worse: the general and abstract tend to attract self-righteous psychopaths.

- Avoid taking advice from someone who gives advice for a living, unless there are also penalties for their bad advice.

- The doer wins by doing, not convincing. e.g. if someone is trying to convince you how cool their life is then it is not cool

- How often you forecast correctly is not so important. What matters more is which outcomes you can forecast correctly. The payoffs matter more.

- SITG can help with solving black swan problems. That which has survived over time, with SITG, has proven its robustness.

- People with SITG bring simplicity. People with SITG have no benefit for added complexity. Therefore be careful of people without SITG proposing complex solutions for a problem. They have incentive to seem sophisticated instead of just solving the actual problem

- The average behavior of the market participant will not allow us to understand the general behavior of the market.

- Careful of people who want more regulations as they have incentive to complexify it, so they are more needed.

- People can be largely collaborative except when institutions get in the way.

- Whenever there is a mismatch with "bonus period" (e.g.:1 year) and "statistical blowup" (e.g.:10 years) people will transfer as much risk as possible to the future (get the bonus in 1yr, worry about blowing up much later)

- Learning is rooted in repetition and convexity, reading one book twice is often more useful than two books once.

- Professional reviewers tend to want to impress other reviewers while normal people just say their opinions, so be careful of professional reviewers as they have a lack of SITG

- Freedom entails risks, real skin in the game. Freedom is never free

- Data does not imply rigor

- Never pay for complexity of presentation when all you need is results.

- Change for the sake of change is frequently the enemy of progress (inverse of the Lindy effect)

- You can criticize what a person said or what a person meant. One is honorable, the other is embarrassing

- Virtue is what you do when nobody is looking. Virtue is not something you advertise.

- Survival comes first, truth, understanding, and science later.

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Adam Tarnawski

(Pseudo)Intellectual vomit

Reviewed in the United States 🇺🇸 on November 4, 2020

Verified Purchase

Certainly, many of his remarks or ideas are absolutely true, yet short of brilliant and certainly he wasn't the first to make them. His ego, however, is completely limitless. The book can be summed up by one word: RANT. But I prefer to call it a vomit.

It's a collection anecdotes, remarks, thoughts. A lot of breadth with little depth. Far from philosophical as he claims. But let's look at some "brilliant" quotes of his:

Quote 1:
"And it was not because pagans had an intellectual deficit: in fact, my heuristic is that the more pagan, the more brilliant one’s mind, and the higher one’s ability to handle nuances and ambiguity. Purely monotheistic religions such as Protestant Christianity, Salafi Islam, or fundamentalist atheism accommodate literalist and mediocre minds that cannot handle ambiguity".

As an atheist (so no skin in the game) I can only say that it is Taleb who can't handle ambiguity. This is one if his many remarks fitting into the theme: "everything ancient/old is smart, everything new is stupid". Historically most people didn't have much choice when it comes to religion. Once conquered you had to fit in. When Poland adopted Christianity in AD 966 it's not like everyone suddenly became less sophisticated. You can argue that if one has freedom to choose and opts for paganizm or a monotheistic religion, then there are some underlying psychological causes. But there is no data to support that and it's ironic that he is making such a baseless claim while mocking other for doing the same thing.

Quote 2:
"Another attribute of decentralization, and one that the “intellectuals” opposing an exit of Britain from the European Union (Brexit) don’t get".

Ok, so if you doubt an overwhelmingly positive effect of Brexit on UK future, then you are an "intellectual". You think you will find any deeper argument to support that? Nope.

Quote 3:
"Understanding how the subparts of the brain (say, neurons) work will never allow us to understand how the brain works."
This is exactly how science works. Dissect the problem into smaller parts or oversimplified model and gradually add complexity and interactions.

Quote 4:
"Understanding the genetic makeup of a unit will never allow us to understand the behavior of the unit itself"
That's a very bold statement given the fact that our knowledge of genetics is still in infancy. Of course the author doesn't provide an alternative approach.

Quote 5:
"Those who use foul language on social networks (such as Twitter) are sending an expensive signal that they are free—and, ironically, competent."

No, you are not signalling competence by using foul language. If this were true, than people from the lowest tiers of society should be the smartest, right? (A recurring theme in this book)

Quote 6:
"Ironically, in my debates, I’ve seen numerous winners of the so-called Nobel in Economics (the Riksbank Prize in Honor of Alfred Nobel) concerned about losing an argument. I noticed years ago that four of them were actually concerned that I, a nonperson and trader, publicly called them frauds."

You can often read in this book that everyone is an idiot, fraud, etc. Only Taleb brings light! If they are "frauds" then why does it make him so proud that they care about his opinion at all? (we don't know if they actually care). What he fails to understand is that he is a NOBODY. A premier league football team should not play with a local amateur team. There are always chances that they lose. They might have a bad day or their opponents style is non-conservative. From the cost-benefit aspect they have everything to lose but nothing to win. Their amateur opponents, however, are in an opposite situation. They have everything to win and nothing to lose. That's why they don't want to engage with Taleb.

Quote 7:
"The deprostitutionalization of research will eventually be done as follows. Force people who want to do “research” to do it on their own time, that is, to derive their income from other sources. Sacrifice is necessary. It may seem absurd to brainwashed contemporaries, but Antifragile documents the outsized historical contributions of the nonprofessional, or, rather, the non-meretricious. For their research to be genuine, they should first have a real-world day job, or at least spend ten years as: lens maker, patent clerk, Mafia operator, professional gambler, postman, prison guard, medical doctor, limo driver, militia member, social security agent, trial lawyer, farmer, restaurant chef, high-volume waiter, firefighter (my favorite), lighthouse keeper, etc., while they are building their original ideas."

