Introduction:
John Faithful Hamer introduces the Likeville podcast and its guest, Nassim Nicholas Taleb, author of several best-selling books, including “Skin in the Game.” Hamer acknowledges the support of Patreon members and encourages listeners to support the podcast by liking, reviewing, and sharing it. The episode is sponsored by Elsa’s bar, Seb Furtado Photography, GoodMix cereal, and the Likeville Facebook group.

Skin in the Game:
The interview with Taleb focuses on his book “Skin in the Game,” which emphasizes the importance of personal accountability and risk-taking in various aspects of life.

Skin in the Game in Different Contexts:
Taleb discusses the concept of skin in the game in the context of politics, economics, and personal relationships. He argues that politicians and economists often lack skin in the game, leading to poor decision-making and negative consequences for society. In personal relationships, Taleb emphasizes the importance of reciprocity and mutual investment to create strong and lasting bonds.

Tail End Events and Black Swans:
Taleb explains the concept of tail end events, which are rare and unpredictable occurrences with significant impact. He refers to these events as “Black Swans” and highlights their role in shaping history and markets. Taleb emphasizes the importance of understanding and preparing for tail end events to mitigate their negative effects.

Intellectual Humility and the Role of Experts:
Taleb stresses the importance of intellectual humility and skepticism, especially in the face of uncertainty. He criticizes the overreliance on experts and argues that their predictions are often unreliable. Taleb encourages individuals to think critically and independently, rather than blindly trusting authority figures.

Conclusion:
Hamer thanks Taleb for his insights and encourages listeners to read “Skin in the Game” for a deeper understanding of the concepts discussed in the interview.

Self-Reflection on Skin in the Game:
Taleb reflects on his book, “Skin in the Game,” discussing insights gained after finishing, publishing, and receiving feedback. He foreshadows future plans and projects.

The Inserto and Its Interconnectedness:
Taleb emphasizes the importance of viewing things as interconnected, not isolated parts. He uses the example of physical movement, where you don’t focus on specific muscles, but rather the whole body working together. This concept applies to various aspects of life, including the inserto, which cannot be separated from its context.

Evolution of Ideas:
Hamer observes the development of Taleb’s ideas from “The Black Swan” and “Fooled by Randomness” to “Antifragile” and now “Skin in the Game,” where they become fully realized.

The West’s Suicide:
Taleb expresses concern that the West is committing suicide through pseudo-rational thinking, such as relying on outdated models for decision-making. He uses immigration as an example, highlighting the dangers of minority rule and the need for symmetry in tolerance. Taleb criticizes the increasing role of bureaucrats and rent-seekers in government, leading to a decline in competence and an increase in bullshit jobs. He notes that big corporations also suffer from this problem, eventually leading to their downfall.

Public Figures Not Taking Risks:
Nassim Nicholas Taleb observes that fewer AAA corporations exist today compared to 25 years ago. Survival of large corporations has decreased, with the S&P 500’s life expectancy dropping from 60 years to around 10 years. Taleb emphasizes the need for institutions, like corporations and governments, to reset occasionally to prevent metastatic bureaucracies.

Bureaucrats Creating Unnecessary Regulations:
Taleb criticizes bureaucrats for creating excessive regulations, using the example of EU bureaucrats regulating woodshed wipers on farm tractors. He highlights the irony of bureaucrats being unable to guard their borders while regulating trivial matters.

The West’s Suicide and the Lack of Accountability:
Taleb argues that the West is committing suicide by allowing individuals to take risks that harm others without subjecting themselves to the same or higher risks. He contrasts this with historical examples, such as kings riding at the front of armies, and emphasizes the importance of accountability in positions of authority.

Islam’s Emphasis on Risk-Taking in Commercial Domains:
Taleb highlights the unique aspect of Islam that requires risk-taking for individuals to hold positions, especially in commercial domains. He suggests that Christianity missed out on this principle in medieval times by respecting military risk-taking but frowning upon commercial risk-taking.

The Game of Beating the System in Professions:
Taleb discusses how professions often involve individuals trying to beat the system and take advantage of loopholes. He uses the example of builders and doctors protecting their guilds instead of serving the public. He emphasizes the importance of constant pressure for survival in an open system, like the United States, to clear things up.

