Transcription
As far as decision-making, I have a very strict rule. I am not allowed to give you advice if I'm not going to be harmed by the advice. If you have skin in a game, you may not understand things verbally, but you understand how things work if you've survived. Because systems do not learn. Systems do not learn by convincing. Systems learn, you know, by evolution, by basically killing the the the person who doesn't, okay? So that's how systems learn. To give you a very simple idea, there was an article today saying that people who have near misses in car accidents, it doesn't make them more careful uh drivers. And my whole idea of skin in the game, I explain it here. Why is it that when I drive on a highway, you don't have a nut killing 30, 40 people? Why? They're already because they have skin in the game. So skin in the game puts a symmetry between people. Okay?
And, and one minute parenthesis, let me talk about the ethics of it. All of this started with Hammurabi. Hammurabi had the first rule that was both moral and risk management and practical. If someone builds a building, the architect, the building collapses, you can't just walk away and say, "Hey, you know what? I'm I'm in uh Arizona. Goodbye." You know, right? No, you call back the architect and he's put to death. If the owner of the house is killed, the architect's put to death. Okay?
So, this is the eye for an eye. The the later came two principles. Eye for an eye. But the eye for an eye, people have the illusion the eye for an eye is a vindictive thing. To the contrary, it's a limitation thing. Mhm. And it's not eye for eye literal because basically if someone's blind makes a mistake and harms someone intentionally or harms who, you know what, what do you, what do you do? He's exempt because he lost his eyesight. So there have been some Talmudic discussions on eye for eyes telling you really it's not literal.
But the interesting thing, now this led to several rules. The first rule is the the the golden rule. Do to others what you want them to do to you, which I go against. And then there's the silver rule. Do not do to others what you don't want them to do to you. Right? Which to me is massively more robust. Why? Because the "do to others what you want them to do to you." What if you're an idiot? So, okay. All right. So, so what if you don't know your own interest? Okay. So, so that's the idea. Is is I I want you to dress in and in and in and and you know, I will only allow you to dress in pink because I want to dress in pink.
So the whole idea, plus that rule leads to something uh that Kant took it all right and called universalism. Kantian universalism. Act in all time and place as if it were, you know, okay. So the problem is, my whole problem with skin in a game is that universalism does not work. Okay? You are not a physicist from uh uh whatever born here, or you're not. You are a person in in flesh. You are Priya. So he is not an African-American. He is Joe. All right? You cannot apply universal rules. And you can show, I can show empirically how things are fractal. So in other words, you cannot go for Kant. There's an individual and then there's humanity or maybe also not just humanity, there's also other. You cannot. If I don't like my cat more than I like a cockroach, you. If I don't protect my children more than a stranger. Okay. Although I would like to protect the stranger as well. If you don't have these gradation, fractal gradation, things don't work.
And so there is a fractal, right? Things. And here I start talking a lot about the work of Elinor Ostrom, who is not an economist but a political scientist but had that pseudo Nobel in economics. And she understood how fishermen works. They have a unit that works up to 200, 300 fishermen. They are collaborative. Mhm. And you were asking me earlier about collaboration versus competition. Beyond, they become adversarial. Right? Hence, you have a scale at which things operate. And so in my book, "Skin in the Game," the more analytical part of it would tell you that I address problems that were dealt with statically by putting dynamics and uh a scale. To give you an idea about a scale, behavioral finance, they have a field called behavioral finance. I think they should shut it down. The principle is, if I predict how Joe works, all right, and Jean works, I can predict how the market works. All right? Now, if I predict how each and every one of you behaves, I cannot predict the collective. Okay? Just try observing children alone and then put them together in a room. Right? Okay. They can become from well-behaved to rambunctious. Okay. The same thing. The market doesn't work as a sum of participants, but it's another animal. You have a transformation, scale transformation. I put 100 people together, they're another animal. Now have a crowd.
So now that I agree with you on Habui and I love the Mesopotamians. So let's, I said, you know, I wanted to um edge a question in to provoke you a little bit. Yes. Not that you need uh more provocation. But so in "Skin in the Game," you make the point, right, that um one must affirm in daily life and in principles what one claims to believe. So practice what you preach. So this raises an interesting conundrum. So should we reject, for example, Rousseau's view on how to raise children because he abandoned his own? Or, you know, something that's closer to my heart. So should the enjoyment of the work of an art, a work of art or a book be colored by how the author led his or her life? If, for example, an author was a total sexist pig in his personal life and did not respect women at all. I mean, should I, as a woman, really transcend that?
