Author:: [[Nassim Nicholas Taleb]] DateFinished:: 1/22/2023 Rating:: 7 Tags:: # Skin in the Game  ## 🚀The Book in 3 Sentences - Having skin in the game means having something to risk for an endeavor - Skin in the game has markedly decreased over the course of history as society has become more centralized - Those without skin in the game shouldn't be making important decisions ### 🎨 Impressions - Nassim has a very marked voice. You can tell it's him after just reading a few sentences. This can be a good and a bad thing. At times his snarkiness is hilarious and charming. At other times it can be bothersome. - Nonetheless the book is incredibly insightful, if you are willing to rift through Taleb's writing. He has a tendency to go on an on with stories instead of getting straight to the point. This can make it difficult to navigate the organization of the book as a whole. The ideas inside, however, are incredible. ### 📖Who Should Read It? - Anyone interested in politics - Anyone looking to improve their decision making - Philosophers interested in rationality or ethics ### ☘️ How the Book Changed Me - This book made me realize how important it is to have something to lose for all of the most important things I'm doing in life. So I went through all of my life areas and tried to find ways that I could add skin in the game where there wasn't any. - Firstly, I signed myself up for On Call in Speech and Debate. This makes it so that any meeting I can be randomly called up to give one of my speeches. This means if I don't have a speech ready when being called up, I'm fucked. - Secondly, I isntalled Habitica, a gamified task management app that makes it so my tasks, habits, and dailies give rewards or punish my in game character. In effect, all of my actions have skin in the game. # Summary [[Skin in the game]] [[Decentralization increases skin in the game because people involved in making decisions are more likely to have risk for loss in the decisions they are involved in]] [[Via negativa]] [[The Silver Rule]] [[Honor implies that there are some actions you would categorically never do, regardless of the material rewards]] [[The minority rule]] [[Madness of crowds]] [[Never pay for complexity of presentation when all you need is results]] [[Entrepreneurs are the people with the highest skin in the game.]] [[The rationality of an action can be judged only in terms of evolutionary considerations]] [[Skilled thieves shouldn't look like thieves]] ## Highlights To figure out why ethics, moral obligations, and skills cannot be easily separable in real life, consider the following. When you tell someone in a position of responsibility, say your bookkeeper, “I trust you,” do you mean that 1) you trust his ethics (he will not divert money to Panama), 2) you trust his accounting precision, or 3) both? The entire point of the book is that in the real world it is hard to disentangle ethics on one hand from knowledge and competence on the other. ([Location 146](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=146)) - Note: When you tell someone you trust them, do you trust in their expertise and understanding of a matter or in their ethics toward jt? When someone has skin in the game, you can be more willing to put your trust in them. They will lose too if something goes wrong. 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. ([Location 166](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=166)) those who don’t take risks should never be involved in making decisions. ([Location 218](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=218)) [[Skin in the game]] This idea of skin in the game is woven into history: historically, all warlords and warmongers were warriors themselves, and, with a few curious exceptions, societies were run by risk takers, not risk transferors. ([Location 223](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=223)) - Note: Now they just take a different shape. The warlords of our era now are entrepreneurs. The people that solve problems at their own immense risk Bureaucracy is a construction by which a person is conveniently separated from the consequences of his or her actions. And, one may ask, what can we do since a centralized system will necessarily need people who are not directly exposed to the cost of errors? Well, we have no choice but to decentralize or, more politely, to localize; to have fewer of these immune decision makers. Decentralization is based on the simple notion that it is easier to macrobull***t than microbull***t. Decentralization reduces large structural asymmetries. ([Location 242](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=242)) - Note: [[Decentralization increases skin in the game because people involved in making decisions are more likely to have risk for loss in the decisions they are involved in]]. You will never fully convince someone that he is wrong; only reality can. ([Location 276](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=276)) - Note: Wisdom can not be passed from one person to the next. Only knowledge can. Some degree of suffering is needed to attain wisdom. The curse of modernity is that we are increasingly populated by a class of people who are better at explaining than understanding, or better at explaining than doing. So learning isn’t quite what we teach inmates inside the high-security prisons called schools. ([Location 279](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=279)) [[Via negativa]] Via negativa: the principle that we know what is wrong with more clarity than what is right, and that knowledge grows by subtraction. Also, it is easier to know that something is wrong than to find the fix. Actions that remove are more robust than those that add because addition may have unseen, complicated feedback loops. This is discussed in some depth in Antifragile. ([Location 309](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=309)) - Note: This reminds me of Karl Poppers theory of falsifiability. You can either prove a theory wrong or it hasn’t yet been proved