Skin In The Game - Book Notes

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Skin In The Game - Book Notes by Mind Map: Skin In The Game - Book Notes

1. Interventionistas

1.1. Flaws

1.1.1. 1) They think in statics, not dynamics

1.1.1.1. They don't think about second steps (or 3rd, 4th etc)

1.1.2. 2)They think in low, not high dimensions

1.1.2.1. Don't think in multi dimensional problems

1.1.2.1.1. They assume 1,simple dimension

1.1.3. 3) They think in terms of actions, never interactions

1.1.3.1. Can't forecast the evolution of those one helps by attacking

1.1.3.1.1. Or the magnification others get from feedback

2. Skin In Game

2.1. No evolution without skin in the game

2.1.1. Has to have risk of extinction for evolution to occur

2.2. Avoid taking advice from someone who gives advice for a living, unless there is a penalty for their advice

2.2.1. Specifically professionals, not just random people in conversation

2.2.2. Best thing we can learn from motivational speaker is how to be a motivational speaker

2.2.2.1. Best people to learn a thing from is from those who do the thing with skin in the game

2.3. We need skin in the game to get smarter/good at stuff

2.3.1. Otherwise we're just playing

2.3.2. This could mean impactful changes to education systems

2.4. Definitions

2.4.1. No Skin in the Game

2.4.1.1. Keeps upside

2.4.1.2. Transfers downside to others

2.4.1.3. Owns a hidden option at someone else's expense

2.4.1.4. Bureaucrats, policy wonks

2.4.1.4.1. Consultants, sophists

2.4.1.5. Large corporations with access to the state

2.4.1.5.1. Businessmen in suits

2.4.1.6. Scientists who play the system (research only with manipulating numbers)

2.4.1.7. Centralized government

2.4.2. Skin in the game

2.4.2.1. Keeps his own downside

2.4.2.2. Takes his/her own risks

2.4.2.3. Citizens

2.4.2.3.1. Merchants, businessmen

2.4.2.4. Artisans

2.4.2.4.1. Entrepreneurs

2.4.2.5. Laboratory and field experimenters

2.4.2.6. Government of city states

2.4.3. Skin in the Game of Others... Or... Soul in the Game

2.4.3.1. Takes the downside on behalf of others

2.4.3.2. Or universal values

2.4.3.3. Saints

2.4.3.3.1. Prophets, philosophers (pre-modern)

2.4.3.4. Artists, some artisans

2.4.3.4.1. Entrepreneurs, innovators

2.4.3.5. Maverick scientists who take risks at distance from common beliefs

2.4.3.6. Municipal government

2.5. Comes with conflict of interest

2.5.1. Because they have skin in the game, they may say things that benefit them more

2.5.2. This can have a lot of negativity, and thus it's important to have a good ethics system for behavior

2.5.3. Should have transparency in all deals, including intent

2.5.4. Conflict of interest is better than no Skin in the game opinions

2.5.4.1. Otherwise it leads to people mimicking others without really knowing because they don't have skin in the game

2.5.4.2. Then when people follow these theories as opposed to what's working , there are a lot of downsides to them

2.5.4.3. So we have caused more downside by trying to prevent harm

3. Via Negativa

3.1. We know with more clarity what is false and what is right

3.2. Thus we get smarter by identifying more false things and reducing them

3.2.1. Not by identifying just the right things

3.3. Don't treat others how you want to be, instead, don't treat them how you don't want to be treated

4. Asymetry

5. Minority Rule

5.1. A minority can have large impacts, causing normalization

5.1.1. Someone who doesn't eat gmo, can push their family then others, then influence grocery stores since it's just easier to satisfy all

5.2. Most major decisions and rules are setup due to some minorities, not the majority

5.3. So sometimes we need to push back on minority desires

6. Examples

6.1. Employee vs contractor

6.1.1. Employee has skin in the game for the company

6.1.1.1. As well as the company has skin in the game for employee

6.1.1.1.1. There's a risk / problem if the employee has nothing to do

6.1.1.1.2. Contractors you can just not pay if you you don't have anything to do

6.1.2. Employees are also slaves

6.1.2.1. Rely on the money, become a company man"

6.1.3. To be free means you can take risks

6.1.3.1. Taking risks means there are downsides to choices

6.1.3.2. Thus you have skin in the game

7. Lindy Effect

7.1. Things that last longer the logger it lasts

7.2. Non perishable

7.3. Thus for your stuff and ideas to last it has to appeal to the future people, not just current people, otherwise it will perish

7.4. Thus time is the proof of what is expert advise and wisdom

7.4.1. If it's lasted the test of time, it's evolutionary proven

8. Rationality

8.1. Avoidance of systemic ruin