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Skin in the Game by Nassim Nicholas Taleb.
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1-Page Summary1-Page Book Summary of Skin in the Game

Skin in the Game is the fifth book in Taleb’s Incerto series. The main idea of the Incerto is that the world is fundamentally unpredictable, and Skin in the Game is about the ethics of living in that uncertain world.

Someone who has “skin in the game” has a vested interest in the outcome of an event—and, more importantly, has something to lose. At a rodeo, the rider on the bucking bronco has skin in the game, while the audience member eating popcorn in the bleachers does not. Essentially, Taleb equates skin in the game to risk. The more you have to lose, the more skin you have in the game.

Taleb argues that the foundation of ethics is that everyone involved has equal skin in the game. In other words, your actions that benefit you should benefit others, and, more importantly, your actions that harm others should harm you.

According to Taleb, our first impressions of how the world works are often not just wrong, but dangerously contradictory to reality. Institutions that ignore the need for skin in the game are doomed to fail, and they’ll likely cause widespread harm along the way.

In this guide, we’ll:

  • Explain why skin in the game is so beneficial
  • Explore the ways in which skin in the game effectively runs the world
  • Critique institutions and industries ruined by the absence of skin in the game
  • Discover what skin in the game can tell us about the meaning of life

Origins of “Skin in the Game”

Taleb originally formalized his view of “skin in the game” in his 2012 book Antifragile. The main idea of Antifragile is that a certain amount of stress and chaos makes some “antifragile” things stronger, like how breaking down muscle during a workout triggers growth. “Skin in the Game” was the name of a chapter near the end of that book, in which Taleb applies the idea of antifragility to ethics.

People who don’t have skin in the game are essentially stealing antifragility, which is unethical. For example, if a popular finance pundit offered bad investment advice that drove up sales of his book, he would become more antifragile, profiting from uncertainty. It doesn’t matter if the advice works or not—he comes out ahead either way. However, the investors taking the bad advice would become more fragile, as they’re at greater risk of losing money.

Why Put Skin in the Game?

Taleb believes that an ideal system—whether it’s a country, a company, or even a religion—is made up of as many people with as much skin in the game as possible. Why?

First off, skin in the game allows us to learn from our mistakes. Taleb is adamant that knowledge gained through direct experience is far more reliable than knowledge sussed out through abstract reasoning. Individuals improve by learning from painful failure. An actress could read a million books on acting theory, but if she doesn’t go out and risk falling flat in auditions or on stage, she’ll never improve.

Likewise, systems improve by eliminating components that don’t work. If every failing business were given bailouts in order to continue running—if they carried no risk and didn’t have skin in the game—we would be surrounded by suboptimal businesses.

Secondly, skin in the game inspires better work. People are more engaged when their skin is in the game. They’re less likely to get bored, more likely to put in effort, they’ll make better decisions, and they generally feel more fulfilled. A teenager would be much more engaged during her driver’s license test than during the drive to a friend’s house. This is because she has something to lose if she fails her driving test—skin in the game. Ideally, all jobs would incorporate an element of skin in the game, creating something to lose by tying rewards to results.

Lastly, people behave more ethically with skin in the game. People are less likely to give in to temptation if they know they’ll be punished if they get caught. Telling your four-year-old that he’ll get a time-out if he hits his brother is putting his skin in the game.

An organization whose members lack skin in the game will be unable to learn from its mistakes, will care less about accomplishing its goals, and will foster corruption. This is because without skin in the game, individual agents are separated from the consequences of their actions.

Nassim Nicholas Taleb’s Personal Politics

Taken together, Taleb’s three reasons for prioritizing skin in the game may be the foundation of his personal politics.

Most of the time, Taleb is deliberately evasive about his political affiliation. He’s often presumed to be a libertarian, as he is strongly opposed to governmental intervention except when it is absolutely necessary.

However, Taleb has stated online and in interviews that libertarian isn’t the most accurate label to describe him, as he doesn’t see personal liberty as the highest virtue. He isn’t fundamentally opposed to government.

Instead, Taleb describes himself as primarily “not a libertarian, but a localist.” The foundation of Taleb’s political belief is skin in the game. The bigger an organization gets, the less skin in the game each individual has, as they’re distanced from the consequences of their actions. As a result, Taleb is a strong advocate for decentralized, local government.

In Taleb’s eyes, centralized government in which a few decision-makers dictate policy for people thousands of miles away prevents those in power from learning from their mistakes, causes them to care less about their jobs, and enables political corruption to go undetected.

As political units get smaller, Taleb becomes more supportive of governmental power, as the direct effects of their decisions are more easily observed. In Antifragile, he identifies Switzerland as the best government in the world, as it’s...