Let me tell you. Yes. There are two answers. First, as as far as Rousseau, if he gave his children uh for adoption, I will not follow anything he says about educating children, right? Or how to deal with children or anything about morality because even at a time it was not moral. If someone behaved in a certain way, you, you know that uh uh just as as knowledge our knowledge grows, right? Okay. Our ethics, body of ethics evolved over time. Civil rule did not exist before. The Romans. The civil rule was not applied by the Romans, which I think should be applied. Treat other states the way you you want other states to treat you. All right? And the Romans would go beat the crap out of anybody, you know, because they liked it. Okay. So, so can I judge the Romans backwards using today's norms? No. But you have relative to the time, you can say is more ethical than other people at a time. So you have statutes of limitation, just like simply because you can't blame people for not having the internet in 1820. You see? Because you know, if we think that these rules have evolved, our notion of justice is evolving. You don't want tomorrow someone to say, "She ate meat." I don't know if you're vegetarian. I am. You're vegetarian. All right. But me, someone will judge me. "Hey, this guy don't read the Incerto. He ate cow meat." All right, for example. You see the point? Okay.
But as far as decision-making, I have a very strict rule. I am not allowed to give you advice if I'm not going to be harmed by the advice. Period.
But you accept the consequences.
I accept the consequences. I can only give you advice on what harm, for example, can't tell you what to buy. I tell you what I've bought. Okay. Now, when it comes to judging Rousseau, taking advice that a lot of people, the problem with again, if people don't lead the life that they advocate, there is a problem because their message means they can't even apply to themselves. So forget about that's kind of the game. That's epistemology 101. Right?
So, but so then this leads me to then, what is your vision for an ideal society? Because, you know, this is what we're skirting around.
So how much longer do we have here?
Less two minutes.
Okay. All right. So I see. So an ideal society is a society that's built where no one makes decisions entailing others with impunity. Period. Okay? If you want. So, and you can build a society like that. It's called Switzerland. Switzerland is fractal, bottom-up. You don't know the name of the president. Okay? You because it's decentralized. And the central state's sole job is to remedy things or work on things that, you know, every small little, you know, doesn't want to deal with. Okay? That's it. Just that. It's not a country. It is a uh collection of collection of municipalities at a municipal level. And then the other thing about political systems, I don't believe in right-left stuff like that because I said it. If at the national level, I can be easily libertarian, Republican at a state level, and communist, okay, at the commune level. Okay? You can you can be all of them. It's just the level of the the scale at which you will act because once we say that there's a scaling. So this is why Singapore works, but not China doesn't work as well. You see, socialism works, may work in the kibbutz, but not in the Soviet Union. Right? This is where. So the ideal society is which one in which the decision of whatever you want to do is taken locally and flows up rather than is imposed from the top. And also one in which you, the newspaper journalists, because they're in the 1% of people who don't have skin in the game. So my idea is my morality is if you are a public figure, then with it comes more risk-taking. So if a journalist's job and responsibility and responsibility, I'm responsible to expose fraud. That's a journalist's job, not to start getting into collective uh uh uh you know, monoculture, right? You have to stray. And you see all of them, they they lump. And you have evidence that they they they they cluster. All right? You cannot cluster. For example, and there are other things like, for example, I say, if if I am a, I don't want to be a public figure except for things that entail some risk when I voice them, right? So when I called Reuben fraud, okay, that was something that caused me some problems. All right? So and then I had attacked Monsanto. It caused me some problems. I'm exhilarated because it gives me skin in the game because life is about risk-taking. Okay. And so that's the idea of society.
But um, before we open up to questions, uh quickly, is there anything new in the works? Do you have a book? A book that's uh
Because I think we're all.
Don't tell my publisher. The uh no, I mean, the Incerto is five volumes. There is a technical version coming out and it's done. It's on the web for free.
Great.
Um, and I'm starting a publishing house for it simply because Springer wants to price a book at $150, $150, and I want it to be at about $20, okay, in color. So, uh, so I'm starting a publishing house, a technical book, uh, the volume one of the technical Incerto.
So I think before we open up, I just wanted to say, um, I think it's fantastic to have people like you, contrarians, risk.
I'm not contrarian. Contrarian means I mean it's like you agree with.
Just to provoke your idea.
Yeah. Exactly. No, the idea is, are you in? I don't think everything you hear, you're a traitor. You read, you believe half of what you read, none of what you hear. And and and what do you mean half of what you read? You read none of what you read, none of what you hear, and half what you see. All right. To make.