John Livingston

Skin in the Game

Successful people in any walk of life understand that it is more difficult to deal with success than it is with failure. It has been proven statistically that if a good golfer makes a birdie on a hole, the chance of the next hole being a bogey is increased. Great businessmen know that the moment a sale is made or that there is a successful deployment of a strategy, that the impulse of everyone involved is to relax. There is a time for celebration and a time to “get back to work”. It is important to celebrate successes and victories, but it is important to never relax. “Next play”. Learn from the past and focus on the future. Win or lose.

As a kid growing up in high school and college, one of the most emotionally traumatic times for me was watching a game film following a football game or practice. It was all there for everyone to see. Coaches and teammates. You could not hide. I was lucky to play on many championship teams and seldom had to sit through a “losing game film session”. I was also lucky to play for Hall of Fame Coaches that realized there was much to be gained from reviewing mistakes even though we had won the game. Film sessions after a win were far more difficult than after a loss. We should never let the result impact the evaluation.

Nuclear inspections on the USS Virginia were the same thing. We always passed with flying colors, but the “out briefs” were always tough. Win or lose, there was always much to be gained from reviewing ways we could do better. This is precisely what doesn’t happen after elections—win or lose, or after government programs like Covid mitigation strategies have run their course. There is a reason for this. Those involved in the implementation and execution of those programs have “No Skin in the Game”. They are kicking the can down the road and most of them won’t be around when the next “event of the age” —hurricane, pandemic, global warming, Y-2K, or war needs to be fought. Great leaders learn from their mistakes and adjust going forward—win or lose. For them, the score is always Zero-Zero. Be aware of narratives published by people who made bad decisions. Such “autobiographical postmortems” are often more fiction than fact.

One problem we have in our society today is that many people are “playing the game……without skin in the game”. In his book by that title Narsim Taleb, in a chapter called “Surgeons Should not look like Surgeons”, he takes on the problem head on:

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“In any type of activity or business divorced from the direct filter of skin in the game, the great majority of people know the jargon, play the part, are intimate with the cosmetic details, but are clueless about the subject.”

Academicians, politicians, and journalists in their use of jargon and when deploying “real science” are trying to create an illusion of expertise regarding situations where they themselves have very little experience. By denying the value of real-life experience and common sense when applied to a real-life problem, and by not having any skin in the game they are denying the value of the heuristic process.

An example is worth a paragraph to explain. Richard Dawkins the physicist and entertainer philosopher once opined about an outfielder trying to catch a fly ball that in his mind, is calculating a series 0f differential equations in “predicting the trajectory of the ball”. Preposterous I say and such an opinion could only be written by someone who has never fielded a fly ball!

Instead, experiments have shown that players rely on several heuristics. The gaze heuristic is the simplest one and works if the ball is already high up in the air: Fix your gaze on the ball, start running, and adjust your running speed so that the angle of gaze remains constant. All this is done intuitively without calculation. My dog does this when catching a frisbee—I guess. Trying to teach my dog about differential equations or calculous would be almost as difficult as trying to teach a Democrat about economics or double entry bookkeeping.

It is not about an algorithm or a series of differential equations

It is about a process that involves real life experience and discovery and probably being hit in the head with many fly balls until an intuitive process develops that is divorced from cognition. The deployment of “faux science and algorithms” by academicians, politicians and journalists is ubiquitous today. Global warming, abortion (killing baby boys and girls) transgenderism arguments are all grounded in political narratives that are grounded in jargon and not reality or even science. Results and advancements come from dealing directly with reality and rather than through the agency of “scientists” who claim to do science—if one has to make such a claim, they probably aren’t doing real science because true science speaks for itself—I paraphrase Galileo. Skills always matter more than images.

When the results come from dealing directly with reality rather than through the agency of commentators, politicians, consultants, and academicians; image matters less, even if it correlates to skills.

One final comment from SKIN IN THE GAME:

“But image matters quite a bit when there is hierarchy and standardized “job evaluation”. Consider the chief executive officers of corporations, politicians, journalists, and hospital administrators. They not just look the part, but they even look the same. And, worse, when you listen to them talk, they will sound the same, down to the same vocabulary and metaphors. But that’s their jobs: as I keep reminding the reader, counter to the common belief, executives are different from entrepreneurs and are supposed to look like actors.” They have no skin in the game. Without skin in the game, there is no evaluation of individual risk.

Those in the elitist hierarchy have no “skin in the game” WE THE PEOPLE do. We need to start electing people with skin in the game.

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