Skin in the Game: Hidden Asymmetries in Daily Life (Incerto, #5)

by Nassim Nicholas Taleb

Geoff and Vince

Graham summarizes the ludicrousness of scale-free

political unive...

I am, at the Fed level, libertarian; at the state level, Republican; at the local level, Democrat; and at the family and friends level, a socialist.

The main idea behind complex systems is that the ensemble behaves in ways not predicted by its components. The interactions matter more than the nature of the units.

This is called an “emergent” property of the whole, by which parts and whole differ because what matters are the interactions between such parts.

And interactions can obey very simple rules.

minority rule, the mother of all ...

It suffices for an intransigent minority—a certain type of intransigent minority—with significant skin in the game (or, better, soul in the game) to reach a minutely small level, say 3 or 4 percent of the total population, for the entire population to have to submit to their preferences. Further, an optical illusion comes with the dominance of the minority: a naive observer (who looks at the standard average) would be under the impression that the choices and prefe...

An honest person will never commit criminal acts, but a criminal will readily engage in legal acts.

First, the

geography of

the terrain, that is, the spatial stru...

a...

the cost structure matters quite a bit.

The method of analysis employed here is called a “renormalization group,” a powerful apparatus in mathematical physics that allows us to see how things scale up (or down).

next—without mathematics.

French physicist Serge Galam

So the same illusion exists in political discussions, spread by political “scientists”: you think that because some extreme right- or left-wing party has, say, the support of ten percent of the population, their candidate will get ten percent of the votes. No: these baseline voters should be classified as “inflexible” and will always vote for their faction. But some of the flexible voters can also vote for that extreme faction, just as non-kosher people can eat kosher. These people are the ones to watch out for, as they may swell the number of votes for the extreme party.

Galam’s models produced a bevy of counterintuitive effects in political science—and his predictions have turned out to be way closer to real outcomes than the naive consensus.

“veto” effect, as a person in a group can steer choices.

Genes follow majority rule; languages minority rule. Languages travel; genes less

so.

I have been repeating to everyone who listens, we are a federation, not a

republic. To use the language of

Antifragile, decentralization ...

varia...

Let us conjecture that the formation of moral values in society doesn’t come from the evolution of the consensus. No, it is the most intolerant person who imposes virtue on others precisely because of that intolerance. The same can apply to civil rights.

Outcomes are paradoxically more stable under the minority rule—the variance of the results is lower and the rule is more likely to emerge independently across separate populations. What emerges from the minority rule is more likely to be black-and-white, binary rules.

Can democracy—by definition the majority—tolerate enemies? The question is as follows: “Would you agree to deny the freedom of speech to every political party that has in its charter the banning of freedom of speech?” Let’s go one step further: “Should a society that has elected to be tolerant be intolerant about intolerance?” This is in fact the incoherence that Kurt Gödel (the grandmaster of logical rigor) detected in the United States Constitution while taking the naturalization exam. Legend has it that Gödel started arguing with the judge, and Einstein, who was his witness during the process, saved him. The philosopher of science Karl Popper independently discovered the same inconsistency in democratic systems.

Quote for Wonky Activist Talk page

Yes, an intolerant minority can control and destroy democracy. Actually,

it will eventually destroy our world.

So, we need to be more than intolerant with some intolerant minorities. Simply, they violate the Silver Rule. It is not permissible to use “American values” or “Western principles” in treating intolerant Salafism (which denies other peoples’ right to have their own religion). The West is currently in the process of committing suicide.

Devastating quote for liberals.

Yes, the most motivated rules.

The overall stock markets currently represent more than thirty trillion dollars, but a single order in 2008, only fifty billion, that is, less than two-tenths of a percent of the total, triggered a drop of close to 10 percent, causing losses of around three trillion dollars. As retold in Antifragile, it was an order activated by the Parisian bank Société Générale, which discovered a hidden acquisition by a rogue trader and wanted to reverse the purchase. Why did the market react so disproportionately? Because the order was one-way—stubborn: they had to sell and there was no way to convince the management otherwise.

The market is like a large movie theater with a small door.

Society doesn’t evolve by consensus,

The average behavior of the market participant will not allow us to understand the general behavior of the market.

at a certain scale, things become different.

Mathematically different. The higher the dimension, in other words, the higher the number of possible interactions, and the more disproportionally difficult it is to understand the macro from the micro, the general from the simple units.

This disproportionate increase of computational demands is called the c...

(I have actually found situations where, in the presence of small random errors, a single additional dimension may more than double some aspect of the complexity. Going from 1,000 to 1,001 may c...

Understanding the genetic makeup of a unit will never allow us to understand the behavior of the unit itself.

Under the right market structure, a collection of idiots produces a well-functioning market.

It

may be that be that some idiosyncratic behavior on the part of the individual (deemed at first glance “irrational”) may be necessary

for

efficient functioning at the coll...

Individuals don’t need to know where they are going; markets do.

every organization wants a certain number of people associated with it to be deprived of a certain share of their freedom.