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Nassim Nicholas Taleb’s “Skin in the Game: Hidden Asymmetries in Daily Life” is the fifth book in the Incerto series and the latest culmination of Taleb’s thought-provoking and insightful ideas, which I actually read first and it caused me to want to go back to eventually start the whole series with his first book “Fooled by Randomness.” Taleb is known for his ability to question conventional wisdom and analyze risks that we face in our daily lives. “Skin in the Game” is no different in this regard, offering a unique perspective on the significance of risk and how it plays a crucial role in our decision-making processes.
Prior to reading this book, I thought I had a fundamental appreciation for risk, but Taleb’s writing has opened my eyes to a whole new way of thinking about the topic. Taleb reintroduces us to the concept of “skin in the game,” which refers to having a personal stake in the outcome of a decision or action. He argues that this is a crucial factor in many aspects of life, from politics and economics to personal relationships and health. Without skin in the game, individuals and institutions can act with reckless abandon, taking risks that can harm others while bearing no personal consequences themselves.
He illustrates this idea with a fascinating anecdote from Greek mythology, in which a group of fishermen attempt to sell their catch of live turtles to the god of commerce, Hermes. The fishermen believed that the turtles tasted too poorly to eat, and so they wanted to sell them to Hermes. However, Hermes saw through their ruse, recognizing that the fishermen had no skin in the game – they could not sell them without lying about the taste, and so they were being dishonest. As a result, Hermes force fed them the turtles as punishment for their attempt at trickery.
This story illustrates the importance of skin in the game in a clear and powerful way. Without a personal stake in the outcome of a decision, individuals and institutions can act recklessly or deceitfully, with no regard for the consequences to others. This has serious implications for many aspects of life, from financial markets and corporate governance to political decision-making and personal relationships.
Taleb goes on to explore this idea in more depth, examining the ways in which lack of skin in the game can lead to hidden asymmetries and moral hazard. He argues that many of the problems in our modern world can be traced back to a lack of personal responsibility and a failure to recognize the importance of having skin in the game.
Overall, “Skin in the Game” is a thought-provoking and eye-opening book that challenges readers to think more deeply about the role of risk and responsibility in their lives. Taleb’s writing is complex and challenging, but it is well worth the effort for anyone who wants to gain a deeper understanding of these important ideas.