In his ongoing war with journalists, policy makers, bankers, Nobel prize for economics winners, the establishment and New York Times, Nassim Nicholas Taleb outlines why majority of people who have immense control over a lot of people have no real ‘skin in the game’;meaning that they only benefit from upsides and not the downside. The book can be alienating and I find it hard to agree with everything but also eye-opening into understanding dynamics.
Let me summarize what stood out for me:
- when thinking about solutions, think about how they relate with each other, asymmetries. for example, in international intervention policies, think about local alternative not international standard
2. bureaucrats and decision making. some who give advice/make policy have no downside to the decisions made but only upside. He makes a close linkage between financial crisis of 2008. banks get bailed out by taxpayers when they make unsound decisions, so ordinary people face downsides for bad decisions made by managers, but manager get paid nonetheless. Also, when politics become so detached from the ground, it ends up being about policies that have nothing to do with welfare of people it was meant to serve in the fist place; and become a game of musical chairs for the elite and bureaucrats.
3. Always look out for ‘what’s in their portfolio’. ie why people like hedge fund managers are best winners when their fund succeed and also losers when it fails: because they have put their money in the fund. So look out for biases when receiving/giving advice.
4. Don’t tell me about your politics, show me how you live your life. It is very easy to become political without really doing anything about it.
5. Decentralization reduces large structured asymmetries. When responsibility is spread over large area, ownership of projects, communities, it increases stability of the system, same with political systems, should work from the ground up.
6. On Solutions: interventionist solutions are not as good as they are painted to be. Most times, the solution is simple and direct. If you have to make countless presentations, graphs, completely altering the way people live and behave, it’s probably not the most appropriate solution.
7. What matters is not how many times you are right about outcomes, but how much gains are achieved when you are right.
8. Peer reviews: beware of making things to impress peers, colleagues and missing the real target audience. Same with some donor policies, architects to impress other architects and so on..
9. have deep understanding of the problem before writing the equation.
10. TORTS; common law regulating how people relate with each other is better than complicated bureaucratic regulations that only seek to create more ‘positions’ for bureaucrats when they are solving the cases. This is particularly in the case of new industries. When we are not aware of all the consequences, sometimes it’s better to have sandboxes, rather than outright ban and those that harm others are directly held responsible not blanket regulations: this is cue to crypto. lol , beware of ‘administrator’ whose job is to over complicate a problem in order to benefit from interpreting it.
11. Sometimes, better fences make better neighbours/ you are more likely to get along with your neighbour than your roommate.
12. Word of mouth from a genuine and satisfied users beats any ads all the time. This is the ultimate goal when making any product.
13. You can be different things at different stages/states.
14. we are prone to transfer risk from present to the future, even if the future is catastrophic. delaying risk somehow makes us think, it wouldn’t happen.
15. Minority rule: we live my minority rule, they are the revolutionaries, the change makers, from food industry, activists, etc. It just takes time, but they are usually the spark. Never underestimate the power of active, intolerant and courageous minority.
16. Asymmetries of life: for things that move,(eg market forces) the average does not matter. The extreme outcomes shatter all the preconceived expectations
17. Observe things in dynamics not statics alone. Relationships with each other rather than one-sided. Not everything is black or white. Just because you don’t see/understand it, it doesn’t mean it doesn’t exist. argumentum ad ignorantiam: absence of evidence is not evidence of absence. sometimes it could mean that no careful research has been done yet, or not the right tools were used.
18. Freedom is never free, it entails some level of risk.
19. In ever changing and dynamic world of work, aim to be judged by your outputs not inputs. Because of asymmetries/power laws, sometimes inputs are not directly related to outputs. Sometimes outputs can be 10x. Outputs and inputs only work for structured work; machine like.
20. Lindy effect: the longer you wait, the more you will be expected to wait. or simply, for a technology, idea, book, art, that has been existence for 100 years, any additional time that it exists means extension of life span for a longer period.
21. If you want peace, make people trade with each other.