Notes business

Book 5 (Skin in the Game)

Jesus was a risk taker

In Christianity, it would have been easier to separate Jesus from God, but there was an insistence on the Trinity. The duality of Jesus (being both man and God) is central, and has caused monotheists to see traces of polytheism in Christianity and Christians to be beheaded by the Islamic State.

The church founders really wanted Christ to have skin in the game – he suffered on the cross, sacrificed himself, and experienced death. He was a risk taker, and more importantly, he sacrificed himself for the sake of others.

A god stripped of humanity cannot have skin in the game in such a manner, cannot really suffer (or, if he does, such a redefinition of a god injected with a human nature would back up our argument). A god who didn’t really suffer on the cross would be like a magician who performed an illusion…

Science and Scientism

The problem of behavioral economists like Sunstein and Thaler is that they think that our understanding of single individuals allows us to understand crowds and markets. The Intellectual Yet Idiot (IYI) is a product of modernity, the government takes a much greater role today than it did in the past, but the openings for IYI’s are decreasing, which explains why they are so influential.

The IYI pathologizes others for doing things he doesn’t understand without ever realizing it is his understanding that may be limited. He thinks people should act according to their best interests and he knows their interests, particularly if they are “rednecks” or from the English non-crisp-vowel class who voted for Brexit.

A rich person who is isolated from vertical socializing with the poor becomes oblivious to the latter’s reality. The rich person thinks of the poor as a theoretical construct, and that they know what’s best for them.


Advice from your grandmother or olders works 90 percent of the time. Psychologists and behavioral scientists are right less than 10 percent of time. The replication crisis in psychology is a case in point.

The attempt to replicate a hundred psychology papers in “prestigious” journals of 2008 found that only 39 were replicable. And of the 39, less than 10 are robust enough to transfer outside the domains of the experiment. Similar defects can be found in medicine and neuroscience.

It is critical that it is not just that the books of the ancients are still around and have been filtered by Lindy, but that those populations who read them have survived as well.

Our knowledge of physics was not available to the ancients but human nature was. Everything that holds in social science and psychology must be Lindy-proof, it must have an antecedent in the classics, else it will not replicate beyond the experiment,.

The classics Taleb is referring to:

Cicero, Seneca, Marcus Aurelius, Epictetus, Lucian, or the poets: Juvenal, Horace, or the later French so-called “moralists” (La Rochefoucauld, Vauvenargues, La Bruyère, Chamfort). Bossuet is a class on his own. One can use Montaigne and Erasmus as a portal to the ancients: Montaigne was the popularizer of his day; Erasmus was the thorough compiler.


Here are some ideas that exist both in modern psychology and in ancient texts.

Cognitive dissonance: People avoid inconsistent beliefs, the grapes they can’t reach must be sour. First found in Aesop; repackaged by La Fontaine.

Loss aversion: A loss is more painful than a gain is pleasant. Origins in letters of Seneca and Livy’s Annals (Men feel the good less intensely than the bad).

Negative advice (via negative): We know what is wrong better than what is right. Origins: Ennius, repeated by Cicero.

Skin in the game: origins, Yiddish proverb: “You can’t chew with somebody else’s teeth.”

Antifragility: Found in Cicero, Machiavelli, and Rousseau.

Time discounting: “A bird in the hand is better than ten on the tree.” (Levantine proverb)

Madness of crowds: Nietzsche: Madness is rare in individuals, but in groups, parties, nations, it is the rule.

Skin in the Game: Hidden Asymmetries in Daily LifeBook 5 (Skin in the Game) 1

"Silence is the best expression of scorn" - G.B. Shaw

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