By Nassim Taleb
Chapter 13: Skin in the Game, Anti-fragility at the Expense of Others
This chapter will look at ethics and modernity in the light of the fundamental asymmetry between upside and downside —across people (that is, when someone gets the upside, and a different person gets the downside)
The central problem of modernity, lies in the malignant transfer of fragility and antifragility from one party to the other, with one getting the benefits, the other one (unwittingly) getting the harm, supported by the growing wedge between the ethical and the legal. My main Black Swan problem is that modernity hides it rather well.
The agency problem, of course, is an asymmetry. But there is a fundamental change with the past. Consider older, societies —those societies that have survived. The main difference between us and them is the disappearance of a sense of heroism; a shift away from a certain respect —and power— to those who take downside for others. For heroism is the exact inverse of the agency problem: someone takes the downside (his own life, or risks harm to himself, or, more in milder forms, accepts to deprive himself of some benefits) for the sake of others. What we have currently is the opposite: power seems to go to those, like bankers, corporate executives (nonentrepreneurs) and politicians who steal a free option from society.
And heroism is not just about riots, wars, and protection. For an
example of an inverse agency problem: as a child I was most impressed with
the story of a nanny who died to save a child from being hit by a car. I find
nothing more honorable than accepting to die in place of someone else.
In other words, what is called sacrifice. And sacrifice comes from sacred,
the domain of the holy that is separated from that of the profane.
In traditional societies, a person is only as respectable and as worthy as
the downside he (or, more, a lot more than expected she) is willing to face for
the sake of others. The most courageous, or valorous, occupies the highest
rank in society: knights, generals, mafia lords, commanders. But the same
too applies to saints, those who abdicate, devote their lives to service others
—the weak, the deprived.
So Table x presents another Triad; those with no skin in the game but
benefit from others, those who neither benefit nor harm others, and, finally,
the grand category of those sacrificial ones who take the downside for others.
Read more here: http://www.fooledbyrandomness.com/ethics.pdf