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Skin in the Game Summary Shortform Introduction

Skin in the Game is the 2018 addition to Nassim Nicholas Taleb’s bestselling Incerto, a series of philosophical nonfiction works dedicated to exploring how uncertainty defines our world.

The book is a treatise on the necessity of skin in the game—the need for everyone to be held accountable for the consequences of their actions. In this guide, you’ll become familiar with Taleb’s unique way of making sense of the world and in the process discover game-changing insights in wide-ranging areas of life, such as business, science, history, and religion.

About the Author

Nassim Nicholas Taleb is a Lebanon-born author and statistician. A provocateur in the academic world, Taleb is simultaneously lauded for his revolutionary insights and criticized for his bombastic, combative style.

Taleb draws heavily from his experience as a former options trader, to which he attributes his deep familiarity with risk and uncertainty. Taleb earned a PhD in management science from Paris Dauphine University and has researched and taught risk management and probability at institutions such as University of Massachusetts Amherst, Oxford University, and NYU’s Tandon School of Engineering.

He is...

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Skin in the Game Summary Chapter 1: The Basics of Skin in the Game

In this book, Nassim Nicholas Taleb deconstructs what we know about life and society with a new ideological framework that’s both unconventional in its insights and fundamentally human. By reinterpreting life in terms of risk and reward, Taleb demonstrates how “skin in the game” is the foundation of an honorable, fulfilling life and why shirking your fair share of risk is the root of all evil.

Someone who has “skin in the game” has a vested interest in the outcome of an event—and, more importantly, has something to lose. At a rodeo, the rider on the bucking bronco has skin in the game, while the audience member eating popcorn in the bleachers does not.

Essentially, Taleb equates skin in the game to risk. The more you have to lose, the more skin you have in the game.

According to Taleb, our first impressions of how the world works are often not just wrong, but dangerously contradictory to reality. Understanding skin in the game is vitally necessary to accurately understand law, morality, politics, science, religion, and many other driving forces of our world.

Origins of “Skin in the Game”

Taleb originally formalized his view of “skin in the game” in [his 2012...

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Skin in the Game Summary Part 1 | Chapter 2: Skin in the Game of Employment

Now that we’ve covered the basics of skin in the game and risk-based ethics, we’re going to take a closer look at the specific ways in which skin in the game helps our civilization operate as effectively as it does.

We’ll start by discussing Taleb’s view on employment—the cornerstone of our modern capitalist society. Taleb argues that employment is a mutually beneficial agreement in which employees give up their freedom to a company that, in exchange, bears some of their personal risk. In other words, employees put their skin in the company’s game.

This highlights one of Taleb’s key ideas that will form the backbone of this section: Freedom comes from bearing one’s own risks.

First, we’ll take a closer look at the risk-freedom trade-off made by employees, detailing the benefits employees receive from employers and the ways in which their freedom is limited. Next, we’ll discuss the exceptions to this rule: employees who manage to keep their freedom by embracing greater risk. Then, we’ll discuss where the employee-employer relationship falls short and identify its inherent inefficiencies. Finally, we’ll show how you can apply this understanding of freedom and risk in...

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Shortform Exercise: Evaluate Your Current Risk-Freedom Balance

Taleb asserts that each of us trades away a certain amount of freedom for a reduction in personal risk. Reflect on the levels of freedom and risk in your life and determine if something needs to change.


On a scale from one to ten, how much freedom do you have at work?

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Skin in the Game Summary Chapter 3: Skin in the Game of Economics and Wealth

Now that we’ve discussed how employees’ skin in the game benefits employers, employees, and consumers, we’ll zoom out and take a look at the role skin in the game plays in building a healthy, wealthy economy.

Taleb argues that wealth earned through skin in the game contributes to society in a healthy way, and that the way to create an ethical and productive economic system is to force top earners to risk their wealth in order to keep it.

In this section, we’ll first redefine economic inequality using skin in the game, distinguishing between two types of wealth and two types of inequality. Then, we’ll examine Taleb’s argument that the free market does the most to reduce economic inequality. Finally, we’ll explain why most opponents of the free market are upper class intellectuals instead of the lower class that would be impacted the most.

Good Wealth and Bad Wealth

Taleb uses the concept of skin in the game to distinguish between two categories of wealthy people: those who built and maintain their wealth through skin in the game, and those who built and maintain their wealth with minimal-to-no risk. Taleb argues that we want more of this first type of wealth and less...

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Skin in the Game Summary Chapter 4: Skin in the Game of the Passionate Few

We’re going to start getting more abstract in our discussion of how skin in the game improves the world with the far-reaching principle of the passionate few (or, as Taleb calls it, the “stubborn minority”).

Taleb argues that the state of the world is largely the result of small groups passionately fighting for what they want rather than a majority’s consensus.