The Green Lumber Fallacy and the Importance of Inside Knowledge:
Taleb introduces the green lumber fallacy, where an individual with extensive knowledge about a subject from public domain information fails due to lack of essential insider knowledge. He contrasts this with someone from within the profession who may possess different but more relevant knowledge. He stresses the significance of bottom-up knowledge gained through survival and performance rather than theoretical knowledge.

Judging Performance vs. Self-Defined Numerical Performance:
Taleb argues that people are often judged by self-defined numerical performance, which allows for gaming the system. He emphasizes the importance of judging performance based on actual outcomes and survival rather than external factors like appearance or diplomas.

The Crystallization of the Concept:
Taleb mentions a friend, a former trader, who lost a significant amount of money due to a lack of accountability and risk-taking. This incident illustrates the importance of skin in the game and the need for individuals in positions of authority to face the consequences of their actions.

Peer-Based Evaluation Leads to Corruption:
Peer-based evaluation systems, like those found in academia and the restaurant industry, are prone to corruption and gaming. In these systems, individuals are judged by their peers, who have an incentive to favor those who they like or who they believe will benefit them. This leads to a situation where the system is rigged in favor of those who are good at self-promotion and networking, rather than those who are actually competent.

The Importance of End-User Evaluation:
In contrast to peer-based evaluation, end-user evaluation is a system in which individuals are judged by the people who actually use their products or services. This type of evaluation is more objective and less susceptible to corruption, as it is based on real-world outcomes rather than personal relationships or biases. Businesses that are judged by their customers are more likely to be successful in the long run, as they are forced to focus on providing high-quality products and services.

The Problem with Modernity:
Modern society is increasingly built around systems of peer-based evaluation. This is due to the rise of white-collar jobs, in which workers are evaluated by their superiors rather than by the customers they serve. This has led to a situation where people are more concerned with appearing virtuous and popular than with actually being productive or competent.

The Only True Virtue is Risk-Taking:
In a world where virtue signaling and the appearance of virtue are rampant, the only true virtue is risk-taking. This is because risk-taking is a virtue that cannot be faked. It is also a virtue that is essential for progress and innovation.

Risk-Taking and Prudence:
Economic risk-taking is honorable and essential for societal progress. Prudence involves considering the impact of actions on others and society as a whole. Risk-taking for personal gain is not honorable, while risk-taking for the benefit of others is an act of prudence.

Risk-Taking for the Sake of Others:
Saving lives or reducing risks for others is a form of prudence and risk reduction. Risk-taking should be evaluated in terms of its impact on the collective and not just the individual.

The Role of Risk-Takers in Society:
Risk-takers who start businesses and create jobs are heroes and should be celebrated. Rent-seekers and actors who replace risk-takers often harm corporations and society.

The Problem with NGOs:
NGOs often focus on superficial solutions that do not address root causes and may even create new problems. NGOs may be driven by a desire for attention and funding rather than a genuine concern for the people they claim to help.

Rationality of Action:
Science should focus on the rationality of actions rather than thoughts or beliefs. Preferences revealed through actions are more meaningful than stated preferences or opinions.

Cheap Talk vs. Authentic Risk-Taking:
Nassim Nicholas Taleb criticizes the prevalence of “cheap talk” in society, where individuals claim to value certain things but do not demonstrate it through their actions. He argues that authentic risk-taking is a more meaningful indicator of genuine appreciation or respect.

Rejection of Intermediaries:
Taleb emphasizes the importance of direct engagement with primary sources and original texts rather than relying on intermediaries who interpret or distort the message. He believes that intermediaries often engage in “cheap talk” and hinder direct access to the truth.

Respect for Acrobats and Risk-Takers:
Taleb draws attention to the admiration people have for acrobats and other risk-takers who perform without safety nets or protection. He suggests that this admiration stems from the innate human recognition of the value and significance of genuine risk-taking.

The Trinity and the Risk-Taking Christ:
Taleb explores the concept of the Trinity in Christianity, particularly the role of Jesus Christ as a risk-taker. He argues that the Christian concept of the Trinity reflects the need to reconcile the idea of a God who takes risks and sacrifices with the traditional notion of an all-powerful and invulnerable deity.