wrong. ## New highlights added 01-01-2023 at 9:36 PM The well-known lex talionis, “an eye for one eye,” comes from Hammurabi’s rule. It is metaphorical, not literal: you don’t have to actually remove an eye—hence the rule is much more flexible than it appears at first glance. ([Location 339](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=339)) The Golden Rule wants you to Treat others the way you would like them to treat you. The more robust Silver Rule says Do not treat others the way you would not like them to treat you. More robust? How? Why is the Silver Rule more robust? First, it tells you to mind your own business and not decide what is “good” for others. We know with much more clarity what is bad than what is good. ([Location 363](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=363)) [[The Silver Rule]] via negativa (acting by removing) is more powerful and less error-prone than via positiva (acting by addition1 ([Location 367](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=367)) Immanuel Kant’s categorical imperative, which I summarize as: Behave as if your action can be generalized to the behavior of everyone in all places, under all conditions. ... Universal behavior is great on paper, disastrous in practice. Why? As we will belabor ad nauseam in this book, we are local and practical animals, sensitive to scale. The small is not the large; the tangible is not the abstract; the emotional is not the logical. ... In other words, Kant did not get the notion of scaling—yet many of us are victims of Kant’s universalism. ([Location 390](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=390)) Avoid taking advice from someone who gives advice for a living, unless there is a penalty for their advice. ([Location 428](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=428)) Those who talk should do and only those who do should talk ([Location 525](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=525)) Specialization, as I will keep insisting, comes with side effects, one of which is separating labor from the fruits of labor. ([Location 545](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=545)) - Note: This can cause design choices that are questionable as the person designing doesn’t understand what it’s like to be the user in the design. Things designed by people without skin in the game tend to grow in complication (before their final collapse). ([Location 550](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=550)) Skin in the game can make boring things less boring. When you have skin in the game, dull things like checking the safety of the aircraft because you may be forced to be a passenger in it cease to be boring. ([Location 559](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=559)) If you do not take risks for your opinion, you are nothing. And I will keep mentioning that I have no other definition of success than leading an honorable life. ([Location 611](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=611)) [[Honor implies that there are some actions you would categorically never do, regardless of the material rewards]]. ([Location 614](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=614)) honor means that there are things you would do unconditionally, regardless of the consequences. ([Location 616](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=616)) Now there is another dimension of honor: engaging in actions going beyond mere skin in the game to put oneself at risk for others, have your skin in other people’s game; sacrifice something significant for the sake of the collective. ([Location 627](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=627)) - Note: This reminds me of doing something greater than yourself. Anything you do to optimize your work, cut some corners, or squeeze more “efficiency” out of it (and out of your life) will eventually make you dislike it. ([Location 631](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=631)) ## New highlights added 04-01-2023 at 8:54 PM The ethical is always more robust than the legal. Over time, it is the legal that should converge to the ethical, never the reverse. Hence: Laws come and go; ethics stay. ([Location 960](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=960)) - Note: This reminds me of trust and honor being some of the most robust virtues there are. If you build a persona of being highly trustworthy and honorable than people will be much more willing to be long term business partners with you. You will build yourself a serendipity vehicle. Trust is the most valuable things there is. It’s what allows you to simplify the world. Not only should there be transparency concerning the merchandise, but perhaps there has to be transparency concerning what the seller has in mind, what he thinks deep down. ... Recall the rapacity of salespeople earlier in the chapter. Sometimes I would offer something for sale for, say, $5, but communicated with the client through a salesperson, and the salesperson would come back with an “improvement,” of $5.10. Something never felt right about the extra ten cents. It was, simply, not a sustainable way of doing business. What if the customer subsequently discovered that my initial offer was $5? No compensation is worth the feeling of shame. ... It may not be ethically required, but the most effective, shame-free policy is maximal transparency, even transparency of intentions. ([Location 997](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=997)) - Note: According to this way of selling, the most long term shame free way but not necessarily most profitable way of selling is by showing total transparency of intentions. This is why one of my most hard held virtues is honor. The more confined our ethics, the less abstract, the better it works. ([Location 1013](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=1013)) it is possible to be both ethical and universalist. In theory, yes, but, sadly, not in practice. For whenever the “we” becomes too large a club, things degrade, and each