How to be authentic: Have skin in the game

This is just a collection and a re-post of a summary of Nassim Taleb's book "Skin in the Game" by Douglas9162. The original Twitter thread is here.

"[Skin in the game] SITG is about 4 things: uncertainty, symmetry in human affairs, information in transacations and rationality in complex systems. These 4 are best solved through SITG"

1. If you want the upside, you must also take the risk of downside (bankers being bailed out by the public are the antithesis of SITG) 
2. Opinion’s are BS generally, unless someone lives/is exposed to the risks of that opinion it is invalid
3. SITG isn’t purely incentives, it is symmetry in upside and downside. It is also about justice, honor and sacrifice.
4. Having exposure to the real world, with upside and downside, is the only way to learn properly (‘pathemata mathemata’ – guide your learning through pain)
5. EXPOSURE TO REAL WORLD CONSEQUENCES >>> Intellectualising (despite what academia tells us)
6. Think in dynamics, not statics. Think in high, not low dimensions. Think in terms of interactions as well as actions.
7. “what is crucial here is that the downside doesn’t affect the interventionist. He continues his practice from the comfort of his thermally regulated suburban house, with a two car garage, a dog, a small play area with pesticide free grass and his overprotected 2.2 kids” LOL
8. Intelligentsia have no downside for their actions (no SITG) so should be avoided like the plague.
9. Its much easier to MACRO bullshit than Micro bullshit. E.g. people who are cool on social media are depressing in real life. Marketing people should focus on macro therefore, as micro BSing is far harder.
10. government intervention is general tends to remove SITG
11. You will never convince someone that he is wrong, only reality can. ALL people should be at risk of all downside to their decisions.
12. There is no evolution without skin in the game – note how academics can be wrong for so long while businesses cannot
13. SITG doesn’t literally mean an eye for an eye – it just means there is a downside large enough to individuals to protect the overall system.
14. We know far more what is bad than what is good. Therefore, when treating others: no bad actions > good actions as a rule.
15. Universal behavior is great on paper, disastrous on paper. Behaviour does not scale. Family are not friends and random people on the street are not friends. I may jokingly call my friend a “dickhead” as endearment, this doesn’t scale well
16. Avoid taking advice from someone who gives advice for a living, unless there is a penalty for their advice.
17. The doer wins by doing, not convincing. E.g. if someone is trying to convince you how cool their life is then it is not cool
18. How often you forecast correctly is unimportant, it is which outcomes you can forecast right which matters.
19. SITG helps solve the black swan problem as that which has survived over time with SITG has proved its robustness
20. There are some risks we just cannot afford to take (systemic risks). There are some risks we cannot afford to NOT take.
21. SITG is mainly a bullshit filter for professionally slanted people
22. Theories are fine, just don’t tell people how to apply them. People with SITG decide what theories they need.
23. people with SITG bring simplicity. People with SITG have no benefit for added complexity. Therefore be careful of people without SITG proposing complex solutions for a problem. They have incentive to seem sophisticated instead of just solving the actual problem
24. SITG adds interest to the normally boring. If you know that your repairs to a plane are needed for the safety of 200 people and a small child you have every incentive to get it right. While the repair may seem boring in isolation, with SITG its interesting(ish)
25. Risk focuses the brain, if you can muster the speed to run from a fire you can replicate this again. Anti fragility
26. Systemic risks are likely the most useful place for regulation
27. If you do not take risks for your opinion you are nothing
28. people that rationalize having dishonorable jobs (e.g. lobbyists) with the argument “I have kids to put kids through college” are pricks
29. The more you focus on optimization of your work, the more you will dislike it
30. Advice from Yossi Vardi – never have an assistant. It weakens your natural filtering. Assistance moves you one step away from authenticity
31. Companies with the owner’s name convey a strong message -  that they are willing to put their name on the line
32. people who write about ethics without having lived them are useless, look for people who have/had SITG then decided to write about it e.g. Montaigne
33. Whenever there is a mismatch with bonus period (1 year) and statistical blowup (10 years) people will transfer as much risk as possible to the future.
34. Taleb learned Akkadian to read Hammurabi’s law with Semitic phonetics just so he would be qualified to discuss it in his book. This is soul in the game
35. “I didn’t do mathematics to solve a problem, just to satisfy a fixation”, the perfect entrepreneur doesn’t care about anything except to satisfy a fixation. E.g. Musk just wants to go to fucking Mars, nothing will stop him. Fixations + SITG are antifragile
36. learning is rooted in repetition and convexity, reading one book twice is more useful than two books once.
37. professional reviwers tend to want to impress other reviewers while normal people just say their opinions, so be careful of professional reviewers as they have a lack of SITG
38. Plenius aequo Laudat venalis qui vult extrudere merces – one lauds merrily the mechandide to get rid of it. Be careful of information asymmetries
39. on selling ethically: ‘you can give advice, or you can sell (by advertising the quality of the product), and the two need to be kept separate’
40. Laws come and go, ethics stay
41. counterintuitively, the more regulations, the easier it was to make money. Careful of people who want more regualtions as they have incentive to complexify it so they are more needed.
42. No person in a transaction should have certainty about the outcome while the other one has uncertainity
43. it may not be ethically required, but the most effective, shame-free policy is maximal transparency, even transparency of intentions.
