Quotes from Skin in the Game: Hidden Asymmetries in Daily Life by Nassim Nicholas Taleb

“Decentralization is based on the simple notion that it is easier to macrobull***t than microbull***t. Decentralization reduces large structural asymmetries.”
“For studying courage in textbooks doesn’t make you any more courageous than eating cow meat makes you bovine. By some mysterious mental mechanism, people fail to realize that the principal thing you can learn from a professor is how to be a professor—and the chief thing you can learn from, say, a life coach or inspirational speaker is how to become a life coach or inspirational speaker. So remember that the heroes of history were not classicists and library rats, those people who live vicariously in their texts. They were people of deeds and had to be endowed with the spirit of risk taking”
“If you do not take risks for your opinion, you are nothing.”
“A saying by the brothers Geoff and Vince Graham summarizes the ludicrousness of scale-free political universalism. I am, at the Fed level, libertarian; at the state level, Republican; at the local level, Democrat; and at the family and friends level, a socialist.”
“Those who talk should do and only those who do should talk.”
“You can tell if a discipline is BS if the degree depends severely on the prestige of the school granting it. I remember when I applied to MBA programs being told that anything outside the top ten or twenty would be a waste of time. On the other hand a degree in mathematics is much less dependent on the school (conditional on being above a certain level, so the heuristic would apply to the difference between top ten and top two thousand schools). The same applies to research papers. In math and physics, a result posted on the repository site arXiv (with a minimum hurdle) is fine. In low-quality fields like academic finance (where papers are usually some form of complicated storytelling), the “prestige” of the journal is the sole criterion.”
“You can define a free person precisely as someone whose fate is not centrally or directly dependent on peer assessment.”
“The only definition of rationality that I’ve found that is practically, empirically, and mathematically rigorous is the following: what is rational is that which allows for survival. Unlike modern theories by psychosophasters, it maps to the classical way of thinking. Anything that hinders one’s survival at an individual, collective, tribal, or general level is, to me, irrational.”
“Things designed by people without skin in the game tend to grow in complication (before their final collapse). There is absolutely no benefit for someone in such a position to propose something simple: when you are rewarded for perception, not results, you need to show sophistication. Anyone who has submitted a “scholarly” paper to a journal knows that you usually raise the odds of acceptance by making it more complicated than necessary. Further, there are side effects for problems that grow nonlinearly with such branching-out complications. Worse: Non-skin-in-the-game people don’t get simplicity.”
“Journalists are currently in the most insecure profession you can find: the majority live hand to mouth, and ostracism by their friends would be terminal. Thus they become easily prone to manipulation by lobbyists, as we saw with GMOs, the Syrian wars, etc. You say something unpopular in that profession about Brexit, GMOs, or Putin, and you become history. This is the opposite of business where me-tooism is penalized.”
“How much you truly “believe” in something can be manifested only through what you are willing to risk for it.”
“The knowledge we get by tinkering, via trial and error, experience, and the workings of time, in other words, contact with the earth, is vastly superior to that obtained through reasoning, something self-serving institutions have been very busy hiding from us.”
“A civil servant can make rules that are friendly to an industry such as banking—and then go off to J.P. Morgan and recoup a multiple of the difference between his or her current salary and the market rate. (Regulators, you may recall, have an incentive to make rules as complex as possible so their expertise can later be hired at a higher price.)”
“Those who use foul language on social networks (such as Twitter) are sending an expensive signal that they are free—and, ironically, competent. You don’t signal competence if you don’t take risks for it—there are few such low-risk strategies. So cursing today is a status symbol, just as oligarchs in Moscow wear blue jeans at special events to signal their power.”
“making some types of errors is the most rational thing to do, when the errors are of little cost, as they lead to discoveries. For instance, most medical “discoveries”are accidental to something else. An error-free world would have no penicillin, no chemotherapy…almost no drugs, and most probably no humans. This is why I have been against the state dictating to us what we “should”be doing: only evolution knows if the “wrong”thing is really wrong, provided there is skin in the game to allow for selection.”
“Thirty-nine percent of Americans will spend a year in the top 5 percent of the income distribution, 56 percent will find themselves in the top 10 percent, and 73 percent will spend a year in the top 20 percent.”
“we have evidence that collectively society doesn’t advance with organized education, rather the reverse: the level of (formal) education in a country is the result of wealth.”
“Administrators everywhere on the planet, in all businesses and pursuits, and at all times in history, have been the plague.”
“The divergence is evident in that journos worry considerably more about the opinion of other journalists than the judgment of their readers. Compare this to a healthy system, say, that of restaurants. As we saw in Chapter 8, restaurant owners worry about the opinion of their customers, not those of other restaurant owners, which keeps them in check and prevents the business from straying collectively away from its interests.”
“Silver Rule (negative golden rule): Do not do to others what you would not like them to do to you. Note the difference from the Golden Rule, as the silver one prevents busybodies from attempting to run your life.”
“Almost every academic you are going to meet is a complete and utter fraud. Scientists don’t do science any more. They do scientism. Economists don’t do economics. They do economism. They just come up with a whole load of ideas they can all agree upon to keep themselves in a job. Architects are the same. If they were crushed to death under a pile of rubble when one of their buildings fell down, they might try harder to design less crap. They all call themselves experts but they are anything but.”
“If you take risks and face your fate with dignity, there is nothing you can do that makes you small; if you don’t take risks, there is nothing you can do that makes you grand, nothing.”
“What we do today has nothing to do with capitalism or socialism. It is a crony type of system that transfers money to the coffers of bureaucrats.”

One thought on “Quotes from Skin in the Game: Hidden Asymmetries in Daily Life by Nassim Nicholas Taleb

  1. Some refreshing, clean, cutting-through from Taleb!

    “Things designed by people without skin in the game tend to grow in complication (before their final collapse). There is absolutely no benefit for someone in such a position to propose something simple: when you are rewarded for perception, not results, you need to show sophistication. Anyone who has submitted a “scholarly” paper to a journal knows that you usually raise the odds of acceptance by making it more complicated than necessary.”

    “The knowledge we get by tinkering, via trial and error, experience, and the workings of time, in other words, contact with the earth, is vastly superior to that obtained through reasoning, something self-serving institutions have been very busy hiding from us.”

    “So cursing today is a status symbol, just as oligarchs in Moscow wear blue jeans at special events to signal their power.”

    Like

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