one starts fighting for his own interest. ([Location 1036](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=1036)) Being somewhat tribal is not a bad thing—and we have to work in a fractal way in the organized harmonious relations between tribes, rather than merge all tribes in one large soup. ([Location 1040](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=1040)) - Note: In some ways the family is the smallest unit of tribal organization and in cultures like the East, the strongest It is provided by the Rhodian Law that where merchandise is thrown overboard for the purpose of lightening a ship, what has been lost for the benefit of all must be made up by the contribution of all. And the same mechanism for risk sharing took place with caravans along desert routes. If merchandise was stolen or lost, all merchants had to split the costs, not just its owner. ([Location 1101](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=1101)) The legal system and regulatory measures are likely to put the skin of the doctor in the wrong game. How? The problem resides in the reliance on metrics. Every metric is gameable—the cholesterol lowering we mentioned in Prologue 1 is a metric-gaming technique taken to its limit. ([Location 1133](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=1133)) - Note: Doctors risk falling for goodhearts law by treating one isolated metric as a goal. Lower cholesterol, lower blood pressure, lower Saturated fat. This encourages them to prescribe many drugs to avoid legal trouble in the immediate short term in the unlikely event you drop dead immediately at the expense of your long term health which isn’t as noticeable. the solution, as I have argued in Antifragile and more technically elsewhere, is for the patient to avoid treatment when he or she is mildly ill, but use medicine for the “tail events,” that is, for rarely encountered severe conditions. ([Location 1157](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=1157)) The rule we discuss in this chapter is the minority rule, the mother of all asymmetries. [[The minority rule]]. ([Location 1198](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=1198)) - Note: This is why the Romans had to get rid of the Stoics when Christianity became the dominant religion. They knew that small philosophical minority could cause catastrophe to the whole. ## New highlights added 16-01-2023 at 8:09 PM A disabled person will not use the regular bathroom, but a nondisabled person will use the bathroom for disabled people. ([Location 1225](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=1225)) Someone with a peanut allergy will not eat products that touch peanuts, but a person without such an allergy can eat items with peanut traces in them. ([Location 1229](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=1229)) Outcomes are paradoxically more stable under the minority rule—the variance of the results is lower and the rule is more likely to emerge independently across separate populations. What emerges from the minority rule is more likely to be black-and-white, binary rules. ([Location 1465](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=1465)) - Note: This is why the minority role is often the reason for large paradigm shifts instead of the large majority. Science isn’t the sum of what scientists think, but exactly as with markets, it is a procedure that is highly skewed. Once you debunk something, it is now wrong. Had science operated by majority consensus, we would be still stuck in the Middle Ages, and Einstein would have ended as he started, a patent clerk with fruitless side hobbies. ([Location 1512](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=1512)) - Note: Scientific revolutions as discussed in Thomas Khan’s the structure of scientific revolutions, occur when a small minority detects a anomaly and fights for it. Understanding how the subparts of the brain (say, neurons) work will never allow us to understand how the brain works. A group of neurons or genes, like a group of people, differs from the individual components—because the interactions are not necessarily linear. So far we have no fing idea how the brain of the worm C. elegans works, which has around three hundred neurons. C. elegans was the first living unit to have its genes sequenced. Now consider that the human brain has about one hundred billion neurons, and that going from 300 to 301 neurons, because of the curse of dimensionality, may double the complexity. ([Location 1571](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=1571)) - Note: Rip neuroscience professor. ## New highlights added 16-01-2023 at 10:50 PM The procedure is as follows. Simply, you sit in an apparatus and a technician plugs a few cables into your brain, after which you undergo an “experience.” You feel exactly as if an event took place, except that it all happened in virtual reality; it was all mental. ([Location 2053](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2053)) Because, to repeat, life is sacrifice and risk taking, and nothing that doesn’t entail some moderate amount of the former, under the constraint of satisfying the latter, is close to what we can call life. If you do not undertake a risk of real harm, reparable or even potentially irreparable, from an adventure, it is not an adventure. ([Location 2056](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2056)) Now, one may argue: once inside the machine, you may believe that you have skin in the game, and experience the pains and consequences as if you were living the actual harm. But this is once inside, not outside, and there is no risk of irreversible harm, things that linger and make time flow in one direction not the other. The reason a dream is not reality is that when you suddenly wake up from falling from a Chinese skyscraper, life continues, and there is no absorbing barrier, ([Location 2059](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2059)) - Note: I disagree with Talebs point that you can’t have true risks take place in a