EconTalk — Nassim Nicholas Taleb (2)

On: Work, Slavery, the Minority Rule and Skin in the Game.

Episode: N/A

Date: August 2017

Background: Author of “Skin in the Game”.

Key Subjects:

  • Second episode with Taleb related to the general topic of skin in the game.
  • Rubin trade:
    • Transfer of future risk to others in exchange for immediate payments.
    • Whenever performance is based on current (faulty) metrics.
    • There is no punishment if things go wrong later on.
    • Politics key example (reputation is a weak correction mechanism).
  • The minority rule:
    • Adjustments are made when important to a small minority, if the costs to the general population are low enough.
  • The Lindy effect:
    • If something has been around for a while, it will probably be around for a while longer.
    • Best prediction about the future: what was here in the past and is still here in healthy state.
  • Politics of globalization – improvements needed:
    • More power from bottom-up control to set the limits for what is acceptable or desirable.
    • Better governance through smaller units (avoid the minority rule).

Key Takeaways:

  • Best prediction about the future: what was here in the past and is still here in healthy state.
  • Better governance through smaller units (avoid the minority rule).
  • More power from bottom-up control to set the limits for what is acceptable or desirable.

Worth Listening:

8/10

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