The Power of Risk in Human Nature:
Taleb emphasizes the innate human instinct to value and respect risk-taking behavior. He believes that risk-taking is deeply embedded in human nature and that individuals can detect genuine risk-takers from a distance.

Evolution and the Central Idea of Skin in the Game:
Taleb highlights the concept of evolution as a central idea in his book “Skin in the Game.” He suggests that there are many sub-ideas within the book, but the core idea revolves around the notion of evolution and its significance in various aspects of human behavior and decision-making.

Evolutionary Argument of Skin in the Game:
Skin in the Game is an evolutionary argument, not just about incentives or disincentives. Without Skin in the Game, there is no evolution, and top-down approaches to change (like creationism) are ineffective. Evolution works because it eliminates warmongers who put themselves in harm’s way, while preserving citizens who avoid risk.

Scaling in Risk-Taking:
Introduced the concept of scaling in risk-taking, which distinguishes individual risk-taking from collective risk-taking. Scaling goes against abstract universalism and promotes a fractal organization of caring, where priorities are given to those closest to us. Universalism can lead to absurd and destructive outcomes when applied universally, such as treating strangers equally to one’s own children.

Dynamics Versus Static Analysis:
Introduced the concept of dynamics versus static analysis in risk assessment. When survival filters are introduced, the attitude towards risk changes. Payoffs can no longer be analyzed as a simple cost-benefit analysis when there is a possibility of ruin.

Risk Avoidance and Ruin:
Avoiding ruin is crucial, especially in situations where small risks can accumulate and lead to catastrophic consequences. Example: Playing Russian roulette, despite having a favorable odds ratio, ultimately leads to ruin. Goldman Sachs’ longevity is attributed to their strict policy of avoiding tail risk and ruin.

Static vs. Dynamic Analysis:
Many strategies that appear rational in a static analysis can become irrational when viewed dynamically. Overestimating risks locally can be rational in the long term, considering the repetition and dynamics of risk exposure. Economic models that fail to consider ergodicity, or the long-term behavior of a system, are flawed.

Inequality Analysis:
Dynamic analysis of inequality reveals a more nuanced picture than static analysis. The IYI (intellectual yet idiots) may appear wealthy due to their low-variance lifetime situation, but they are not immune to financial setbacks. Dynamic inequality considers lifetime wealth fluctuations, revealing that the top 1% is not static and experiences turnover.

Wealth Persistence and Turnover:
Analyzing the persistence of wealth over time reveals that very few families maintain their wealth over generations. In contrast, Europe exhibits greater wealth persistence, with families maintaining their wealth for centuries.

Risk-Taking and Inequality Reduction:
Encouraging risk-taking among the wealthy can reduce inequality by promoting movement towards the top. Stability at the top can lead to crony capitalism and hinder economic mobility. Turnover in the S&P 500 indicates a healthy churn of established companies, preventing the accumulation of excessive power and wealth.

Libertarian Response:
The Tragedy of the Commons argument states that without government regulation, people will overfish and trash the commons. However, a study showed that fishermen don’t overfish when they are a certain size. This suggests that a libertarian response to the Tragedy of the Commons is possible. By scaling things correctly, people can take care of the commons themselves.

Localism:
Localism is a more specific approach to libertarianism. It suggests that control should be given to local units rather than a central government. Localism can solve problems such as minority rule and social tension. It allows for diversity across different systems, which promotes competition and choice.

Ethics of the System:
The ethics of the system should focus on preventing individuals from exercising power over others. This includes Monsanto, the government, and civil servants. Justice is a universal need, but the state may not be the best entity to deliver it. Localism can solve this problem by allowing people to choose the system they want to live under.

Comparison of Neighboring Countries:
Comparing neighboring countries with identical racial or ethnic compositions can be mind-boggling. For example, Dubai and Saudi Arabia have different mentalities despite being the same people. This suggests that scale, not political systems, is the more important factor in a country’s success.

Media’s Shortcomings and Fragility:
Nassim Taleb emphasizes the shortcomings of the media, particularly newspapers and journalists, in providing reliable information and analysis. He questions why individuals should seek advice from journalists, given their proneness to monoculture and fragility. Taleb argues that journalists’ overuse of labels like “fascist” and “racist” diminishes the significance of these terms, rendering them ineffective.

