SKIN IN THE GAME.
Welcome ter the 12th edition of Serf Under-ground Journal. Terday, ‘Skin in the Game. ‘Herewith:
Having ‘skin in the game,’ taking responsibility fer yr own opinions and actions , behaviour explored by Nassim Taleb in his book, ‘Antifragile,’ more of that later, and by individuals before him, Michel de Montaigne and the divine Socrates, yer’ll see why I call him that in the next paragraph, is an intellectual tradition believed ter have originated in 5th century BC Athens.
The historic Socrates, the democratic individualist of Plato’s early writings, in ‘The Meno’ is seen educating a young slave.:) In ‘The Apology’ Socrates argues that if he is wise, as claimed by the Oracle at Delphi, it is only because he recognises how little he knows. These words and his injunction in ‘The Crito’ to ‘care for your soul,’ are an appeal to intellectual honesty and a skeptical reminder of our intellectual limitations. In the ‘Crito,’ Socrates, on trial on charges of corrupting youth, chooses death over exile rather than compromise his principles and loyalty to the democratic laws of Athens, exemplifying his belief in individual responsibility.
And then there’s the skeptical pessimist, Michel de Montaigne, denizen of the Renaissance, committed in his essays, ( ‘essayer’ ‘to attempt,’) to skeptical studies of himself, examining his personal opinions and behaviour through the lens of the only thing he can depend on implicitly, his own judgement..
In his longest essay, ‘Apology for Raymond Sebond,’ Montaigne famously remarks, ‘Que sais-je?’ (‘What do I know?) reflecting his belief that humans are not able to attain true certainty. In another essay, ‘Of Experience,’ he observes ‘ ’tis impossible to find two opinions exactly alike, not only in several men, but in the same man at diverse hours,’ nor, says Montaigne, is there ‘one book to be found either human or divine, which the world busies itself about, whereof difficulties are cleared by interpretation. The hundredth commentator passes it on to the next still more knotty and perplexed than when he found it.’
Montaigne would see youth educated to independent thought by means of dialogue and critical enquiry, the tutor encouraging his student’s curiosity by field trips to interesting places. In reading, the student should be encouraged to ‘examine and thoroughly sift anything he reads and lodge nothing in his fancy upon simple authority…’
Say, Michel de Montaigne was pretty advanced in his ideas about educating youth, ‘youth’ meaning, of course, well born young males. Though it’s said Montaigne took pains with the education of his only daughter, educating girls, even the highborn, was a hit and miss affair. Moravian educator, John Comenius, in the seventeenth century was an early advocate of universal education.
Regarding responsibility fer your actions, the following from Montaigne’s essay, ‘Of Custom And That We Should Not Easily Change A Law Received,’ quoted in me previous Edition of Serf Under_ground:
‘For my own part I have a great aversion to novelty, what face or what pretence soever it may carry along with it, having been an eye witness of the great evils it has produced … And freely to speak my thoughts, it argues a strange self love and great presumption to be so fond of one’s own opinions, that a public peace must be overthrown to establish them and to introduce so many inevitable mischiefs and so dreadful corruption of manners, as a civil war and the mutations of state consequent to it always bring in their train, and to introduce them, in a thing of so high concern, into the bowels of one’s own country…’ ‘who so ever shall take upon him to choose and alter, usurps the authority of judging and should look well about him and make it his business to discern clearly the defect of what he would abolish and the virtue of what he is about to introduce.’
…’the defect of what he would abolish and the virtue of what he is about to introduce.’
Regardin’ agency problems Nassim Taleb has some astute comments on what we’re gettin’ into when someone gets the upside of an event and a different person gets the downside, what Taleb calls the agency problem of asymmetry.
NASSIM TALEB’S TRIAD OF PERSONAL RESPONSIBILITY.
In Taleb’s book ‘Antifragile,’ in his chapter ‘Skin in the Game, he examines in complex modernity, a growing problem of privilege without obligation. ‘Protected by ‘modernity’s connectivity’ and ‘new found invisibility of causal changes, ‘ makers of policy in large bureaucracies and corporations may cause harm to others without , themselves, being exposed to risk.
In the chapter, Taleb presents a Triad Table of decision makers in society, the first group, those with no skin in the game who receive benefits without risk to themselves, a second category, those with skin in the game, responsible for their own actions, – and a third category, those who take harm for the sake of others – the heroic, who may or may not be misguided.
In the first category Taleb includes bureaucrats and politicians, consultants, theoreticians in academies, corporate executives, bankers and journalists who make predictions. In the second category he lists citizens, lab experimenters, authors, small business men, merchants and speculators. In the third category are knights, soldiers maverick scientists, artists, innovators and investigative journalists.
Taleb sees a growing trend of ‘experts’ transferring fragility to others and would welcome addressing asymmetries of risk, enforcing ‘skin in the game, as in the ancient Code of Hammurabi, hmm … perhaps in some cases not quite so severely. According to the Hammurabi Code, fer example, bridge engineers were obliged ter sleep under their own bridges. In Catalonia, the tradition was ter behead a failed banker in front of his own bank! Skin in the game.
