https://runesoup.com/2018/03/review-skin-in-the-game/
Worth sharing in full, given some of the comments within these walls, and elsewhere, of late.
REVIEW: SKIN IN THE GAME
Calling everything problematic has itself become too problematic at this point in the timeline. The puritanism washing over discourse (at least online) risks swamping some ideas that it may become essential to think with if we are to make it through the Fourth Turning.
Nassim Taleb is probably the perfect example of this, but then I imagine so was Giordano Bruno (whom Taleb reminds me of greatly) in his day as well.
If you follow either Nassim Taleb or Dr Mary Beard on Twitter, you will probably be aware that they had a very public and very personal spat last year. This began when Dr Beard described a sequence in a children's BBC program about the Roman Empire in Britain as "pretty accurate". The sequence depicted at least one black African legionary. Note that she said accurate rather than representative. Because it is accurate. We have black African bones in Roman graves in York to prove it. The legions were probably far from a Benetton ad but they certainly weren't 'Italian only'. I can only assume Taleb thought she meant representative and began a tweet storm of genetic data research around the population make up of North Africa during the classical age (ie more 'Med' than 'black' for whatever difference that makes). This is all cutting-edge and slightly fascinating research, but it didn't really rebut Dr Beard's statement around accuracy rather than representation. So they were both right, which is probably why neither of them backed down.
Unfortunately, Dr Beard too quickly fell back on the logical fallacy of argument from authority, reminding Taleb that he is not an historian. This is the reddest rag to the most bullish bull. It was off to the races after that and, quite frankly neither of them especially covered themselves in glory, although Taleb was certainly the most offensive of the two.
It's not clear to me, however, that refusing to read his book because of this punishes anyone other than ourselves. He certainly doesn't need the money from the book sales. That's what I mean about the new puritanism with its guilt by association and trial by accusation. Be careful you're not harming yourself via public displays of morality (covered in Skin in the Game, actually). If you want to read it, read it.
Skin in the Game is easily the most accessible of Taleb's books, to the point that you may want to start with this one and read in reverse chronological order. It is the tightest and the shortest, which is actually what you should expect from a book that took the longest to write. Compare this to Antifragile, which I have literally used as a doorstop in my old London townhouse. Not only is it the most accessible, it is also something of a joy to read. It has the breezy emotionality of a self published book. Taleb veers from personal rants about people he doesn't like to explorations of classical philosophy to restaurant anecdotes without pausing for a breath. Strap yourself in.
It is the most personal of his books, although it feels as if he is still holding a lot of himself back. For instance, he damns the spiritual with faint praise which is somewhat surprising -Taleb is a regular Orthodox churchgoer- and you get the sense that this is a deliberate move to convince the naïve materialists that religion has at least some value, rather than a full exploration or exhortation of higher-order meaning into one's life.
Similarly I suspect there is a more nuanced view of the limitations of empiricism beyond the tired "science can only tell us one kind of truth". But he is holding back because The Incerto -the name of his full book series- is a polemic with a different, very specific fish to fry; focusing instead on risk reduction and seeing the world more clearly. That said, there is still some value in Taleb's depiction of the pros and cons of the scientific process:Karl Popper’s idea of science is an enterprise that produces claims that can be contradicted by eventual observations, not a series of verifiable ones: science is fundamentally disconfirmatory, not confirmatory. This mechanism of falsification is entirely Lindy-compatible; it actually requires the operation of the Lindy effect (in combination with the minority rule). Although Popper saw the statics, he didn’t study the dynamics, nor did he look at the risk dimension of things. The reason science works isn’t because there is a proper “scientific method” derived by some nerds in isolation, or some “standard” that passes a test similar to the eye exam of the Department of Motor Vehicles; rather it is because scientific ideas are Lindy-prone, that is, subjected to their own natural fragility. Ideas need to have skin in the game. You know an idea will fail if it is not useful, and can be therefore vulnerable to the falsification of time (and not that of naive falsificationism, that is, according to some government-printed black-and-white guideline). The longer an idea has been around without being falsified, the longer its future life expectancy. For if you read Paul Feyerabend’s account of the history of scientific discoveries, you can clearly see that anything goes in the process—but not with the test of time. That appears to be nonnegotiable. Note that I am here modifying Popper’s idea; we can replace “true” (rather, not false) with “useful,” even “not harmful,” even “protective to its users.” So I will diverge from Popper in the following. For things to survive, they necessarily need to fare well in the risk dimension, that is, be good at not dying. By the Lindy effect, if an idea has skin in the game, it is not in the truth game, but in the harm game. An idea survives if it is a good risk manager, that is, not only doesn’t harm its holders, but favors their survival—this also applies to superstitions that have crossed centuries because they led to some protective actions. More technically, an idea needs to be convex (antifragile), or at least bring about a beneficial reduction of fragility somewhere.
This is all very good analysis, but it felt to me like insufficient time was given to range-binding empiricism as a collection of techniques that are necessarily a subset of a worldview. He maybe devotes a couple of paragraphs to it which -from experience- is just not a big enough stick to keep people away from a low resolution utilitarianism and/or pragmatism, or even just the dull notion that it is the One Epistemology to Rule Them All.
As you might expect, his argument against interventionism is flawless. He backs it up with examples from neoliberal geopolitics and GMOs, among other such domains:Peace from the top differs from real peace: consider that today’s Morocco, Egypt, and to some extent Saudi Arabia, with more or less overtly pro-Israeli governments (with well-stocked refrigerators full of nonalcoholic fermented drinks such as yoghurt), have local populations conspicuously hostile to Jews. Compare this to Iran, with a local population that is squarely pro-Western and tolerant of Jews. Yet some people with no skin in the game who have read too much about the Treatise of Westphalia (and not enough on complex systems) still insist on conflating relations between countries with relations between governments.