virtual setting. He says while you might feel like you have skin in the game while playing, just like in a dream, when you come out of the exercise you realize you didn’t. But this assumes the virtual exercise has no enduring effect in the real world. What if your in a situation like SAO where dying kills your in real life. people resent—or should resent—is the person at the top who has no skin in the game, that is, because he doesn’t bear his allotted risk, he is immune to the possibility of falling from his pedestal, exiting his income or wealth bracket, and waiting in line outside the soup kitchen. ([Location 2200](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2200)) Static inequality is a snapshot view of inequality; it does not reflect what will happen to you in the course of your life. ([Location 2223](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2223)) Dynamic (ergodic) inequality takes into account the entire future and past life. You do not create dynamic equality just by raising the level of those at the bottom, but rather by making the rich rotate—or by forcing people to incur the possibility of creating an opening. ([Location 2230](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2230)) The way to make society more equal is by forcing (through skin in the game) the rich to be subjected to the risk of exiting from the 1 percent.4 ([Location 2234](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2234)) Our condition here is stronger than mere income mobility. Mobility means that someone can become rich. The no-absorbing-barrier condition means that someone who is rich should never be certain to stay rich. ([Location 2237](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2237)) - Note: Economic mobility isn’t the same as dynamic equality. ## New highlights added 19-01-2023 at 8:25 PM Aristotle, in his Rhetoric, postulated that envy is something you are more likely to encounter in your own kin: lower classes are more likely to experience envy toward their cousins or the middle class than toward the very rich. ([Location 2311](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2311)) - Note: Social comparison is more likely to happen with those I’m our environment. This is why the plots hatred of the rich is less prominent than people believe. ## New highlights added 22-01-2023 at 8:24 AM Lindy is a deli in New York, now a tourist trap, that proudly claims to be famous for its cheesecake, but in fact has been known for fifty or so years by physicists and mathematicians thanks to the heuristic that developed there. Actors who hung out there gossiping about other actors discovered that Broadway shows that lasted for, say, one hundred days, had a future life expectancy of a hundred more. For those that lasted two hundred days, two hundred more. The heuristic became known as the Lindy effect. Let me warn the reader: while the Lindy effect is one of the most useful, robust, and universal heuristics I know, Lindy’s cheesecake is…much less distinguished. Odds are the deli will not survive, by the Lindy effect. ([Location 2431](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2431)) - Note: I should talk about this in a speech and debate impromptu tournament as an example lol While our knowledge of physics was not available to the ancients, human nature was. So everything that holds in social science and psychology has to be Lindy-proof, that is, have an antecedent in the classics; otherwise it will not replicate or not generalize beyond the experiment. ([Location 2596](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2596)) - Note: Psychological principles which showed themselves in the writings of the ancients are likely to have some merit because they have survived lots of time. Cognitive dissonance (a psychological theory by Leon Festinger about sour grapes, by which people, in order to avoid inconsistent beliefs, rationalize that, say, the grapes they can’t reach got to be sour). It is seen first in Aesop, of course, repackaged by La Fontaine. ([Location 2605](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2605)) Loss aversion (a psychological theory by which a loss is more painful than a gain is pleasant): in Livy’s Annals (XXX, 21) Men feel the good less intensely than the bad.6 Nearly all the letters of Seneca have some element of loss aversion. ([Location 2608](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2608)) Negative advice (via negativa): We know the wrong better than what’s right; recall the superiority of the Silver over the Golden Rule. The good is not as good as the absence of bad,7 Ennius, repeated by Cicero. ([Location 2611](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2611)) [[Madness of crowds]]. ([Location 2622](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2622)) The Paradox of progress, and the paradox of choice: There is a familiar story of a New York banker vacationing in Greece, who, from talking to a fisherman and scrutinizing the fisherman’s business, comes up with a scheme to help the fisherman make it a big business. The fisherman asked him what the benefits were; the banker answered that he could make a pile of money in New York and come back to vacation in Greece; something that seemed ludicrous to the fisherman, who was already there doing the kind of things bankers do when they go on vacation in Greece. ([Location 2629](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2629)) - Note: Humans tend to see progress as an inherent good without realizing sometimes progress can take away the very good things about something. I resonate with this as a content creator thinking about my business running ahead of me. Say you had the choice between two surgeons of similar rank in the same department in some hospital. The first is highly refined in appearance; he wears silver-rimmed glasses, has a thin build, delicate hands, measured speech, and elegant gestures. His hair is silver and well combed. He is the person you would put in a movie if you needed to impersonate a