Taleb often expresses this simplistic view of the world based on historic examples of people who came up with brilliant inventions in their spare time (e.g. Einstein was a patent clerk in Germany). He completely overlooks the fact that non-theoretical research requires tons of resources - financial, technical and intellectual. Something that cannot be conducted in spare time or in your backyard.

"If you hear advice from a grandmother or elders, odds are that it works 90 percent of the time. On the other hand, in part because of scientism and academic prostitution, in part because the world is hard, if you read anything by psychologists and behavioral scientists, odds are that it works at less than 10 percent, unless it is has also been covered by the grandmother and the classics, in which case why would you need a psychologist?"

What if your grandmother is an idiot? How can you tell if she is or not an idiot? Are you allowed to question her wisdom if you think she is? Or are you nevertheless obligated to follow her advise? This is as intellectually shallow as you can get. His enchantment with folk wisdom is prevalent across the book.

There are tons of similar nonsense in his book but I only selected a few from the first half. I wanted to recommend some alternatives at the end but it's even hard to say what Taleb's book is about. The term "Skin in the game" refers to the idea that you should be invested in your decisions by having your skin in it. A very old and obvious concept. If you are tasked with making risky decisions, you yourself should partake in a win or loss. But the book touches on many topic, mostly unrelated with the main concept of the book, thus the term VOMIT.

Read at your own peril.

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Freddy G

Good book, but in practice?

Reviewed in the United States 🇺🇸 on April 26, 2023

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This book is the intellectual equivalent of being hit over the head with a folding chair for a few hours. It’s arrogant, ponderous, not particularly well written, but there’s not much else like it and the epiphanies you get after the pain makes it worth the effort.

Taleb holds court like your snobbish uncle at a family gathering and just as people start filing out of the room he says something brilliant. But it’s this inane idiosyncratic telling that gives it edge. It reinforces this was thought up by a human in the real world rather than ChatGPT or Malcom Gladwell.

Taleb does his usual bashing but this time rather than focus on unpredictable events and the idiots who fail to anticipate them here he targets the idiots who have created a system here they can’t fail, even when these events occur (often caused by them.

A few years after writing it all he tossed his “do you even lift?” intellectual yet idiot bashing out the window during the pandemic and ran into the arms of the type indicted in this book while ripping anyone skeptical because.. Covid is scary.

But even a brilliant statistical mind like Taleb is only as good as the pharma sponsored dataset he forecasts vaccine efficacy from. That said his books will pass the Lindy test because they are both authentic and have already passed various real world tests. As a theoretical approach to complexity this is worth it. Just as there are no atheists in foxholes there are no stoics in a pandemic.

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Miguel

A must read

Reviewed in Mexico 🇲🇽 on May 30, 2023

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Asymmetries in daily life with different examples, you may agree or not, nevertheless all the topics are relevant and well presented.

recluse

talebもここまで来たか？

Reviewed in Japan 🇯🇵 on March 30, 2018

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talebの新作です。前作 Antifragile: Things that Gain from Disorder のとは異なり、ちょっと前の The Bed of Procrustes: Philosophical and Practical Aphorisms (Incerto) スタイルに似ているようです。繰り返しになるけどシオランを読んでいるようです。そう格言集に近いのかな。アメリカの文脈でいうとhow-to本に分類されてしまいますが、ただしアメリカ流のpositive thinkingやgolden ruleの押し付けではなく、talebらしくvia negativaやsilver ruleの集合なんですわ。もっともこれは著者のpersonalityや育ちのみに由来するのではなく、巻末のtechinal appendixに示される彼自身の研究に基づいているのですけど。,
それぞれの「格言」は深いインプリケーションを持つものです。bob rubin trade, scientism, minority rule, intellectual yet idiot (IYI), virtue merchandisingなどに代表される切り口は、どれも現代社会の本質を鋭くえぐっています。ただ本書はどうも全体のまとまりに欠けるようです。これはタイトルのskin in the game という言葉の豊潤な意味がどうも捉えきれないのかもしれません。いつものように聖書も含めた様々な古典がこのskin in the gameの議論のために援用されるのですが、どれもなじみがあまりない古典なのです。そして議論は宗教にまで伸びていくのです。
一方で、議論の中で繰り返し援用される概念は、最近の The End of Theory: Financial Crises, the Failure of Economics, and the Sweep of Human Interaction とかなりoverlapするのです。ergocity, emergent, heuristic, computational impossibilityそしてuncertaintyなどの概念は両者に共通しており、結局のところリスク管理の議論をその根源にまでさかのぼって誠実に詰めていくとこれらの概念にたどり着くようです。
さて結論からいうとこの本の正確な理解には再読が必要です。著者の作品はどれもが不思議な混合物なのです。一度目は全体を通して途切れることなく読み通し、そのイメージが強く残っているうちに、今度は丁寧に最初から読み直す。問題は本書の正確な理解にはつまるところ、techinical appendixを理解できるほどの数学的な基礎が必要な点なんだな。

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matias

Excelente libro

Reviewed in Mexico 🇲🇽 on April 19, 2022

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Excelente libro, sobre cómo diseñar mecanismos para el buen funcionamiento de sistemas ya sean en negocios , sociales u otros objetivos

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Fleming

Good stuff

Reviewed in Japan 🇯🇵 on February 5, 2019

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Good

Cliente de Amazon

Everybody should read this book

Reviewed in Mexico 🇲🇽 on March 16, 2018

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A must read to understand the current and increasingly complexity of the world, and to get insights on possible ways to make a positive change in society, economy and politics.

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