Bigoteering as a Dangerous Practice:
Taleb introduces the concept of “bigoteering,” which involves falsely accusing someone of sexism, racism, or other forms of bigotry to gain an advantage in a debate or dispute. He highlights the ease with which anyone can engage in bigoteering and the potential for it to lead to further division and conflict.

The Media’s Ineffectiveness and Its Failure to Predict Trump’s Victory:
Taleb points out the media’s ineffectiveness in shaping public opinion, as evidenced by Donald Trump’s electoral victory despite receiving minimal media support. He questions the media’s credibility, given their inaccurate predictions about Trump’s chances of winning and the consequences of his victory. Taleb advocates for ignoring the media and relying on alternative sources of information.

Critique of Cass Sunstein and the Establishment’s Mental Disease:
Taleb criticizes Cass Sunstein and other establishment figures for their perceived mental disease when it comes to Trump. He questions how fascism can exist in a society where individuals are free to write books criticizing the government and where journalists are not subject to persecution.

Taleb on Media Bias:
Nassim Nicholas Taleb believes that there are constraints on freedom of speech in the United States that are not present in countries like Russia. He points out that he was able to criticize the Russian government on Russian media without facing any repercussions, while he has faced criticism and backlash for expressing similar views in the United States.

The Impact of Fake News:
Taleb emphasizes the significance of the “fake news” effect and the way information is interpreted by the media. He has witnessed instances where CNN and other media outlets have distorted or misrepresented information, leading to biased and inaccurate reporting.

Ignoring the Media and Relying on Lindy:
Taleb advises people to ignore the media and wait for information to reveal itself over time. He believes that the media, particularly in its current form, is not “Lindy” because it has not survived the test of time and does not reflect the organic nature of information transmission.

The Need for Critical Thinking:
Taleb highlights the importance of critical thinking and the ability to analyze information objectively. He emphasizes the need to seek out multiple sources of information and consider different perspectives before forming opinions.

The Traditional Role of Media:
Taleb argues that in the past, people were not passive recipients of information but actively engaged in transmitting and discussing it. He believes that the current media landscape, where people are bombarded with information without the opportunity for interaction, is fundamentally flawed.

The Power of Organic Storytelling and Social Media:
Social media has transformed storytelling, making it more organic and based on personal connections rather than dictated by traditional media outlets.

The Genesis of Reliable Information:
In the midst of information overload, reliable information emerges as the most valuable commodity. Social media platforms allow individuals to assess the reliability of information sources over time, leading to the development of a “jewel to the information.”

The Importance of Integrity and Reputation:
Individuals value the integrity of information sources and adjust their behavior accordingly. Building a reputation for providing reliable information is essential for maintaining a strong following.

The Prevalence of Confirmation Bias:
A significant problem in the current media landscape is confirmation bias, where individuals seek out information that confirms their existing beliefs. This leads to the proliferation of misleading stories that reinforce preconceived notions.

The Principle of Charity:
To accurately understand the meaning behind someone’s words, focus on their actions and past behavior, not just their statements. This principle helps avoid misinterpretations and promotes a more charitable approach to understanding others.

The Ethics of Journalism:
Ethical journalism involves representing the ideas of opponents faithfully and accurately, rather than focusing on sensationalized statements. This approach allows for more meaningful discourse and prevents the misrepresentation of ideas.

The Anti-fragility of Some Individuals:
Certain individuals become anti-fragile to attacks, gaining strength from negative criticism. This resilience can stem from a strong conviction in one’s ideas and the ability to turn negative feedback into positive growth.

The Value of Ignoring Negative Reviews:
Engaging with negative reviews can be counterproductive and detract from more meaningful pursuits. Focusing on positive feedback and the support of those who appreciate one’s work is more beneficial.

Religion and Epistemological Humility:
Religion’s purpose is to foster epistemological humility, preventing individuals from thinking they are God. Religion also enforces rules that individuals might not otherwise follow and provides a means to transmit interdicts.

