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October 18 - November 22, 2018
In countries such as the U.S., where wealth can come from destruction, people can easily see that someone getting rich is not taking dollars from your pocket; odds are he is even putting some in yours.
In this chapter, I will propose that what people resent—or should resent—is the person at the top who has no skin in the game, that is, because he doesn’t bear his allotted risk, he is immune to the possibility of falling from his pedestal, exiting his income or wealth bracket, and waiting in line outside the soup kitchen.
There is something respectable in losing a billion dollars, provided it is your own money.
True equality is equality in probability.
Skin in the game prevents systems from rotting.
Static inequality is a snapshot view of inequality; it does not reflect what will happen to you in the course of your life.
Dynamic (ergodic) inequality takes into account the entire future and past life.
The way to make society more equal is by forcing (through skin in the game) the rich to be subjected to the risk of exiting from the 1 percent.*4
Dynamic equality is what restores ergodicity, making time and ensemble probabilities substitutable.
Perfect ergodicity means that each one of us, should he live forever, would spend a proportion of time in the economic conditions of the entire cross-section: out of, say, a century, an average of sixty years in the lower middle class, ten years in the upper middle class, twenty years in the blue-collar class, and perhaps one single year in the one percent.*5, *6
The term absorption is derived from particles that, when they hit an obstacle, get absorbed or stick to it. An absorbing barrier is like a trap, once in, you can’t get out, good or bad.
And no downside for some means no upside for the rest.
The book, Capital in the Twenty-first Century, makes
aggressive claims about the alarming rise of inequality, adding to it a theory of why capital tends to command too much return in relation to labor and how the absence of redistribution and dispossession might make the world collapse.
From conversations, I became convinced that people who counterfactual upwards (i.e., compare themselves to those richer) want to actively dispossess the rich. As with all communist movements, it is often the bourgeois or clerical classes who are the early adopters of revolutionary theories.
cobbler envies cobbler, carpenter envies carpenter. Later, Jean de La Bruyère wrote that jealousy is to be found within the same art, talent, and condition.*10
The intelligentsia therefore feels entitled to deal with the poor as a construct; one they created. Thus they become convinced that they know what is best for them.
Further, people mistake empiricism for a flood of data.
Just a little bit of significant data is needed when one is right, particularly when it is disconfirmatory empiricism, or counterexamples: only one data point (a single extreme deviation) is sufficient to show that Black Swans exist.
Probability, statistics, and data science are principally logic fed by observations—and absence of observations.
not realizing that statistics isn’t about data but distillation, rigor, and avoiding being fooled by randomness—but no matter, the general public and his state-worshipping IYI colleagues found it impressive (for a while).
It is downright unethical to use public office for enrichment.
A good rule for society is to oblige those who start in public office to pledge never subsequently to earn from the private sector more than a set amount; the rest should go to the taxpayer.
Time is the expert. Or, rather, the temperamental and ruthless Lindy, as we see in the next chapter.
Clearly, it has no upside from random events and, more generally, disorder. (More technically, being fragile, it necessarily has a nonlinear reaction to stressors: up until its breaking point, shocks of larger intensity affect it disproportionally more than smaller ones).
Now, crucially, time is equivalent to disorder, and resistance to the ravages of time, that is, what we gloriously call survival, is the ability to handle disorder. That which is fragile has an asymmetric response to volatility and other stressors, that is, will experience more harm than benefit from it.
by things we mean ideas, people, intellectual productions, car models, scientific theories, books, etc.
Effectively Lindy answers the age-old meta-questions: Who will judge the expert? Who will guard the guard? (Quis custodiet ipsos custodes?) Who will judge the judges? Well, survival will.
That which is “Lindy” is what ages in reverse, i.e., its life expectancy lengthens with time, conditional on survival.
Burn old logs. Drink old wine. Read old books. Keep old friends.
You can define a free person precisely as someone whose fate is not centrally or directly dependent on peer assessment.
Being reviewed or assessed by others matters if and only if one is subjected to the judgment of future—not just present—others.
Contemporary peers are valuable collaborators, not final judges.*3
Academia has a tendency, when unchecked (from lack
of skin in the game), to evolve into a ritualistic self-referential publishing game.
Anything that smacks of competition destroys knowledge.
once upon a time, studying post-colonial theories could help one get a job other than serving French fries. No longer.
One should give more weight to research that, while being rigorous, contradicts other peers, particularly if it entails costs and reputational harm for its author.
Someone with a high public presence who is controversial and takes risks for his opinion is less likely to be a bull***t vendor.*4
Force people who want to do “research” to do it on their own time, that is, to derive their income from other sources. Sacrifice is necessary. It may seem absurd to brainwashed contemporaries, but Antifragile documents the outsized historical contributions of the nonprofessional, or, rather, the non-meretricious.
The longer an idea has been around without being falsified, the longer its future life expectancy.
For things to survive, they necessarily need to fare well in the risk dimension, that is, be good at not dying.
If you hear advice from a grandmother or elders, odds are that it works 90 percent of the time.
Men feel the good less intensely than the bad.*6
The good is not as good as the absence of bad,*7
When our souls are mollified, a bee can sting.
Time discounting:
Nietzsche: Madness is rare in
individuals, but in groups, parties, nations, it is the rule.
Truth is lost with too much altercation,
