Skin in the Game

Skin in the Game

The call came on a Sunday afternoon in October 2008. Robert Rubin, former U.S. Treasury Secretary and then-senior advisor at Citigroup, was somewhere in his Manhattan apartment when news broke that the federal government was preparing a $45 billion rescue of the bank. Citigroup had gorged itself on mortgage-backed securities. The bets had curdled. Taxpayers would foot the bill. Rubin had collected more than $115 million in pay from Citigroup over the preceding eight years. He would not be asked to return a dollar of it.

Nobody went to prison. Nobody got clawed back. The people who caused the damage walked away with their winnings intact, and the losses were distributed to strangers who had never signed up to play. A trader at a hedge fund who is wrong loses his job and possibly his shirt. A senior banker who is catastrophically wrong gets a government bailout and keeps his mansion in Connecticut. This asymmetry -- reward without risk, upside without downside -- is what Nassim Nicholas Taleb spent a career identifying as one of the most corrosive forces in modern civilization.

Skin in the Game, published in 2018 as the fifth entry in Taleb's Incerto series, is his attempt to systematize that intuition into a philosophy. It follows Fooled by Randomness, The Black Swan, The Bed of Procrustes, and Antifragile. The dedication page offers two names: Ron Paul, "a Roman among Greeks," and Ralph Nader, "Greco-Phoenician saint." The pairing is deliberate. Paul and Nader agree on almost nothing politically. But both have spent decades fighting for accountability -- for the idea that the people making decisions about your life ought to have something personal riding on the outcome. That convergence across the political spectrum is itself a hint that the principle Taleb is after cuts below ideology.