Audio Of The Week: Skin In The Game
I have been listening to Nassim Nicholas Taleb‘s new book, Skin In The Game, in audiobook form while driving around LA this past week. I’ve always been a fan of having skin in the game and others having skin in the game and so it’s a topic that makes a lot of sense to me.
I happened upon this podcast between Russell Roberts and Nassim and it’s a pretty good summary of many of the important topics in the book. So if you don’t have time to read or listen to the entire book, this podcast is an excellent short cut to some important concepts.
I am half way through the book itself, and there is so much common sense in it. Here’s the latest thought I highlighted :”truth can only happen in the overlaps”
As an Armenian, I can see how geography – always being in the path of invading empires – from the east and the west – can lead to the paranoia that begets a 5000 year + nation state. But I can also see how the ability to survive breeds an envy that may eventually threaten a nations survival – especially if there is a destruction of the state and a subsequent diaspora necessarily chooses to maintain culture vs. assimilation (leading to more risks.) All or nothing works until it doesn’t, what’s the end game? I think I heard it in the podcast – it went something like this from John Donne – it’s about reframing your actions, because if a chip be lost in Las Vegas, all America is less – but, to deny that humanness is to set up the next battle of dogmas – well, I didn’t expect to do any thinking today, I have to go to the hardware store to deal with these squirrelsNo man is an island,Entire of itself.Each is a piece of the continent,A part of the main.If a clod be washed away by the sea,Europe is the less.As well as if a promontory were.As well as if a manor of thine ownOr of thine friend’s were.Each man’s death diminishes me,For I am involved in mankind.Therefore, send not to knowFor whom the bell tolls,It tolls for thee.
I agree with him that focusing and mitigating the biggest risk is the smartest strategy. He goes off the rails though when he dismisses belief as operative when it comes to behavior. If I tell you your partner is cheating on you, your reaction and subsequent behavior will depend on the degree to which you believe my claim. The fact that he doesn’t get that is a big miss.
What a great podcast. He does great work. Great economics. Great common sense. If you don’t listen to this you have done a disservice. As good as Friedman. The only thing I think he missed is that if you are a trader, and you “blow up”If it is your money, he is right you have to survive. But if it is not your money you have different incentives.This is a very different incentive in our system.Now in no way am I saying we should change. I very much dislike the changes we made to bankruptcy laws.I believe that our acceptance of failure is probably the biggest reason for SV. People don’t care if you have failed. You did not “kill the tribe”Now when you start translating this to people that’s job is to trade money not build things……different.Don’t know the solution, just pointing out a problem.