Taleb calls the phenomenon of causing harmful action without accountability the Stiglitz Syndrome after Joseph Stiglitz, who, unlike Nassim Taleb with his own skin in the game predicting Fannie Mae’s failure, made a public assessment that: ‘on the basis of historical experiences, the risk to the government from a potential deficit in GSE debt is effectively zero. (A/F p387.) Had Stiglitz been obliged to invest his own funds in Fannie Mae he might have been more critical. While the collapse of Fannie Mae cost the tax payers billions of dollars, Joseph Stiglitz, with selective amnesia, says Taleb, went on to publish an I told ya’ so book post Fannie Mae’s demise. Academics seem not designed to recall their failed predictions, think Erlich! Nassim Taleb is also critical of what he calls the talker’s free option, where a journalist like Thomas Friedman through his influential newspaper op-eds helped bring on the Iraq War, but paid no penalty and continues to write for the op-ed page of the New York Times.
In tricky Nature, actions can mean life or death. There’s an evolutionary argument here against institutional narratives that reward ‘ cheap tawk’ and favouring free enterprise, doers who succeed or fail by their own actions. In the latter case, regardin’ trial and error, failure comes at no cost to the public, while success may bring public benefits.
I’ll jest conclude with a comment by Faustino, that I posted in my first edition of Serf Under_ground Journal, reposted from Climate Etc 16/05/13 (10.25pm.)
‘As a policy economist, I’ve often said that we can’t sensibly make long-term economic forecasts or projections and that it is not sensible to base policy on them. A speech by Bank of England economist, Ben Broadbent notes that “even when we look only a year ahead, the unpredicted component in annual GDP growth – the noise’- has been significantly greater than the signal … the economy has always been volatile.” ‘
CE 16’/05/13 11.45 am.) ‘I have been an economic and policy adviser to UK, Australian and Queensland governments with a focus on drivers of economic growth and I have seen, time and time again, the dangers of high-spending, long-term government projects … A system which allows decentralized decision-making by those with skin in the game and relevant knowledge and expertise is likely to produce far better results and will be more adaptable when forecasts inevitably prove wrong.’
Varied Responses to the Theme of Responsibility.
Why should I let the toad work
Squat on my life?
Can’t I use my wit as a pitchfork
And drive the brute off?
Six days of the week it soils
With its sickening poison –
Just for paying a few bills!
That’s out of proportion.
Lots of folk live on their wits:
Losers, loblolly-men, louts –
They don’t end as paupers.
Their nippers have got bare feet,
Their unspeakable wives
Are skinny as whippets – and yet
No one actually starves.
Ah, were I courageous enough
To shout, Stuff your pension!
But I know, all to well, that’s the stuff
That dreams are made on:
For something sufficiently toad – like
Squats in me too;
Its hunkers are heavy as hard luck,
And cold as snow,
And will never allow me to blarney
My way of getting
The fame and the girl and the money
All at one sitting.
I don’t say one bodies the other
One’s spiritual truth;
But I do say its hard to lose either,
When you have both.
Creon: Now tell me, in as few words as you can,
Did you know the order forbidding such an act?
Antigone: I knew it, naturally. It was plain enough.
Creon: And yet you dared to contravene it?
That order did not come from God. Justice,
That dwells with the gods below, knows no such law.
I did not think your edicts strong enough
To overrule the unwritten unalterable laws
Of God and heaven, you being only a man.
They are not of yesterday or to-day, but everlasting,
Though where they come from, none of us can tell.
Guilty of their transgression before God
I cannot be, for any man on earth.
I knew that I should have to die, of course,
With or without your order. If it be soon,
So much the better. Living in daily torment
As I do, who would not be glad to die?
This punishment will not be any pain.
Only if I had let my mother’s son
Lie there unburied, then I could not have borne it.
This I can bear. Does that seem foolish to you?
Or is it you that are foolish to judge me so?
A dialogue between Socrates and Crito on the question of whether Socrates should escape his unjust sentence of death, as Crito urges, or accept the verdict:
Socrates: Well then, how can we consider the question most reasonably … Do we say that one must never willingly do wrong, or does it depend upon circumstances? Is it true as we have often agreed before, that there is no sense in which wrong doing is good or admirable? Or have we jettisoned all our former convictions in these last few days? Can you and I at our age, Crito, have spent all these years in serious discussions without realizing that we were no better than a pair of children? Surely the truth is just what we have always said. Whatever the popular view is, and whether the alternative is pleasanter than the present one or harder to bear, the fact remains that to do wrong is in every sense bad and dishonourable for the person who does it. Is that our view or not?
Crito: Yes, it is ….
Socrates: … Suppose that while we were preparing to run away from here (or however one should describe it) the laws and Constitution of Athens were to come and confront us and ask this question: ‘Now, Socrates, what are you proposing to do? Can you deny that by this act which you are contemplating you intend, so far as you have the power, to destroy us, the Laws and the whole State as well? Do you imagine that a city can continue to exist and not be turned upside down, if the legal judgements which are pronounced in it have no force, but are nullified and destroyed by private persons? – how shall answer this question, Crito, and others of the same kind? There is much that could be said by a professional advocate, to protest against the invalidation of this law which enacts that judgements once pronounced shall be binding. Shall I say ‘Yes I do intend to destroy the laws, because the State wronged me by passing a faulty judgement at my trial? Is this to be our answer or what?