The problem with Taleb is not that he’s an asshole. The problem with Taleb is that he’s right.
There could not be a better explanation of how I feel about Nassim Nicholas Taleb. While a cursory look at his Twitter feed reveals someone who takes himself extremely seriously, his books are perhaps one of the best guides to decision-making. Faithful applications of his ideas will help you understand much of how the world is shaped. I wholeheartedly recommend his previous books that I have read – The Black Swan and Anti-Fragile.
With that out of the way, let’s dive in the lessons and ideas that struck out for me:
Don’t tell me what you think, show me what’s in your portfolio
The rise of the “public expert” is a construct of modernity. It is supposed to allow a person to give impartial advice. This person has no skin in the game, and it is purposefully so.
Taleb argues that while good in theory (lots of things are good in theory), it creates an asymmetry. A diplomat or think tank can advise to go into war or intervene in a country, but doesn’t face any consequences if it goes wrong.
So, Skin in the Game – at least the way Taleb defines it – is not just about being in the game. It is about symmetry. If you’re gonna win big if you’re right, you should lose big if you’re wrong.
Given that today, there are so many self proclaimed ‘experts’ in every possible field, a good BS detector with this principle in mind is a big takeaway.
The intolerant minority wins – why that’s good and bad
We often think decisions are made by the majority. This is not really true.
Consider a dinner party. Let’s say the composition is something like this:
Given that the host has limited time and resources, what should they make for dinner? Something vegetarian! The vegetarians can’t eat meat, but the meat eaters can eat vegetables. This type of asymmetry doesn’t seem important, but let’s apply it to a far more serious context: politics.
The same illusion exists in political discussions, spread by political “scientists”: you think that because some extreme right-or left-wing party has, say, the support of ten percent of the population, their candidate will get ten percent of the votes. No: these baseline voters should be classified as “inflexible” and will always vote for their faction. But some of the flexible voters can also vote for that extreme faction, just as non-kosher people can eat kosher. These people are the ones to watch out for, as they may swell the number of votes for the extreme party. Galam’s models produced a bevy of counterintuitive effects in political science—and his predictions have turned out to be way closer to real outcomes than the naive consensus.
Let’s take it up a notch and apply to a life and death situation:
While some believe that the average Pole was complicit in the liquidation of Jews, the historian Peter Fritzsche, when asked, “Why didn’t the Poles in Warsaw help their Jewish neighbors more?,” responded that they generally did. But it took seven or eight Poles to help one Jew. It took only one Pole, acting as an informer, to turn in a dozen Jews.
We see how this simple idea of an intolerant minority can lead to negative consequences. But the good news is that this cuts both ways:
“Never doubt that a small group of thoughtful citizens can change the world. Indeed, it is the only thing that ever has,” wrote Margaret Mead. Revolutions are unarguably driven by an obsessive minority. And the entire growth of society, whether economic or moral, comes from a small number of people.
Why the gig economy will not take over the workforce
There has been a lot of talk about the gig economy and how companies are hiring contractors and freelancers to do the jobs that was done by “company men”. One wonders if being an employee at all will be a thing in a couple of decades.
But what this doesn’t take into account is the one reason why companies hire employees in the first place: dependability.
A freelancer is free for hire, if they get a better offer somewhere else, they’ll go take that job. You need someone who you “control”. This is an uncomfortable idea if you think about it for a second. But it’s a powerful one.