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Best of the Month – Skin In The Game

Best of the Month – Skin In The Game

| On 15, Aug 2018

Darrell Mann

When Nassim Nicholas Taleb releases a new book, its unlikely there will be anything else arriving on the market that will be able to compete for our Best Of The Month slot. And, true to form, his new book Skin In The Game delivers the goods.

Admittedly, however, when I saw Taleb lecturing in London on the day of the launch of the book, I felt like reversing my instincts. To the point where I ended up writing a blog post to vent my frustration about how bad the lecture was. Fortunately, (I think) I’ve managed to get that frustration out of my system now. Enough at least to allow myself to read and re-read the book without thinking about how poorly Taleb came across in the flesh.

So what we get in Skin In The Game is Taleb’s anger at various sectors of society nicely turned up to eleven. If you don’t like economists, politicians, fat-cat CEOs, journalists and academics, and want to read someone elegantly demolishing each of them, this is the book for you. Their problem, Taleb convincingly demonstrates is that these are the professions in which no-one has any real ‘skin in the game’. That is, they are people who make pronouncements about the future safe in the knowledge that if those pronouncements don’t pan out there’s little or no negative consequence to them personally, but rather a lot to the people that had the bad fortune of listening to them and acting upon their pronouncements. About 40% of the book is basically a rant against these people.

Another 40% of the book describes a series of strategies and heuristics for dealing with risk and making sure you deal with people who do possess some actual skin in the games you’re thinking of participating in.

The final 20% then seems to be about Taleb answering various of his critics. Some of this content is quite funny, but mostly it comes across as Taleb showing-off his ‘let me show you how much smarter than you I am’ intellect. Granted his ability to step back, see big pictures does put him at a major advantage over 99% of other commentators. When people attack him without understanding complexity they’re always going to find themselves on shaky ground. Usually finding themselves embarrassed at the wrong end of some serious mathematical argument. This too can be quite funny, even if I have to resort to humming the mathematical formulae half the time.

First time through at least, the ‘best bits’ are the always-pithy italicized pull-out sentences. If you’re an aphorism fan, this is your book:

“You do not want to win an argument. You want to win.”

“Things designed by people without skin in the game tend to grow in complication (before their final collapse).”

“Under the right market structure, a collection of idiots produces a well-functioning market’.”

“Anything that smacks of competition destroys knowledge.”

“If your private life conflicts with your intellectual opinion, it cancels your intellectual ideas, not your private life.”

Second time through, you get to read the power behind the aphorism. And see the chips on Taleb’s shoulders (both – he’s a well balanced guy!) for what they are: the rantings of a smart person who is so disgusted by the (mainly journalists) who criticize him that he can no longer be bothered to assemble a coherent argument.

He doesn’t understand ‘solving contradictions’ (the subject of a second blogpost I wrote), and because he therefore lives in a frustrating either/or world he can’t see past the criticism to the usually intended useful discussion point. See, for example, Zoe Williams review of the book in The Guardian ( Mostly highly complementary about the book, Taleb, obviously still feeling aggrieved at a past argument with another journalist on the paper, ends up resorting to a suite of Twitter/Blog diatribes attacking Williams. Part of her criticism was that the book would have been better if Taleb had employed an assistant to do some fact checking for him. Assistants don’t have skin in the game he swiftly retorted, the author is an artisan and must stand or fall on their own work. Which has a certain ring of truth to it if you don’t understand contradictions. But if you do understand contradictions and you read some of the dumber stories in the book (the Prince Andrew nonsense would make a good start!), you’re left thinking only that both he and Williams are right. Authors should indeed stand-or fall on their publications, but that shouldn’t stop them from employing someone in the background to do a touch of fact-checking here or there. Assistants can be made to have skin in the game too. Especially if they’re working for Nassim Taleb.

On this level, the book will make you angry. On most others it will make you positively gleeful. Either way, that’s the mark of the man. It’s Taleb, and therefore you need to read it.