I recently posted a review of it over at City Journal. Here’s an excerpt:
Taleb’s answer to the problem of accountability is to create an environment where people, especially those at the top, have more skin in the game. He believes that this approach will, for example, lessen income inequality. “The way to make society more equal is by forcing (through skin in the game) the rich to be subjected to the risk of exiting from the 1 percent,” he writes. How do we do that? One way is to end bailouts, which by necessity means shrinking the state. “It is government, not markets, that makes these things possible by the mechanisms of bailouts,” says Taleb. “It is not just bailouts: government interference in general tends to remove skin in the game.” He continues, “in general, the more people worship the sacrosanct state (or, equivalently, large corporations), the more they hate skin in the game.” Decentralization can shrink the influence of big government. “What can we do since a centralized system will necessarily need people who are not directly exposed to the cost of errors? Well, we have no choice but to decentralize or, more politely, to localize; to have fewer of these immune decision makers.” Taleb admires political systems, like Switzerland’s, that “start with the municipality, and work their way up, rather than the reverse, which has failed with larger states.”
He champions entrepreneurs. “Entrepreneurs are heroes in our society. They fail for the rest of us”—in contrast with the non-owner, interchangeable, big-company CEO. “Counter to the common belief,” Taleb argues, “executives are different from entrepreneurs.” He prefers simplicity to complexity, noting that “people who have always operated without skin in the game . . . seek the complicated and centralized, and avoid the simple like the plague. Practitioners, on the other hand, have opposite instincts, looking for the simplest heuristics.”
Click through to read the whole thing.