surgeon. His office prominently boasts Ivy League diplomas, both for his undergraduate and medical schools. ([Location 2678](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2678)) The second one looks like a butcher; he is overweight, with large hands, uncouth speech, and an unkempt appearance. His shirt is dangling from the back. No known tailor on the East Coast of the U.S. is capable of making his shirt button at the neck. He speaks unapologetically with a strong New Yawk accent, as if he wasn’t aware of it. He even has a gold tooth showing when he opens his mouth. The absence of diplomas on the wall hints at the lack of pride in his education: he perhaps went to some local college. ([Location 2681](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2681)) Now if I had to pick, I would overcome my sucker-proneness and take the butcher any minute. ([Location 2686](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2686)) When results come from dealing directly with reality rather than through the agency of commentators, image matters less, even if it correlates to skills. But image matters quite a bit when there is hierarchy and standardized “job evaluation.” ([Location 2691](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2691)) - Note: If someone succeeds in a venture without looking the part, they likely are incredibly skilled because otherwise they wouldn’t likely have survived that long. This is why I think when the job your aiming for deals directly with results, the Ivy League education doesn’t matter nearly as much. If you don’t have the skills to go along with the paper, why would it matter.z So the next time you randomly pick a novel, avoid the one with the author photo representing a pensive man with an ascot standing in front of wall-to-wall bookshelves. By the same reasoning, and flipping the arguments, skilled thieves at large should not look like thieves. Those who do are more likely to be in jail. ([Location 2704](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2704)) The idea of this chapter is Lindy-compatible. Don’t think that beautiful apples taste better, goes the Latin saying.1 This is a subtler version of the common phrase “all that glitters is not gold”—something ([Location 2712](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2712)) [[Never pay for complexity of presentation when all you need is results]]. ([Location 2777](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2777)) Alexander the Magnus was once called to solve the following challenge in the Phrygian city of Gordium (as usual with Greek stories, in modern-day Turkey). When he entered Gordium, he found an old wagon, its yoke tied with a multitude of knots, all so tightly entangled that it was impossible to figure out how they were fastened. An oracle had declared that he who would untie the knot would rule all of what was then called “Asia,” that is, Asia Minor, the Levant, and the Middle East. After wrestling with the knot, the Magnus drew back from the lump of gnarled ropes, then made a proclamation that it didn’t matter for the prophecy how the tangle was to be unraveled. He then drew his sword and, with a single stroke, cut the knot in half. ([Location 2778](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2778)) - Tags: #blue It took medicine a long time to realize that when a patient shows up with a headache, it is much better to give him aspirin or recommend a good night’s sleep than do brain surgery, ([Location 2784](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2784)) - Note: Medicine is best done in times of severe accidents or health problems. This is because slight bad health makes you Antifragile. The heuristic here would be to use education in reverse: hire, conditional on an equal set of skills, the person with the least label-oriented education. It means that the person had to succeed in spite of the credentialization of his competitors and overcome more serious hurdles. In addition, people who didn’t go to Harvard are easier to deal with in real life. ([Location 2859](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2859)) This education labeling provides a lot of cosmetic things but misses something essential about antifragility and true learning, reminiscent of gyms. People are impressed with expensive equipment—fancy, complicated, multicolored—meant to look as if it belonged on a spaceship. Things appear maximally sophisticated and scientific—but remember that what looks scientific is usually scientism, not science. As with label universities, you pay quite a bit of money to join, largely for the benefit of the real estate developer. Yet people into strength training (those who are actually strong across many facets of real life) know that users of these machines gain no strength beyond an initial phase. By having recourse to complicated equipment that typically targets very few muscles, regular users will eventually be pear-shaping and growing weaker over time, with skills that do not transfer outside of the very machine that they trained on. ([Location 2868](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2868)) And if gyms should not look like gyms, exercise should not look like exercise. Most gains in physical strength come from working the tails of the distribution, close to your limit. ([Location 2882](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2882)) while the presence of skin in the game does away with the cosmetic, its absence causes multiplicative nonsense. ([Location 2885](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2885)) People can only be social friends if they don’t try to upstage or outsmart one another. Indeed, the classical art of conversation is to avoid any imbalance, as in Baldassare Castiglione’s Book of the Courtier: people need to be equal, at least for the purpose of the conversation, otherwise it fails. It has to be hierarchy-free and equal in contribution. You’d rather have dinner with your friends than with your professor, unless of course your professor understands “the