44. for when the “we” becomes too large a club, things degrade and each one starts fighting for his own interest.
45. I am, at the fed level, Libertarian; at the state level, republican; at the local level, Democrat; at the family and friends level, a socialist.
46. The most reliable advocate for a product is its user.
47. Every metric is gameable, be very careful how metrics are used in performance.
48. The most intolerant group tends to always win. Why we eat Halal in UK despite Muslim population is only 4%ish. Society evolves by the intolerant minority.
49. The average behavior of the market participant will not allow us to understand the general behavior of the market
50. freedom entails risks, real skin in the game. Freedom is never free
51. people who depend on their reputation within a coorporation are the most fragile
52. manners don’t matter if you are profitable, can be seen in footballers – Suarez bit someone yet still scores so no one cares. This is antifragile.
53. it’s easy to spin a story that it is easier to continue than to stop (when making a bad choice)
54. Being ethical can come at a huge cost to others, people hope Snowden like people don’t have kids so then they are individual martyrs. However this is perverse.
55. by minority rule it takes very few detractors to scare an institution into firing you by using certain buzzwords regardless of whether they are true, e.g. XYZist
56. if you go into politics have no friends.
57. Scars signal skin in the game
58. label driven, highly educted people who tell us: what to do, what to eat, how to speak, how to think, whom to vote for are IYIs and should be avoided.
59. IYIs don’t really exist that often in real life which is good
60. There is something respectable in losing a billion dollars, provided it is your own money. Winning > Losing >>> not even trying
61. No downside for some means no upside for the rest.
62. Data =/= rigor
63. When people win they have short explanations, when they lose they have long ones
64. Lindy effect; the longer something sticks around, the longer it will stick around in the future. E.g. the bible will still be around in 2000 years, whats top of the NYT book list now wont be. Very useful heuristic for many things
65. Don’t ask whether it makes sense, ask does it work
66. you can define a free person precisely as someone whose fate is not centrally or directly dependent on peer assessment.
67. change for the sake of change is frequently the enemy of progress (inverse of lindy effect)
68. The good is not as good as the absence of bad
69. People who are easy to understand are more likely to be BSers, complex people more likely to be truthful
70. True intellect should not appear intellectual
71. Never pay for complexity of presentation when all you need is results
72. The mere fact than an evaluation causes you to be judged not by the end result, but by some intermediary metric that invites you to look sophisticated, brings some distortions.
73. It costs a lot of energy to pretend you are not bored
74. If wealth is giving you fewer options instead of more, you are doing it wrong
75. ‘Verbal Threats reveal nothing beyond weakness and unreliability’ Either act or don’t.
76. if we don’t understand something and it has systematic effect, just avoid it
77. You can criticize what a person said or what a person meant. One is honorable, the other is embarrassing
78. virtue is what you do when NOBODY is looking. Virtue is not something you advertise.
79. courage is the only virtue you cannot fake
80. people on the ground, those with skin in the game, are not too interested in geopolitics or grand abstractions, but rather in having bread on the table.
81. We are largely collaborative except when institutions get in the way.
82. Relations between countries =/= relations between governments. Half my friends are Russian despite the fact I’m supposed to hate them for ‘hacking the election’
83. In the jungle, there are very few predators compared to collaborative animals. Humans are the same.
84. people who derive all their knowledge from books, live in a fantasy world - why a lot of historical books are BS
85. Beware labels when it comes to matters associated with beliefs, and avoid comparing all rellgions as if they are the same (they aren’t)
86. SITG is necessary in worshippers. Belief without sacrifice (acts as proof of belief) makes little sense.
87. People who denounce religion as whacky and ritualistic also meditate every day and attend concerts in awe. When you think about it everyone has some sort of ritualistic gestures they do.
88. There is a section called “ocular deception” which is my new way to describe Instagram and facebook
89. survival comes first, truth, understanding, and science later.
90. rationality does not superficially look like rationality.
91. you do not need science to survive but you must survive to do science
92. judging people by their beliefs is not scientific
93. the rationality of an action can be judged only in terms of evolutionary considerations
94. Taleb believes religion exists to enforce tail risk management across generations, as its rules are easy to teach and enforce
95. It is incoherent to criticise someones superstitions if they are to bring some benefits
96. situation is considered non ergodic when observed past probabilities do not apply to future processes.
97. my death is never the worse outcome unless it correlates to that of others. Survival of the system is most important.
98. courage is when you sacrifice your own well being for the sake of the survival of a layer higher than yours in the system.
99. volatile things are not necessarily risky, and the reverse is also true. Risk and ruin are different things
100. one may be risk loving yet completely averse to ruin. The end xx

Personally, I think the vast majority of these are rules to live by. I also think that the current society correctly valuates academic effort (since I was one in another life), by paying them peanuts just so they can have the freedom to think about silly useless things which may one day be important. It's crucial to have (a small number of) people doing that. But confusing academic though experiments with reality is really, really dangerous. One of the reasons the "memetic hazard" symbol was invented.