Review and Reflection: Skin in the Game

I listened to Nassim Nicholas Taleb’s Antifragile: Things that Grow from Disorder a while back (you can find my write-up about it here) and found it to be tremendous, so I got Skin in the Game on Audible (it seemed to be the next-closest thing to my interests).

Continue reading “Review and Reflection: Skin in the Game”

Review and Reflection: Antifragile

I listened to the book Antifragile (affiliate link) last week, and it has some really interesting lessons. Although the author, Nassim Nicholas Taleb, might be classified in some ways as an economist (though not in the traditional sense–he writes about the economy but he rejects the notion of it as a field to be studied–classifying him as simply a scholar is probably the best definition), he applies his theory of antifragility to more than just one discipline.

One of the big takeaways I got from the book is a very different way of viewing risk.

The antifragile approach is to identify things that thrive under change. Obviously, change may still cause problems for these if it is a large negative change, but such things tend to change for the better under the sorts of changes that are common and not generally catastrophic.

When combined with robust things, which can persevere through change, the antifragile becomes highly valuable.

I am afraid, however, that much of the greater wisdom of the book is lost on me. This is not to say that I learned nothing, but rather that there are depths that I have not been able to explore.

Part of the reason for this is simple: the book is complex and broad, and while it uses anecdotes and common sense to great effect it also is willing to move very quickly. It is challenging, and for this reason I intend to return to it again at a later date.

However, even with the partial knowledge that I have gained of Taleb’s ideas, there are still many great lessons to be drawn from the book. One of them is to consider carefully actions. Many of Taleb’s assertions are nothing particularly controversial, but when viewed in total, Antifragile becomes a sort of philosophical treatise against thinking that you are more clever than you are.

To use an example, Talib cites traders on the stock market who have no formal economic training, but who make incredibly good decisions. Of course, for every success there are failures, but Taleb notes that there are common trends in these successful traders that would cause economists to tear their hair out.

They overwhelmingly use heuristics, rather than more complicated methods of coming to decisions. This means that rather than using abstract theories, they make decisions based on gut instinct.

This is perhaps more important outside the field of stock trading.

Heuristics, going with available information but not seeking to over rationalize it. Taleb shows through various examples that heuristics can be as useful as complicated theories. For starters, they are much more easy to adjust.

When a theory is wrong, it is easy to rationalize the reason for its failure, to blame problems on unconsidered external factors. This allows the shifting of blame away from the people who make the decisions and toward abstract theories. A person can avoid responsibility, and the theory need not necessarily be abandoned, because it can still be dressed up in new clothes and given a new name. If they made a decision that will cause consequences for others, they only pay the price if they had put their money where their mouth is.

On the other hand, by going and blaming theories, someone who makes foolish decisions can they restore their credibility by attaching themselves to a different school of thought, often not even so much a different school of thought as a rebranded version of the same foolishness.

Taleb is brutally honest. He is also brave enough to make enemies, since he openly names people who he believes to be guilty of infractions against good ethics. Where his skepticism may initially be perceived to cloud his judgment, it quickly becomes clear that his skepticism is based off of experience.

I find it difficult to call Taleb’s work full of wisdom. This is not because of absence of good ideas, but rather because it seems to contain something almost different than wisdom itself. It would definitely warrant the title of philosophical. Rather than simply call the notion that Taleb’s work pursues wisdom, I would call it meta-wisdom. It looks at patterns to determine how wisdom can be found and applied in many different ways.

An example of this is Taleb’s distaste for intervention in fundamental affairs (for instance, using gym machines when more natural workouts are available). While some intervention is praised (vaccines, for instance, are great in Taleb’s eyes), others are derided (an unnecessary surgery carries risks beyond just financial cost).

The fundamental notion of antifragility is this: find things in which loss is limited, but potential gain is not.

Another key notion of determining fragility is to look for places where people gain antifragility at the expense of others: bureaucrats who keep their jobs even if the systems they control fail, and indeed go back to ask for more money to overcome the difficulties their idiocy caused are a major target of Taleb’s ire.

Of all the books I’ve gotten into so far this year, none has inspired me quite so much as Taleb in a sense that I think I can apply his teachings to daily life. He cites Montaigne, who is probably my other top writer I’ve read this year (go figure), and has a sort of similar wisdom and methodology.

I don’t have the time and experience to make a categorical statement about whether all of Taleb’s ideas work, but his work was recommended to me by someone whose intellect and savvy I respect, and the read or listen is itself enjoyable. The Audible audiobook I have is read by Joe Ochmann, and I’d say that it’s pretty well-done.

I’ve picked up his book Skin in the Game (affiliate link) on Audible as well, so expect to see a review and reflection on it once I’ve finished it in a few weeks.

My current listening material is Age of Ambition (affiliate link) by Evan Osnos, which I’m enjoying, and Carl Jung’s Memories, Dreams, Reflections (affiliate link). I’m reading through Montaigne’s essays, as well, though I’ve had less time to just read of late.

In Defense of Capitalism

As someone who owns a (very) small business (obligatory self-promotion), I sometimes find it frustrating when people talk about capitalism solely as a tool for the greedy. Capitalism exists as a replacement for old systems that weren’t working as society became more complex, and remains a valuable way of running society.

I must first acknowledge those who have said these same ideas more eloquently and more profoundly, most importantly Hayek, whose books on the nature of the decentralized economy and the history of economics are terrific resources for understanding how capitalism works. I am not a professional economist, but I find myself on occasion engaged in conversation with people who have no understanding of the basic notion of capitalism, and who indeed feel that it is a great social ill. I find the exact opposite to be true: capitalism, when kept free of corruption as all systems must be, is an enabling tool for progress.

Why is this? Because capitalism is built on the notion of demand. There will always be times when people rely on cronyism or malice to get an unfair advantage (a problem likely more for ethics and governance than economics), but the fundamental reward of capitalism comes from service.

Continue reading “In Defense of Capitalism”

The Legacy of Eight: Playing the Post-Scarcity Economy

It’s been a long, somewhat harrowing week, but I’ve still found a little time to work on The Legacy of Eight and that interest survey I sent out. Sleep is for the weak, after all. As I move on with the project, I want to make sure that I’m increasingly transparent: I don’t have incredible readership, but I want to make it clear that I think about things before I do them, dangnabit, even if they turn out worse on paper than they did in my head.

And man, is post-scarcity economics in games a difficult thing to do well.

Continue reading “The Legacy of Eight: Playing the Post-Scarcity Economy”