memex/areas/books/Skin in the Game_ Hidden Asymmetries in Da - Nassim Nicholas Taleb.org

* Skin in the Game_ Hidden Asymmetries in Da - Nassim Nicholas Taleb
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** Notes for page (12 . 11341)
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 Sharia, in particular the law regulating Islamic transactions and finance, is of interest to us insofar as it preserves some of the lost Mediterranean and Babylonian methods and practices—not to prop up the ego of Saudi princes. It exists at the intersection of Greco-Roman law (as reflected from people in Semitic territories’ contact with the school of law of Berytus), Phoenician trading rules, Babylonian legislations, and Arab tribal commercial customs and, as such, it provides a repository of ancient Mediterranean and Semitic lore. I hence view Sharia as a museum of the history of ideas on symmetry in transactions. Sharia establishes the interdict of gharar, drastic enough to be totally banned in any form of transaction. It is an extremely sophisticated term in decision theory that does not exist in English; it means both uncertainty and deception—my personal take is that it means something beyond informational asymmetry between agents: inequality of uncertainty. Simply, as the aim is for both parties in a transaction to have the same uncertainty facing random outcomes, an asymmetry becomes equivalent to theft. Or more robustly:

 No person in a transaction should have certainty about the outcome while the other one has uncertainty.
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** Some tribalism is good
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Now what’s the reason? Modernity put it in our heads that there are two units: the
individual and the universal collective—in that sense, skin in the game for you would
be just for you, as a unit. In reality, my skin lies in a broader set of people, one that
includes a family, a community, a tribe, a fraternity. But it cannot possibly be the
universal.

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** Notes for page (14 . 21583)
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GENES VS. LANGUAGES

Looking at genetic data in the Eastern Mediterranean with my collaborator the geneticist Pierre Zalloua, we noticed that both invaders, Turks and Arabs, left few genes, and in the case of Turkey, the tribes from East and Central Asia brought an entirely new language. Turkey, shockingly, is still inhabited by the populations of Asia Minor you read about in history books, but with new names. Further, Zalloua and his colleagues claim that Canaanites from 3,700 years ago represent more than nine-tenths of the genes of current residents of the state of Lebanon, with only a tiny amount of new genes added, in spite of about every possible army having dropped by for sightseeing and some pillaging.*2 While Turks are Mediterraneans who speak an East Asian language, the French (North of Avignon) are largely of Northern European stock, yet they speak a Mediterranean language.

So:

 Genes follow majority rule; languages minority rule.

 Languages travel; genes less so.

This shows us the recent mistake of building racial theories on language, dividing people into “Aryans” and “Semites,” based on linguistic considerations. While the subject was central to the German Nazis, the practice continues today in one form or another, often benign. For the great irony is that Northern European supremacists (“Aryan”), while anti-Semitic, used the classical Greeks to give themselves a pedigree and a link to a glorious civilization, but didn’t realize that the Greeks and their Mediterranean “Semitic” neighbors were actually genetically close to one another. It has been recently shown that both ancient Greeks and Bronze Age Levantines share an Anatolian origin. It just happened that the languages diverged.

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** Cato's injunction
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I am privileged to have other enemies than Big Ag. A couple of years ago, a university in Lebanon offered me an honorary doctorate. I accepted out of respect, counter to my habit of refusing honors, (largely) because I get very bored during ceremonies. Plus, in my experience, people who collect honorary doctorates are typically hierarchy-conscious, and I abide by Cato’s injunction: he preferred to be asked why he didn’t have a statue rather than why he had one.
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** On generational punishement
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The only way we have left to control suicide-terrorists would be precisely to convince
them that blowing themselves up is not the worst-case scenario for them, nor the
end scenario at all. Making their families and loved ones bear a financial
burden—just as Germans still pay for war crimes—would immediately add
consequences to their actions. The penalty needs to be properly calibrated to be a
true disincentive, without imparting any sense of heroism or martyrdom to the
families in question.
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** Rich people are not hated, only the high-salaried are
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It is safe to say that the American public—actually all publics—despises people who
make a lot of money on a salary, or, rather, salarymen who make a lot of money.
This is indeed generalized to other countries: a few years ago the Swiss, of all
people, ran a referendum for a law capping salaries of managers to a set multiple of
the lowest wage. The law didn’t pass, but the fact that they thought in these terms
is rather significant. For the same Swiss hold rich entrepreneurs, and people who
have derived their celebrity by other means, in some respect.
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** Notes for page (25 . 16108)
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ANOTHER BUSINESS OF INTERVENTION

People who have always operated without skin in the game (or without their skin in the right game) seek the complicated and centralized, and avoid the simple like the plague. Practitioners, on the other hand, have opposite instincts, looking for the simplest heuristics. Some rules:

 People who are bred, selected, and compensated to find complicated solutions do not have an incentive to implement simplified ones.

