Nassim in Evonomics: How To Legally Own Another Person

Nassim shares an excerpt from his work-in-progess Skin in the Game, at Evonomics. In a fascinating article called How To Legally Own Another Person, he discusses how and why well-paid employees behave much like slaves. It begins:

In its early phase, as the church was starting to get established in Europe, there was a group of itinerant people called the gyrovagues. They were gyrating and roaming monks without any affiliation to any institution. Theirs was a free-lance (and ambulatory) variety of monasticism, and their order was sustainable as the members lived off begging and from the good graces of townsmen who took interest in them. It is a weak form of sustainability, as one can hardly call sustainable a group of a people with vows of celibacy: they cannot grow organically and would need continuous enrollment. But their members managed to survive thanks to help from the population, which provided them with food and temporary shelter.

Sometimes around the fifth century, they started disappearing –they are now extinct. The gyrovagues were unpopular with the church, banned by the council of Chalcedon in the Fifth Century, then again by the second council of Nicaea about three hundred years later. In the West, Saint Benedict of Nurcia, their greatest detractor, favored a more institutional brand of monasticism and ended up prevailing with his rules that codified the activity, with a hierarchy and strong supervision by an abbot. For instance, Benedict’s rulesiii, put together in a sort of instruction manual, stipulate that a monk’s possessions should be in the hands of the abbot (Rule 33) and Rule 70 bans angry monks from hitting other monks.

Why were they banned? They were, simply, totally free. They were financially free, and secure, not because of their means but because of their wants. Ironically by being beggars, they had the equivalent of f*** you money, the one can get more easily by being at the lowest rung than by being member of the income dependent class.

You can read the rest of the article at Evonomics.

SSRN: Constantine Sandis & Nassim Nicholas Taleb – The Skin In The Game Heuristic for Protection Against Tail Events

The Skin In The Game Heuristic for Protection Against Tail Events

Constantine Sandis
Oxford Brooks

Nassim Nicholas Taleb
NYU-Poly; Université Paris I Panthéon-Sorbonne – Centre d’Economie de la Sorbonne (CES)

July 30, 2013

Abstract:
Standard economic theory makes an allowance for the agency problem, but not the compounding of moral hazard in the presence of informational opacity, particularly in what concerns high-impact events in fat tailed domains. But the ancients did; so did many aspects of moral philosophy. We propose a global and morally mandatory heuristic that anyone involved in an action which can possibly generate harm for others, even probabilistically, should be required to be exposed to some damage, regardless of context. While perhaps not sufficient, the heuristic is certainly necessary hence mandatory. It is supposed to counter risk hiding and transfer in the tails. We link the rule to various philosophical approaches to ethics and moral luck.

http:// papers. ssrn. com/ sol3/ papers.cfm? abstract_id=2298292

EconTalk with Russ Roberts: Taleb on Skin in the Game

econ-talk-library-of-economics-and-liberty-nassim-talebNassim Taleb of NYU-Poly talks with EconTalk host Russ Roberts about his recent paper (with Constantine Sandis) on the morality and effectiveness of “skin in the game.” When decision makers have skin in the game–when they share in the costs and benefits of their decisions that might affect others–they are more likely to make prudent decisions than in cases where decision-makers can impose costs on others. Taleb sees skin in the game as not just a useful policy concept but a moral imperative. The conversation closes with some observations on the power of expected value for evaluating predictions along with Taleb’s thoughts on economists who rarely have skin in the game when they make forecasts or take policy positions.

Website: http:// www. econtalk. org/ archives/ 2013/ 09/ taleb_ on_ skin_i. html
Direct Link (mp3): http:// files. liberty fund. org/ econtalk / y2013 /Taleb skin. mp3
Link to the Paper: http:// papers. ssrn. com/ sol3/ papers.cfm? abstract_id= 2298292