Science vs. Religion:
Science is narrow and specific, while religion is broad and holistic. Science tells us what we can know, while religion tells us what we should do. Religion is not about epistemic beliefs, but rather procedural or mistake beliefs.

Tolerance and Intolerance in Religion:
Ancient pagan Mediterranean religions were generally tolerant, allowing for the worship of multiple gods. Monotheistic religions tend to be more intolerant, with fewer gods leading to greater intolerance. ISIS, with its single god, exemplifies maximal intolerance.

Marriage Rules and Religious Dominance:
Intolerance in marriage rules, such as requiring children to follow a certain faith, can lead to long-term shifts in religious demographics. Shiite Islam is the most tolerant branch of Islam, similar to Christianity in its tolerance.

Jordan Peterson’s Commodification:
Taleb warns against the commodification of individuals, as happened to Jordan Peterson after the success of his book. Commodification can lead to burnout and a loss of one’s true self.

Taleb’s Reaction to Success:
Nassim Taleb experienced a brief moment of success with his book “The Black Swan,” but he quickly realized that it led to a loss of control over his life and activities. To regain control, he imposed strict limits on his public engagements and interviews, allowing only a few lectures and podcast appearances each year. He emphasized the importance of dedicating time to private life, production, and spending time in his library.

Jordan Peterson’s Mission and Success:
Jordan Peterson has a mission to promote certain ideas and impact society, which may require engagement through podcasts, trips, and lectures. His followers seek more engagement to drive change, which may not be achievable through another book. Taleb acknowledges that Peterson’s mission is important, particularly in the context of fighting for freedom of thought and intellectual diversity in universities.

Taleb’s Perspective on Peterson’s Mission:
Taleb understands Peterson’s mission and respects his dedication to fighting for intellectual diversity and freedom of thought. He believes that Peterson may be doing a good job in his mission and recognizes the significance of Peterson’s efforts in this regard.

Taleb’s Regret:
John Faithful Hamer expressed sadness that Taleb and Peterson have not connected despite their shared interest in intellectual freedom.

Frustration with the Economic Establishment:
Taleb expresses his disappointment with the economic establishment, particularly with the actions of President Obama and Geithner, who gave bankers the biggest bonus in history despite the financial crisis. He recognizes that the so-called left-wing in society often supports crony capitalism and militarism. Taleb labels this group as the “pseudo-left” and contrasts it with the real left, represented by individuals like Ralph Nader.

Shift in Media Strategy:
Taleb realizes that engaging in confrontational media interviews is unproductive and ineffective. He decides to focus on writing works that can withstand the test of time rather than winning short-term arguments in the media. Taleb finds enjoyment in engaging in Twitter interactions during his breaks from weightlifting sessions.

Killing Time:
Taleb uses social media, particularly Twitter, as a way to kill time during his breaks from weightlifting. He finds that engaging in online debates and discussions is a good way to pass the time and keep his mind active.

Interaction with Susan Sontag:
Taleb recounts an encounter with Susan Sontag at a radio station. Sontag criticized Taleb’s book on randomness, claiming that it lacked rigor and was full of anecdotes. Taleb was initially taken aback by Sontag’s criticism but later came to appreciate her honesty and directness.

Taleb’s Encounter with an Author:
In 2001, Taleb met an author whose reaction to his book on randomness was hostile, as if he had committed a personal offense. The author’s assistant treated Taleb with disdain, suggesting he was considered a criminal. Years later, Taleb discovered that the author lived in a $17 million mansion, contrary to her humble appearance.

Taleb’s Upcoming Projects:
Taleb has an open project called “Insertio,” which he may or may not close. He is also working on a technical insertio, which is a collection of peer-reviewed papers with commentary. Taleb enjoys doing mathematics and finds it pleasurable to write math books. He appreciates the ability to typeset, publish, and control the entire process of creating a math book himself.

Taleb’s Love for LaTeX:
Taleb praises LaTeX as an open-source software that allows for complete control over the text’s organization and aesthetics. He believes LaTeX is the best way to organize a text and appreciates its aesthetic qualities. Taleb criticizes publishing houses for not having personnel who are proficient in LaTeX. He considers LaTeX the “Unix of publishing” and expresses his desire to start his own publishing house that uses LaTeX.