We’re going to further define this idea, then show how the concept applies to Politics, Religion, Language, and Morality. We’ll conclude by explaining how you yourself can be part of a passionate few.

Who Are the Passionate Few?

Taleb asserts that civilization is disproportionately impacted by the preferences of strong-willed minorities. These passionate few forcibly put as much skin in the game as possible, making more sacrifices than anyone else is willing to make in order to get what they want.

The passionate few have the capacity to drastically shape society because unless the majority is strongly opposed to the preferences of the minority, the indifferent whole will let the minority have their way.

A simple example: A teenager is obsessed with sci-fi blockbusters. None of the other members of her...

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Shortform Exercise: Become a Passionate Few

The idea of the passionate few reveals that most of us vastly overestimate what it takes to change the way things are done. Consider how to use this knowledge to improve your life.


Think of a current status quo that you’d like to change. This could be an annoying procedure or unnecessary rule at work, or maybe an ingrained habit in your household.

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Skin in the Game Summary Chapter 5: Skin in the Game of Doing “Good Deeds”

To conclude our discussion of how skin in the game improves the world, we’re going to take a look at the reason why it’s a necessary ingredient in any good deed imaginable. Without skin in the game, behavior that appears virtuous and honorable on the surface is, at best, cheapened and ineffective, and at worst, inauthentic and malicious.

In this section, we’ll also cover some of Taleb’s ideas about another area in which skin in the game is necessary to be authentic: threats and intimidation.

In both cases, Taleb argues that the risks of skin in the game prove that you are what you claim to be.

First, we’re going to discover why skin in the game is the most honorable virtue there is, show how virtue without skin in the game is far less virtuous, and establish a few virtue-related rules to live by. Second, we'll show why skin in the game is a vital component of an effective threat.

Virtue Requires Skin in the Game

The Courage to Act Is Skin in the Game

Taleb defines courage as the tendency to put skin in the game—It’s the willingness to bear risk and make sacrifices.

In Taleb’s eyes, courage is the highest virtue because it’s required in order to do...

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Skin in the Game Summary Part 2 | Chapter 6: A Lack of Skin in the Game Causes Systemic Decay

We’ve explored the different ways in which skin in the game helps create a better world: It gets people to form productive organizations, provides economic rewards for those who create value, allows passionate people to change the world, and acts as the definition of virtuous, socially constructive behavior.

Now, let’s explore the other side: We’re going to discuss defective institutions and areas of life in which a lack of skin in the game creates fatal flaws. Before we dive into specifics, however, we have to explain the process by which this occurs. Taleb argues that skin in the game is a necessary component of human progress, and that those who deny the need for skin in the game create systems that are doomed to fail.

First, we’ll define the “Lindy effect,” a principle that explains how systems with skin in the game self-correct and improve as time goes on. Then, we'll take a closer look at the ideology that directly opposes skin in the game, which Taleb refers to as “Intellectualism.” Finally, we’ll show why, in the absence of the Lindy effect, false appearances slowly tear apart systems without skin in the game.

Skin in the Game and the Lindy Effect

Skin in the...

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Skin in the Game Summary Chapter 7: Skin-in-the-Game Problems in Science and Academia

Now that we’ve explained the Lindy effect and the inadequacy of human judges, we’re going to begin investigating the various areas in which a lack of skin in the game causes systemic damage to society. To begin, we'll take a look at Taleb’s criticism of science and academia.

The ideology of Intellectualism is particularly widespread in universities and other research institutions that are isolated from the real world in which their ideas are implemented. Academia nurtures Skinless Intellectuals. Taleb argues that areas of science and academia that lack skin in the game yield faulty, harmful ideas and theories that would cause major damage if implemented at a large scale.

First, we’re going to describe what good science with skin in the game should look like. Then, we’ll show how and why modern science strays from this ideal, highlighting specific flaws in modern academic practice caused by a lack of skin in the game. Finally, we’ll look at Taleb’s proposed solution to these problems and explain how he would reshape modern research.

What Good Science Looks Like

The Lindy effect is at the core of good science. This is because **science is about disproving ideas until...

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Skin in the Game Summary Chapter 8: Skin-in-the-Game Problems in Government

The next area we’ll discuss in which the absence of skin in the game causes problems is centralized government. Throughout the book, Taleb criticizes centralized power structures in which a few people make decisions that affect everyone. In his view, large systems, like governments or economies, are far too complex for individuals to effectively manage from the top down.

Instead, Taleb advocates for the decentralization of power—smaller territories are more likely to govern themselves effectively. For example, Taleb credits the success of the United States of America to its federalist nature—the government of each state has more skin in the game than the federal government has in any state.

First, we’re going to examine the benefits of decentralized government: greater accountability and more democratic representation. Then, we’ll take a look at why people believe in the power of centralized government and the one fact they overlook in doing so: Intellect and morality don’t scale.

