Nassim’s latest book Skin in the Game it finally out!
Click here to view on Amazon: http://amzn.to/2FuMkrl
From the New York Times bestselling author of The Black Swan, a bold new work 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.”
a critical part of the decision matrix is to see which players have real skin in the game. Beware those decision makers with no skin in the game, as well as those that appear to have too much skin in the game
In Book 1, Table 2 “Appendix Asymmetries in Society”, Politicians are in the no-skin and Activists are in the skin in the game column. A case could be made for the reverse. After all, a politician can loose an election. Activist, can pursue their single issue and always remain in good standing with their equally single issue fellow travelers. Environmentalists can push the “Energy Wende” without being accountable for high electricity prices.
In the third column we have Dissidents and Revolutionaries. I would agree that a dissident stands out from the crowd and that is always at personal risk, and most often for some greater good. However, the case for calling revolutionaries unselfish fails, although they certainly take risk. They have skin in the same way that entrepreneurs do.
Risk travels to those that least understand it, and that’s why Treasury Secretary Paulson & Ben Bernanke
passed off their industry wide avalanche of toxic waste debt off onto the unsuspecting taxpayers of the Western world, and primarily the people of the United States of America. Investment bankers & Central Bankers have a fiduciary responsibility to always be on top off all risks. They collectively knew that they had destroyed Capitalism within the timeframe of nine years after the SEC relaxed Glass-Steagall Act. regulation for the cartel top five Wall Street Investment Banks so that they could make unscrupulous bets via their own private proprietary trading desks and the commercial bank deposits of every mom & pop small business, and lowly taxpayer in the entire country.
Yes sir, they knew they were not going to eat their own mistakes in life, and they decided to dump all of their decades of unprofessionalism industry wide on the least
knowledgeable sector of the entire world.
Each & every banker in the entire world knows that loss is to be passed on to anyone but them no matter if it is their own mistakes that resulted in the loss. Bankers do not do God’s work like Lloyd Blankfein likes to exclaim.
Nasim Taleb is right about these predators & psychopaths in the Investment Banking Industry.
Wall Street is officially nonsense and undoubtedly the basis of increased worldwide tensions regarding Thermonuclear Hot World War Three.
Jamie Dimon, Lloyd Bankfein, Henry Paulson, Ben Bernanke, Alan Greenspan, Robert Rubin, & Lawrence Summers all have skin-in-the-game when it comes to Nuclear Winter.
MOU