Inequality and Skin in the Game
medium.com
Inequality and Skin in the Game
1–10 of 70 posts
Re: Inequality and Skin in the Game
#2It is shocking that people continue to cite Piketty. His results have been more or less shot down completely - his measurements are unstable (taken), and insofar as he has shown r > g, this is primarily due to middle class household wealth (rognlie). Further, his results are only within country and don't apply globally (c.f. Milanovic).
But his results are just so convenient and sound so cool. How can we discard them for something as silly as being totally wrong?
Re: Inequality and Skin in the Game
#3Caveat: I did not read the entire article.
I think the idea of "skin in the game" as described in the intro is close but not quite right. It's not about "falling from the pedestal" as such; it's about bearing the costs of your actions in fair proportion. This is an old argument: politicians make war, but it's working-class teenagers who actually go to war. Therefore people resent politicians for starting wars because the people being sent to die are not responsible for the war, while the people responsible for the war are not being sent to die. It's about fairness.
Re: Inequality and Skin in the Game
#4Caveat: I did not read the entire article. I think the idea of "skin in the game" as described in the intro is close but not quite right. It's not about "falling from the pedestal" as such; it's about bearing the costs of your actions in fair proportion. This is an old argument: politicians make war, but it's working-class teenagers who actually go to war. Therefore people resent politicians for starting wars because…
While I think you're close, the war example is not fitting unless people are forced to go to war. If they decide to do go to war voluntarily, then it's IMO partly their fault.
Probably a better example is CEOs who get big bonuses if the company goes well but will get a good pension and other benefits ("golden parachute") if they are fired after a few months because of bad performance. It's kind of win / win for them, so a loss for everyone else.
Same holds for a risky bank that keeps its profits (if there are any) or gets a (taxpayer funded) bailout if "profits are negative".
Re: Inequality and Skin in the Game
#5Caveat: I did not read the entire article. I think the idea of "skin in the game" as described in the intro is close but not quite right. It's not about "falling from the pedestal" as such; it's about bearing the costs of your actions in fair proportion. This is an old argument: politicians make war, but it's working-class teenagers who actually go to war. Therefore people resent politicians for starting wars because…
Fairness is not apropos, the idea of skin in the game is a heuristic to identify decision-makers who are likely (or not) to expose others to harmful risks. If anything, the skin in the game should be even more than proportional. The system can survive local failure (death of a general or economist) as the price of encouraging better risk-taking.
Re: Inequality and Skin in the Game
#6I think the distinction between those who have "skin in the game" and those who survive on arbitrary indicators of prestige is an important one culturally, but especially as applied to Trump, I still think it's weird Taleb doesn't address any distance between perceived skin in the game and actual. Saying "Trump's a businessman who takes real risks, Krugman's just a writer who will never answer for mistakes" ignores that Trump is a media figure at least as much as he's a businessman, and has put effort his entire career towards presenting that image (as a businessman who takes real risks) regardless of the truth. Is Trump really more likely to end up going to a soup kitchen than Krugman? Are the elaborate terms of his bankruptcies really "losing your own money, not someone else's?" Or is he just trying to present himself that way?
I agree that there's a serious problem in society of people coasting on their arbitrary degrees/status/reputation in a way that lets them take no responsibility for their mistakes; see Theranos/general examples of VCs focusing on style over meritocracy, see diploma mills and rent-seeking prestige colleges, see Ross Douthat's career (if the mainstream media wants to restore faith and trust, the best thing they could do would be to fire people who continue to screw up...) But the other issue, of resentment against the mandarin class, people waking up and getting angry against those without skin in the game; that's a matter of perception, not reality. Heck, Trump switching to the Apprentice after facing bankruptcy seems exactly the sort of coasting based on arbitrary celebrity Taleb might despise in a different context. If we want to understand the effects of the mandarin class, we should figure out not just who has "skin in the game" or not, but the level of cultural and media fluff that leads people to believe that someone has skin in the game or not.
Re: Inequality and Skin in the Game
#7Caveat: I did not read the entire article. I think the idea of "skin in the game" as described in the intro is close but not quite right. It's not about "falling from the pedestal" as such; it's about bearing the costs of your actions in fair proportion. This is an old argument: politicians make war, but it's working-class teenagers who actually go to war. Therefore people resent politicians for starting wars because…
While I think you're close, the war example is not fitting unless people are forced to go to war. If they decide to do go to war voluntarily, then it's IMO partly their fault. Probably a better example is CEOs who get big bonuses if the company goes well but will get a good pension and other benefits ("golden parachute") if they are fired after a few months because of bad performance. It's kind of win / win for them,…
And as long as the general consensus is that a good CEO can change everything, CEOs will be able to attract these contracts that has serious assymetric risk/benefit profiles.
Re: Inequality and Skin in the Game
#8This guy's writing style is insufferable. Basically, 'let me introduce an abstract, technical concept, criticize the reader for not knowing it, and then not define it until halfway through the article'
Dropping words like 'Markov Chain' in a Medium post without any context or explanation just makes the author seem like he wants us to think he's smart.
Re: Inequality and Skin in the Game
#9I've read my share of socio-economic philosophizing, but did anyone else find this a slog to read through?
Re: Inequality and Skin in the Game
#10Looking forward to the discussion on this. Can anybody help me understand his use of "rent seeker" or "rent seeking"?