Skin in the Game

Systems function better when participants have “skin in the game”—meaning they personally bear the downsides (risks, costs, or consequences) of their decisions or actions, not just the upsides (rewards or benefits). This creates symmetry, accountability, and better incentives.  **Breakdown of the Quote    

1. “Both the doctor and the patient have skin in the game, though not perfectly”:            

The patient obviously has skin in the game: their health, life, pain, and money are directly at stake in medical decisions.                    

The doctor also has some: their reputation, potential malpractice liability, emotional investment, and professional consequences if treatments fail badly.                  

It’s “not perfectly” symmetric because modern systems (insurance, regulations) can dilute risks—for example, doctors might over-treat defensively due to lawsuits, or patients might demand unnecessary tests because someone else pays.                  

“But administrators don’t—and they seem to be the cause of the troubling malfunctioning of the system”:                    

  Healthcare administrators (bureaucrats, insurance execs, hospital managers, regulators) make rules, approve/deny treatments, set metrics, and control costs—but they personally face little downside if things go wrong.                      

   They get salaries, bonuses, and power regardless of patient outcomes. Bad policies lead to inefficiency, higher costs, denied care, or poor quality, but the risks fall on doctors (burnout, lawsuits) and patients (suffering, expenses).                    

    Taleb argues this asymmetry causes systemic “malfunctioning”: bloated costs, unnecessary procedures, defensive medicine, and misaligned incentives in healthcare (especially in systems like the U.S. with heavy bureaucracy).                          

      “Administrators everywhere on the planet, in all businesses and pursuits, and at all times in history, have been the plague”:        

               Taleb generalizes this beyond healthcare: administrators (bureaucrats, middle managers, consultants, policymakers) in any organization or society lack skin in the game.        

      They impose rules, extract value (salaries, perks), and shift risks downward (to workers, citizens, or frontline people) while avoiding personal consequences.                    

    Historically and globally, this makes them a “plague”—a recurring source of inefficiency, stagnation, corruption, and failure. Examples include corporate executives with golden parachutes, politicians starting wars they don’t fight, or regulators causing crises without penalty.                      

  Contrast: Entrepreneurs, traders, or artisans succeed or fail personally, leading to better evolution of systems.In essence, Taleb is critiquing asymmetric risk as a root evil in modern institutions. When decision-makers are insulated from harm, they make worse decisions, game the system, and create fragility. The solution he advocates is forcing more symmetry: no voice or power without personal stake. This ties into his broader themes of antifragility, real-world risk-taking, and distrust of top-down interventionists (whom he often calls “IYIs”—Intellectuals Yet Idiots).                            ‍

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