And it gets more complicated as the remedy has itself a skin-in-the-game problem.

 This is particularly acute in the meta-problem, when the solution is about solving this very problem.

In other words, many problems in society come from the interventions of people who sell complicated solutions because that’s what their position and training invite them to do. There is absolutely no gain for someone in such a position to propose something simple: you are rewarded for perception, not results. Meanwhile, they pay no price for the side effects that grow nonlinearly with such complications.

This also holds true when it comes to solutions that are profitable to technologists.

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** Notes for page (26 . 6554)
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CONVERSATION

If anything, being rich you need to hide your money if you want to have what I call friends. This may be known; what is less obvious is that you may also need to hide your erudition and learning. People can only be social friends if they don’t try to upstage or outsmart one another. Indeed, the classical art of conversation is to avoid any imbalance, as in Baldassare Castiglione’s Book of the Courtier: people need to be equal, at least for the purpose of the conversation, otherwise it fails. It has to be hierarchy-free and equal in contribution. You’d rather have dinner with your friends than with your professor, unless of course your professor understands “the art” of conversation.

Indeed, one can generalize and define a community as a space within which many rules of competition and hierarchy are lifted, where the collective prevails over one’s interest. Of course there will be tension with the outside, but that’s another discussion. This idea of competition being lifted within a group or a tribe was, once again, present in the notion of a group as studied by Elinor Ostrom.

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** Notes for page (32 . 3343)
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Different people rarely mean the same thing when they say “religion,” nor do they realize it. For early Jews and Muslims, religion was law. Din means law in Hebrew and religion in Arabic. For early Jews, religion was also tribal; for early Muslims, it was universal. For the Romans, religion was social events, rituals, and festivals—the word religio was a counter to superstitio, and while present in the Roman zeitgeist it had no equivalent concept in the Greek-Byzantine East. Throughout the ancient world, law was procedurally and mechanically its own thing. Early Christianity, thanks to Saint Augustine, stayed relatively away from the law, and, later, remembering its origins, had an uneasy relation with it. For instance, even during the Inquisition, a lay court formally handled final sentencing. Further, Theodosius’s code (compiled in the fifth century to unify Roman law) was “Christianized” with a short introduction, a blessing of sorts—the rest remained identical to pagan Roman legal reasoning as expounded in Constantinople and (mostly) Berytus. The code remained dominated by the Phoenician legal scholars Ulpian and Papinian, who were pagan: contrary to theories by geopoliticalists, the Roman school of law of Berytus (Beirut) was not shut down by Christianity, but by an earthquake.

 The difference is marked in that Christian Aramaic uses different words: din for religion and nomous (from the Greek) for law. Jesus, with his imperative “give to Caesar what belongs to Caesar,” separated the holy and the profane: Christianity was for another domain, “the kingdom to come,” only merging with this one in the eschaton.* Neither Islam nor Judaism have a marked separation between holy and profane. And of course Christianity moved away from the solely spiritual domain to embrace the ceremonial and ritualistic, integrating much of the pagan rites of the Levant and Asia Minor. As an illustration of the symbolic separation between church and state, the title Pontifex Maximus (head priest), taken by the Roman emperors after Augustus, reverted after Theodosius, in the late fourth century, to the bishop of Rome, and later, more or less informally, to the Catholic Pope.

For most Jews today, religion has become ethnocultural, without the law—and for many, a nation. Same for Armenians, Syriacs, Chaldeans, Copts, and Maronites. For Orthodox and Catholic Christians, religion is largely aesthetics, pomp, and rituals. For Protestants, religion is belief without aesthetics, pomp, or law. Further East, for Buddhists, Shintoists, and Hindus, religion is practical and spiritual philosophy, with a code of ethics (and for some, a cosmogony). So when Hindus talk about the Hindu “religion,” it doesn’t mean the same thing to a Pakistani, and would certainly mean something different to a Persian.

 When the nation-state dream came about, things got more, much more complicated. When an Arab used to say “Jew” he largely referred to a creed; to Arabs, a converted Jew was no longer a Jew. But for a Jew, a Jew was simply defined as someone whose mother was a Jew. But Judaism somewhat merged into nation-state and now, for many, indicates belonging to a nation.

In Serbia, Croatia, and Lebanon, religion means one thing at times of peace, and something quite different at times of war.

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