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BOOK REVIEW: Life is a matter of trial and error

Friday October 05 2018
book

Acclaimed American author Nassim Nicholas Taleb stirs controversy with his latest book Skin in the Game: Hidden Asymmetries in Daily Life. PHOTO | NMG

By SARA BAKATA

Acclaimed American author Nassim Nicholas Taleb stirs controversy with his latest book Skin in the Game: Hidden Asymmetries in Daily Life.

The book is similar to and is a logical follow up to Fooled by Randomness (2004), The Black Swan (2010) and Anti-Fragile (2012.).

Taleb examines life’s events and explains them from the point of social science — not science, because, while he thinks science is good, he says most scientists are lazy and are frauds. He thinks the same of “scientific” researchers, theoretical economists and academicians.

Reason: These people do not relate with real life events. They lack “skin in the game.” They take no risks yet gain by simply being, as others suffers loss.

Skin in the Game is about how people learn and perfect their craft or trade through practice and mistakes before they master it to the point of being an authority.

Taleb argues that this is true of all occupations and professions ranging from Spanish grammar teachers to stockmarket traders and financial advisers.

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That a Spanish grammar teacher is best placed to correct your Spanish grammar; that if a stock broker or financial adviser gives you advice on how and when to invest your money, ask them if they would do the same with their money.

Most likely they would not because they don’t want to take the risk, so why should you? They have not tried and tested their own advice (put their skin in the game).

Taleb says those who are not active players in their field where they take risks every day will not succeed. He says that systems have a way of getting rid of those who are not perfect — poor students crash out of the school system, careless pilots crash and die and stop risking the lives of passengers. All this is the system ridding itself of imperfections. Rather harsh.

Simply, the author says, don’t take advice from anyone who purports to have answers to problems they have neither experienced nor solved. He calls having skin in the game a process of elimination of bullshit in life.

Eight books

Although the book is written in prose, it reads like a work of research. The introduction gives a historical and philosophical background to the theory of symmetry, from the ancient world to modern age thinkers.

He moves from Hammurabi’s world to Kant’s to modern legal systems. The story is told in eight books, each explaining occurrences in society, which he uses to explain why they turned out the way they did.

Book Three, for example, covers the greatest asymmetry in life, which is the dominance of the stubborn minority in what he calls the most intolerant wins of our times.

No one expects that a minority group would have its way, but he argues that they always do. He gives the example of halal and kosher food.

In a community with a minority of consumers who only buy kosher or halal, it makes commercial sense for the entire product to be made kosher or halal because the majority don’t care whether what they are eating is kosher or halal. Without taking away from the non-kosher/halal eaters, a producer or supplier caters for both groups by making the kosher-halal eaters happy.

In Book Four, Taleb discusses the idea of freedom and voluntary slavery. He gives the example of the dog and the wolf from the tales of Aesop. The dog bragged to the wolf about the food and luxury items provided by his master. The wolf was so enticed by the dog’s seemingly good life that he almost agreed to be domesticated.

Until he asked the dog what the collar on his neck meant. The wolf immediately realised, for all the things the dog bragged about getting from his master, the collar made sure he had no freedom. Taleb uses this ancient tale to demonstrate the asymmetry of our modern economic set up.

People enter into employment so that they can take care of their families and do what they please. Wrong. An employed person is owned by their employer.

If they lose their job, they have no life. They cannot afford freedom. The employee has accepted the slave-like terms and conditions because they offer a regular income that gives a false sense of financial freedom. He calls this the most curious form of acceptable slavery.

Taleb saves his harshest criticism for academics, and especially economists. He says they come up with financial and economic theories that inflict pain on millions of people.

When these theories fail, they hide behind the law of probability. But according to Taleb, such people come up in every generation because they survive on taking no risk at all.

In short, Taleb says, trust the person whose been there and done that, rather than the one with too-good-to-be-true solutions. Life is not a complicated theory. It is trial and error.

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