Book Notes, Summary and Review: Skin in the Game by Nassim Nicholas Taleb

People learn best from experience, not from advice.

This is because we need to incur some risk in whatever we're doing. The real learning only occurs when something that means a lot to us is hanging on the line.

When we succeed, good for us. But when we fail and lose everything, that's when we're forced to seriously face the repercussions of our actions. At the same time, we're invited to reflect on what went wrong, why did it go wrong and how we can do better in the future.

Nassim Nicholas Taleb's Skin in the Game outlines the importance of having something at stake, of having some skin in the game. Nassim applies this idea to a wide variety of fields and professions, underscoring its importance with each new chapter.

Structure of Summary

The book summary will be organized as such:

1. Build Sandcastles on the Ground, Not in the Air: I'll discuss why as much as idealism is important, we also need to be pragmatic in our society.
2. Have Skin in Every Game: I'll examine how Nassim's concept of "skin in the game" can be found in and practiced within different domains

Build Sandcastles on the Ground, Not in the Air

Our society has cultivated a class of Intellectual Yet Idiots (IYIs) who dominate positions of authority and make crucial decisions that effect profound change in our complex world. Their decisions have a cascading impact on those who work with them and for them.

"Bureaucracy is a construction by which a person is conveniently separated from the consequences of his or her actions."

When people become isolated from the consequences of their decisions, they remain ignorant of their misconceptions about how the world operates. This leads to catastrophic consequences on an individual level (such as ethical breaches) and on a societal level (such as the geopolitical impasse in the Middle East).

"Should" alone is insufficient to create and to enact change. At the end of the day, we've to act upon our gained insights and knowledge. It's our will and courage to act, despite knowing that there's a chance that we may fail, that drives human civilization towards a more promising and brighter future.

Impactful change is gained through action, not thought alone.

Have Skin in Every Game

Possible areas where the "skin in the game" concept applies:

• Your every action: Talk is cheap. Do more than you talk. Action without talk will always beat talk without action.
• Personal branding: Eponymy is a risky but effective marketing strategy. It's exactly because your reputation is at stake which incentivizes you to do things that aligns with who you are.
• Religion: Religion is more than an act of faith. According to Pascal's wager, believing in the creator has a positive payoff if he truly exists, but no downsides if he doesn't. But if you only believe in religion and fail to live according to its values, religion loses its purpose and appeal. It becomes a purely academic and sterile activity.
• Economic equality: Inequality doesn't necessarily only refer to the wealth gap between the rich and the poor; it can also be measured in terms of the risks of losing one's wealth.
• Ethical behaviors: Virtue-signaling is immoral, because you claim virtue without fully living with its immediate consequences.
• Advancement in knowledge: Science must be falsifiable, that's what gives Science its value. Science works because scientific ideas are vulnerable to the falsification of time. They must be subjected to the test of time, reviewed and assessed by others in the present and in the future.
• Preservation of culture: Our culture is the amalgamation of the best ideas, inventions and ways of living that humankind have created. So while a physical copy of Romeo and Juliet may age and perish, for instance, the book itself as an idea doesn't.

Wrapping Up

I've read Skin in the Game nearly four months ago.

This book has transformed the way I look at the world. I'm now more careful when asking for other people's advice. I pay more attention to what someone does, rather than what he or she says. I've also come to appreciate and accept that we, as human-beings, are an error-prone species; our body of knowledge is far more limited and flawed than we think.

So many great thinkers of our time have recommended us to read Nassim Nicholas Taleb's Skin in the Game, that I've already lost count. This is a thought-provoking book, one that will beget you to think about many things — your assumptions about the world, your relationships with others and your life in general.

Take a risk — read this book.