The Virtues of Decentralized Government

By nature, the government doesn’t have much skin in the game—it’s a small segment of the population tasked with managing the affairs of the entire...

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Skin in the Game Summary Chapter 9: Skin-in-the-Game Problems in Journalism

We’ll continue our exploration of areas in which the absence of skin in the game causes problems with a discussion of the journalism industry.

Taleb argues that because journalists lack skin in the game, news institutions become dominated by a single point of view, causing political polarization and biased misrepresentation of the facts.

First, we’ll describe the flaws caused by a lack of skin in the game that Taleb has identified in the news media. Next, we’ll explain what a healthy news medium looks like by distinguishing between two ways that news spreads. Lastly, we’ll outline the ethical way news outlets—and all of us—should argue against opposing perspectives.

Journalists Don’t Have Skin in the Game

Since the effect the news has on society is so difficult to observe, journalists have been able to avoid putting skin in the game. Their salaries don’t depend on how much useful and accurate information they convey to the public—rather, they depend on how well they fulfill their employers’ expectations.

In theory, journalistic institutions encourage their employees to convey an accurate representation of the facts. In reality, though, they often misrepresent the...

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Shortform Exercise: Practice Ethical Disagreement

Ethical disagreement, the way Taleb describes it, benefits everyone. It turns ego-driven competition into a productive brainstorming session. Ethical disagreement is a valuable skill that’s worth practicing.


Think of a fight or debate you’ve had recently. Were you trying to discover the truth, or find a valid solution to a problem? Or were you just trying to prove that you were right?

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Skin in the Game Summary Chapter 10: Skin-in-the-Game Problems of War and Peace

We’re going to conclude our exploration of those areas of life that suffer from a lack of skin in the game by discussing the role skin in the game plays in war and peace.

Taleb argues that populations with skin in the game tend to fight shorter, relatively non-destructive wars, and that all the bloodiest conflicts in history were driven by third parties without skin in the game.

In this section, we’ll start by showing why Taleb sees peace as the dominant status of civilization and how, when left to their own devices, people tend to resolve conflict and collaborate. Then, we’ll explain how institutions without skin in the game perpetuate war, even when they intend to create peace. Finally, we’ll explore why so many people falsely assume that the natural state of civilization is ceaseless, destructive conflict, which leads them to believe that institutions without skin in the game need to intervene.

Humans Progress Toward Peace

Typically, over time, people find ways to coexist peacefully. Conflict is an inescapable consequence of human interaction, but Taleb frames war as a stepping-stone toward longer eras of peace and collaboration.

War puts mass skin in the...

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Skin in the Game Summary Part 3 | Chapter 11: Skin in the Game of Philosophy and Religion

We’ve extensively covered the areas in which skin in the game is responsible for ethical, productive behavior in our world, as well as the ways in which a lack of skin in the game causes systemic harm.

For the final section of our guide, we’re going to examine Taleb’s bold, sweeping claims that skin in the game reveals the meaning of life and religion. He argues that skin in the game reveals that what we truly value above all else is the survival of the human race. With this in mind, Taleb then argues that religious belief is rational in the sense that it contributes to our survival.

First, we’ll explain how skin in the game is the only thing that’s truly “real.” Then, we’ll show how skin in the game reveals that the end goal of all humanity is survival. Finally, we’ll build support for Taleb’s argument that religion is fundamentally rational by showing how it contributes to our survival and arguing that everyone is religious to a certain extent.

Defining “Real”

Risk taking—skin in the game—is the essence of life itself. As Taleb puts it, “real life is risk taking.” He means this literally—by definition, a life without risk is not a real life. Let’s break down...

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Table of Contents

  • 1-Page Summary
  • Shortform Introduction
  • Chapter 1: The Basics of Skin in the Game
  • Part 1 | Chapter 2: Skin in the Game of Employment
  • Exercise: Evaluate Your Current Risk-Freedom Balance
  • Chapter 3: Skin in the Game of Economics and Wealth
  • Chapter 4: Skin in the Game of the Passionate Few
  • Exercise: Become a Passionate Few
  • Chapter 5: Skin in the Game of Doing “Good Deeds”
  • Part 2 | Chapter 6: A Lack of Skin in the Game Causes Systemic Decay
  • Chapter 7: Skin-in-the-Game Problems in Science and Academia
  • Chapter 8: Skin-in-the-Game Problems in Government
  • Chapter 9: Skin-in-the-Game Problems in Journalism
  • Exercise: Practice Ethical Disagreement
  • Chapter 10: Skin-in-the-Game Problems of War and Peace
  • Part 3 | Chapter 11: Skin in the Game of Philosophy and Religion