Skin in the Game by Nassim Nicholas Taleb

Rating: ★★★

Skin in the Game was fine. Some things I agreed with, some I didn't, but I wasn't convinced much either way. I do think that Taleb's explicit emphasis on ethics should be praised. Branko Milanovic talks about this in further detail in his piece about Taleb's system and how it goes "from empirics to ethics."

Here are some good parts and bad parts:

Taleb makes fun of things I don't like

Taleb makes fun of things I don't like, and I of course like that.

  • He shows disdain for Sunstein and Thaler and their "nudges." They reason from first-order models are are prone to mistaking groups for aggregation of components, thinking that a single individual lets us understand a crowd or market. Taleb is basically making fun of micro foundations for macro, which I of course like.
  • He craps on Pinker, which I of course like. (There are even more Pinker and Thaler jabs later on in the book, which I of course like.)
  • He includes a funny anecdote about molecular gastronomy. He says it sucks. Of course I like this.
  • He makes fun of people who talk about quantum mechanics outside of discussions of actual physics, which of course I like.
  • He makes fun of cataphatic theology: "[P]urely monotheistic religions such as Protestant Christianity, Salafi Islam, or fundamentalist atheism accommodate literalist and mediocre minds that cannot handle ambiguity." I, an apophatic theology enjoyer, of course like this.

Paranoia is rational

Because risk adds up, and ruin happens only once, paranoia about low-probability events is rational. It's easy to come up with a story about how you're overpaying for insurance, but you might have other liabilities or risks that you need to cover or otherwise face total ruin.

"It doesn't cost me much to go with my 'refined paranoia,' even if wrong. For all it takes is for my paranoia to be right once, and it saves my life."

Don't use more machinery than you need

Using math when you don't need to isn't science.

Taleb left data out of The Black Swan because people flood stories with numbers when they don't have good arguments. Of course I like this.

You can change things by being inflexible

Changes in society are driven by small number of people who refuse alternatives. All the cars in the US are created abide by California's emissions standards, the strictest in the nation – it's the least tolerant state (this is my example, I think).

Taleb's unnecessary disdain for sales

Taleb says "[t]he doer wins by doing, not convincing." and that "[t]he skills at making things diverge from those at selling things."

But selling has real value in the world! Some things require more than just yourself or more than you can straightforwardly accomplish right now. Selling a vision of the future is valuable because in many cases it's the only way to get the resources to do.

Making at scale without already existing wealth requires salesmanship.

Taleb's misplaced faith in design

"Leave people alone under a good structure and they will take care of things." This sounds an awful lot like designing your way out of politics, echoing Skinner.

A bad passage

Here's Taleb: "If a big corporation pollutes your neighborhood, you can get together with your neighbors and sue the hell out of it. Some greedy lawyer will have the paperwork ready. The enemies of the corporation will be glad to help. And the potential costs of the settlement would be enough of a deterrent for the corporation to behave."

This is a bad example because the damage a business can cause can far exceed its capacity to repair.

And what enemies would help? Certainly not competitors bound to do similar things and who would then open themselves up to similar lawsuits.

The corporation is also better equipped to handle lawsuits. They likely have an extant and active legal department while the neighborhood would have to start from scratch.

I won't dwell any more on this example. I just thought it was particularly bad.