And while I did not especially enjoy his fight with Dr Mary Beard last year (for me it was like watching parents argue) I freely admit to relishing the moments where he turns his ire on the Intellectual Yet Idiots that I also have zero time for, especially Stephen Pinker (whom I remind you will one day turn out to be CIA).[T]hese scholars, as non–rocket scientists, fail to get a central mathematical property, confusing intensity with frequency. In the five centuries preceding the unification of Italy, there was supposed to be “a lot of warfare” ravaging the place. Therefore, many of these scholars insist, unification “brought peace.” But more than six hundred thousand Italians died in the Great War, during the “period of stability,” almost one order of magnitude higher than all the cumulative fatalities in the five hundred years preceding it. Many of the “conflicts” that took place between states or statelings were between professional soldiers, often mercenaries, and much of the population was unaware of them. Now, in my experience, after presenting these facts, I am almost always confronted with “Still, there were more wars and instability.” This is the Robert Rubin trade argument, that trades that lose money infrequently are more stable, even if they end up eventually wiping you out.
SYSTEMS (OR EVEN ECOSYSTEMIC) THEORY
Obviously, this part is excellent. As you probably know, Taleb's treatment of complexity has had a large impact on my own cosmology or roadmap or attitude and its treatment in Skin in the Game is the best yet. Once again, you see the mathematical reasoning for being noninterventionist and anti-GMO, but it is presented in a way that the nonmathematical can understand. Somewhere in here is a big part of the theoretical framework needed to construct an urgently needed, post-imperial version of ecology.The main idea behind complex systems is that the ensemble behaves in ways not predicted by its components. The interactions matter more than the nature of the units. Studying individual ants will almost never give us a clear indication of how the ant colony operates. For that, one needs to understand an ant colony as an ant colony, no less, no more, not a collection of ants. This is called an “emergent” property of the whole, by which parts and whole differ because what matters are the interactions between such parts. And interactions can obey very simple rules.
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[P]eople don’t learn so much from their—and other people’s—mistakes; rather it is the system that learns by selecting those less prone to a certain class of mistakes and eliminating others. Systems learn by removing parts, via negativa. Many bad pilots, as we mentioned, are currently in the bottom of the Atlantic, many dangerous bad drivers are in the local quiet cemetery with nice walkways bordered by trees. Transportation didn’t get safer just because people learn from errors, but because the system does. The experience of the system is different from that of individuals; it is grounded in filtering.
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[A] system that doesn’t have a mechanism of skin in the game, with a buildup of imbalances, will eventually blow up and self-repair that way. If it survives.
There is a lot of good and one or two bum notes when he extends his understanding of complexity to solving for economic inequality. His description only really works if you stand far enough back from "the 1%" to see them as a unified group, and I can only assume this is deliberate given his professional background. But, as you are likely aware by now, any analysis that fails to at least consider the conspiratorial is necessarily incomplete. Both the extreme tail risk and real perpetuation of oligarchic corruption is in the 0.001%, where you have royalty, families that own Fed member banks, etc. These are fundamentally different from the "1%" which includes rural dentists, small business people and so on. Nevertheless there is a lot to think with around his focus on extinction rather than elevation as an economic solve for inequality:Static inequality is a snapshot view of inequality; it does not reflect what will happen to you in the course of your life. Consider that about 10 percent of Americans will spend at least a year in the top 1 percent, and more than half of all Americans will spent a year in the top 10 percent. This is visibly not the same for the more static—but nominally more equal—Europe. For instance, only 10 percent of the wealthiest five hundred American people or dynasties were so thirty years ago; more than 60 percent on the French list are heirs and a third of the richest Europeans were the richest centuries ago. In Florence, it was just revealed that things are even worse: the same handful of families have kept the wealth for five centuries. 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. 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. 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.
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True equality is equality in probability. and Skin in the game prevents systems from rotting.
PERSONAL RISK AND PROBABILITY
Of all his books, you get the most real-world implementation guidance in Skin in the Game. (Unless you happen to be a Wall Street trader, in which case, I guess Antifragile?)Anyone who has survived in the risk-taking business more than a few years has some version of our by now familiar principle that “in order to succeed, you must first survive.” My own has been: “never cross a river if it is on average four feet deep.”
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The central problem is that if there is a possibility of ruin, cost-benefit analyses are no longer possible. 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.
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[T]hings are even worse: in real life, every single bit of risk you take adds up to reduce your life expectancy. If you climb mountains and ride a motorcycle and hang around the mob and fly your own small plane and drink absinthe, and smoke cigarettes, and play parkour on Thursday night, your life expectancy is considerably reduced, although no single action will have a meaningful effect. This idea of repetition makes paranoia about some low-probability events, even that deemed “pathological,” perfectly rational. Further, there is a twist. If medicine is progressively improving your life expectancy, you need to be even more paranoid. Think dynamically.
The last couple of years of following Taleb on Twitter and Medium and watching his rare video interviews have meant Skin in the Game didn't rock my world to the core the way Antifragile did. Which isn't to say the same thing won't happen for you. I just already knew a lot of what was in it. (I remember at one stage last year he released about twenty pages of the book on Twitter and then took it down less than a day later when his publisher noticed.)
There's more of the 'metaphysics' of randomness from a practical enchantment perspective in Antifragile but if you're looking for a book to dramatically improve your day to day understanding of risk and complexity -both essential for something like sigil magic, obviously- then this is not only informative, it is also a wild, angry, funny ride.
