The point isn't that skin in the game causes better decision-making, the point is that the losers exit the gene pool. If you walk into any restaurant in the United States, you can bet the food is of better quality than that of a Soviet-era cafeteria. The difference? One group has skin in the game and must compete or die. One group doesn't. Skin in the game ensures the health of the restaurant industry (as measured by, say, quality of food), not the health of any one restaurant.

As for your assertion re: experts in "closed" vs "open" systems, the issue is less one of "open" systems requiring humility, and more that "open" systems are statistically filled with BS artists. Why? Because they don't have the filtering mechanism that gets rid of those people. A fake dentist can't pull the wool over patients' eyes for long, but a macroeconomist can do just that for his entire career.

People who have been 'weeded out of the gene pool' are non-experts. I don't classify them as experts to begin with. Even with open systems, to qualify as an expert in any sense, you need to have some kind of a track record, otherwise you're not an expert, you're just a bullshit artist, and your opinion is immaterial (immaterial to me at least, they may have a great deal of influence on others, which I guess is something that needs to be factored in to any predictions you make re: cult of Elon vs. Tesla shorts). Someone claiming to be an expert is not necessarily an expert, that's the first distinction that needs to be made.

Are you asserting that all economists and financial goobs are "BS artists," or merely most? Is there a way to tell the difference better than "he hasn't gone belly up yet"?

They're only asserting that some economists could get away with being "BS artists," so inevitably, some do. Obviously that hurts the study of economics as a whole, because if you can get away with BS, that means people can't tell what is and is not BS, so non-BS looks like BS and has to compete on points other than merit.

Certainly Taleb is referring to all economists, give or take a handful, not just some.

That doesn't matter. The point still stands so long as it is true for at least one economist.

> The executives at Blockbuster had skin in the game, they were experts, they got their asses kicked. Last election the Democrats had skin in the game, they were experts, they got their asses kicked. Recently the institutional Tesla shorts had skin in the game, they are experts, they got their asses kicked. So what does having skin in the game have to do with anything? Not much.

None of these examples show skin in the game. Executives at Blockbuster were almost all certainly wealthy prior to its demise, and its failure probably didn't affect their future earnings potential/job prospects. Institutional investors (non hedge fund) by definition have no skin in the game. Even by posting disappointing returns, a lot of their compensation is tied to a management fee, with future job prospects being lightly tied to prior returns.

My argument is that all experts should be looked at skeptically. Without the proper incentives/punishments for incorrect predictions, it doesn't matter to said expert whether they are right or wrong. Even with the "closed system" experts, mistakes are made. In the article, the author talks about car engines as a closed system. So why have there been so many car recalls?

Obviously expecting experts to be correct every single time is foolish, but my point is that for the most part, because the disincentive for an incorrect prediction is not proportional to the weight of the prediction, most expert claims should be taken skeptically.

Ironically, I believe car engines and cars more broadly have become a much more "open system" due to all of the software and firmware and other technological advances in them.

You’re making unjust light of the phrase “skin in the game”. Your version is more like “potential monetary gains in the game”. To overlook the difference is to undermine the utility of the phrase. Simply, risking one’s own skin is anything but equivalent to risking potential monetary gains, and all the more so when the remainder of your life’s financial needs are secure and the profits at stake is mere bonus.

My understanding of the Democrats in the last election is precisely that they were unwilling to have “skin in the game”. It appears that if they had embraced class politics, (the tradition of the American Democratic Party) the election would have been theirs. Because they were unwilling to take that risk, which so many with undeniable “skin in the game” demanded of them, they would have won. Or in other words, they did not have “skin in the game”. Maybe if such a risk were necessary to enter the race, they would have sat it out, in which case we could be quite certain.

To make any claim at all you have at the very least wagered your integrity. At the other extreme you've got someone like the free soloist Alex Honnold, who wagers his life every time he scales a cliff without safety equipment. So what does 'skin in the game' even mean? It's kind of irrelevant. Although when Taleb talks about it, he makes it clear he refering largely to financial risk.

>So what does ‘skin in the game’ even mean? It’s kind of irrelevant.

No it’s not. It’s precisely the topic of debate. I see where you’re coming from though. Your concern is with the author’s authority over the phrase, whereas mine is with the nature of the critique, namely the carelessness and inaccuracy resulting in it’s practice.

I have never read this book, but it’s synopsis alludes no more than free market theory; numbingly basic material. Does this catch-phrase add anything to the argument? I cannot imagine how it would. This is nuance-free run-of-the-mill narcissist apologism as motivational speak. Don’t be fooled.