art” of conversation. ([Location 2943](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2943)) - Note: To be true social friends with someone it’s hard if there is a clear imbalance in learning, status, or money. This reminds me of the beautiful mess effect. I often feel the only way to make conversation with among some of my Cornell friends is to feign being more of a mess than I am. If I had a choice between paying $200 for a pizza or $6.95 for the French complicated experience, I would readily pay $200 for the pizza, plus $9.95 for a bottle of Malbec wine. Actually I would pay to not have the Michelin experience. ... And I am certain that if pizza were priced at $200, the people with corks plugged in their behinds would be lining up for it. But it is too easy to produce, so they opt for the costly, and pizza with fresh natural ingredients will be always cheaper than the complicated crap. ([Location 2953](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=2953)) - Note: The richer you are there more constructed your preferences can become as a result of the increased affordances you have to do things. You feel you have to do something with all that money. We used to live in small communities; our reputations were directly determined by what we did—we were watched. Today, anonymity brings out the ahole in people. So I accidentally discovered a way to change the behavior of unethical and abusive persons without verbal threat. Take their pictures. Just the act of taking their pictures is similar to holding their lives in your hands and controlling their future behavior thanks to your silence. ([Location 3046](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3046)) - Note: People act differently when they think they are being watched. This is despite the fact that I believe real virtue is doing the right thing regardless of if you are being watched or not. ## New highlights added 23-01-2023 at 9:03 PM You can criticize either what a person said or what a person meant. The former is more sensational, hence lends itself more readily to dissemination. ([Location 3129](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3129)) - Note: You must discuss peoples ideas, not their character. It is impossible for anyone to write a perfectly rationally argued document without a segment that, out of context, can be transformed by some dishonest copywriter ([Location 3134](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3134)) If your private life conflicts with your intellectual opinion, it cancels your intellectual ideas, not your private life. ([Location 3207](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3207)) If your private actions do not generalize, then you cannot have general ideas. ([Location 3210](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3210)) From the scaling property, we can safely establish that virtue is doing something for the collective, particularly when such an action conflicts with your narrowly defined interests. Virtue isn’t in just being nice to people others are prone to care about. So true virtue lies mostly in also being nice to those who are neglected by others, the less obvious cases, those people the grand charity business tends to miss. ([Location 3257](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3257)) Courage is the only virtue you cannot fake. ([Location 3264](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3264)) Finally, when young people who “want to help mankind” come to me asking, “What should I do? I want to reduce poverty, save the world,” and similar noble aspirations at the macro-level, my suggestion is: 1) Never engage in virtue signaling; 2) Never engage in rent-seeking; 3) You must start a business. Put yourself on the line, start a business. Yes, take risk, and if you get rich (which is optional), spend your money generously on others. ([Location 3275](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3275)) Courage (risk taking) is the highest virtue. We need entrepreneurs. ([Location 3283](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3283)) - Note: Entrepreneurs are the people with the highest skin in the game. [[Entrepreneurs are the people with the highest skin in the game.]]. History is largely peace punctuated by wars, rather than wars punctuated by peace. The problem is that we humans are prone to the availability heuristic, ([Location 3339](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3339)) We are fed a steady diet of histories of wars, fewer histories of peace. ([Location 3346](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3346)) these scholars, as non–rocket scientists, fail to get a central mathematical property, confusing intensity with frequency. ([Location 3353](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3353)) - Note: This reminds me of the note in fooled by randomness that the absolute value of a change is more important than the frequency of that change. Gaining money 351 days of the year and losing one day isn’t good if the money gained over the 351 days was one cent. What to read? It would not cure the via negativa problem, but, for a start, instead of studying Roman history in terms of Caesar and Pompey, or Peloponnesian balances of power or diplomatic intrigues in Vienna, consider studying instead the daily life and body of laws and customs. ([Location 3401](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3401)) - Note: Reading texts documenting the daily life of citizens in society is likely to give you a more representative notion for what life was like in those civilizations during the time. In describing international affairs historians can get caught up focusing on interesting things like the infrequent wars during peace instead of the daily life of citizens. Two people can be using the same word, meaning different things, yet continue the conversation, which is fine for coffee, but not when making decisions, particularly policy decisions affecting others. ([Location 3422](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3422)) - Note: To have a productive conversation your labels must align with the person your speaking to. beware labels when it comes to matters associated with beliefs. And avoid treating religions as if they are all the same animal. ([Location 3491](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3491)) - Note: Labels especially for beliefs can mean different things between people. The label is just the map of the territory. Not the territory itself. Survival comes first, truth, understanding, and science later. In other words, you do not need science to survive (we’ve survived for several hundred million years or more, depending on how you define the “we”), but you must survive to do science. As your grandmother would have said, better safe than sorry. ([Location 3649](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3649)) the concept casually dubbed “rational” is ill-defined, in fact so ill-defined that many uses of the term are just gibberish. ([Location 3682](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3682)) Judging people by their beliefs is not scientific. ([Location 3686](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3686)) There is no such thing as the “rationality” of a belief, there is rationality of action. ([Location 3687](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3687)) [[The rationality of an action can be judged only in terms of evolutionary considerations]]. ([Location 3688](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3688)) I have shown in Antifragile that 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. ([Location 3699](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3699)) - Note: Traditional perceptions of rationality look at beliefs and actions in a vaccuum. But ultimately rationality is more about how beliefs and decisions aid survival in the long term. Evolution is the king. If a belief or action was truly irrational evolution would have erased it in the long term. How much you truly “believe” in something can be manifested only through what you are willing to risk for it. ([Location 3734](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3734)) 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. ([Location 3745](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3745)) Consider a competitor to the Pope’s religion, Judaism. Jews have close to five hundred different dietary interdicts. These may seem irrational to an outsider ... The Jewish kashrut prescribes keeping four sets of dishes, two sinks, the avoidance of mixing meat with dairy products or merely letting the two be in contact with each other, in addition to interdicts on some animals: shrimp, pork, etc. ... But it remains the case that whatever their purpose, kashrut laws survived several millennia not because of their “rationality” but because the populations that followed them survived. It most certainly brought cohesion: people who eat together hang together. ([Location 3757](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3757)) - Note: The Jewish dietary practices are an example of rational beliefs and practices commonly deemed irrational. People on the outside see the practices as needless. But over time the beliefs and practices have survived because those with them eat together keeping them going. Therefore by Taleb’s definition, it’s perfectly rational. Rationality does not depend on explicit verbalistic explanatory factors; it is only what aids survival, what avoids ruin. ([Location 3769](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3769)) - Note: The lindy effect causes rational beliefs and practices to stay and irrational ones to go away. ## New highlights added 25-01-2023 at 8:03 AM just about everything in social science having to do with probability is flawed. Deeply flawed. Very deeply flawed. ([Location 3809](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3809)) almost all people involved in the field have made the severe mistake of missing the effect of the difference between ensemble and time.1 ([Location 3811](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3811)) To take stock: a situation is deemed non-ergodic when observed past probabilities do not apply to future processes. There is a “stop” somewhere, an absorbing barrier that prevents people with skin in the game from emerging from it—and to which the system will invariably tend. Let us call these situations “ruin,” as there is no reversibility away from the condition. The central problem is that if there is a possibility of ruin, cost-benefit analyses are no longer possible. ([Location 3833](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3833)) Consider a more extreme example than the casino experiment. Assume a collection of people play Russian roulette a single time for a million dollars—this is the central story in Fooled by Randomness. About five out of six will make money. If someone used a standard cost-benefit analysis, he would have claimed that one has an 83.33 percent chance of gains, for an “expected” average return per shot of $833,333. But if you keep playing Russian roulette, you will end up in the cemetery. Your expected return is…not computable. ([Location 3836](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3836)) The flaw in psychology papers is to believe that the subject doesn’t take any other tail risks anywhere outside the experiment and, crucially, will never again take any risk at all. ([Location 3861](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3861)) Courage is when you sacrifice your own well-being for the sake of the survival of a layer higher than yours. ([Location 3917](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3917)) Never compare a multiplicative, systemic, and fat-tailed risk to a non-multiplicative, idiosyncratic, and thin-tailed one. ([Location 3944](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3944)) Rationality is avoidance of systemic ruin. ([Location 3979](https://readwise.io/to_kindle?action=open&asin=B075HYVP7C&location=3979))