Taleb: "Best Thing For Society Is Bankruptcy Of Goldman Sachs"

Authored by George Eaton via NewStatesman.com,

In Taleb’s universe, the fieriest circle of hell is reserved for bankers and neoconservatives.

Nassim Nicholas Taleb is an intellectual brawler, a philosophical pugilist. His new book, Skin in the Game, put me in mind of the final scene of The Godfather or Reservoir Dogs: everybody gets whacked. Bankers and bureaucrats, warmongers and wonks – all are targeted by Taleb.

For the Lebanese-American thinker, their shared sin is that (with some exceptions) they lack “skin in the game”. By this, Taleb means they are insulated from the consequences of their actions: they do not have “a share of the harm” or “pay a penalty if something goes wrong”. This “asymmetry in risk bearing”, he warns, leads to “imbalances”, “black swans” (the rare but high-impact events described in his 2007 mega-seller) and “potentially, to systemic ruin”.

When I meet Taleb, 57, at the Club Quarters hotel in central London I am mentally primed for conflict (journalists are another of his targets). But the self-described flâneur is courteous and polite, helpfully advising me to add an espresso to the hotel’s insufficiently strong coffee. I ask him how his deadlifts are (the stocky Taleb once boasted of lifting 400lbs). An unrelated injury, he laments, has “set him back” but he has shed fat, not muscle (“it could be that when you deadlift you’re always hungry”).

“I consider myself in the same business as journalists,” Taleb says when I raise the subject of my trade. “But if you don’t take risks it becomes propaganda or PR.”

Taleb, a man sometimes described as having praise only for himself, speaks admiringly of the New Statesman’s in-house philosopher John Gray.

“My respect for him is so great… He, visibly, has skin in the game, he was not afraid to be a Thatcherite when it was unpopular and later an anti-Thatcherite when it was also unpopular.”

In Taleb’s universe, the fieriest circle of hell is reserved for bankers and neoconservatives.

“The best thing that could happen to society is the bankruptcy of Goldman Sachs,” he tells me.

“Banking is rent-seeking of industrial proportions.”

Taleb, who became rich as a derivatives trader, is not a foe of capitalism but of “cronyism”.

“If you’re taking risks, God bless you. This is why I accept inequality. I’ve seen people go from trader to cab driver and back again.”

He similarly denounces armchair interventionists.

There’s a corrective mechanism in nature: a predator typically inflicts risk on others but also on itself.

Unless warmongers are more exposed to dying than others it’s the equivalent of reckless drivers being isolated from the risks of reckless driving.

Is he suggesting that, like George Orwell in Spain, neocons should have joined the Iraq frontline? “They should have kept their mouths shut,” he replies.

Taleb was raised in Lebanon by a Greek Orthodox family during the 1975-90 civil war (resulting in what he calls “post-traumatic growth”). He charges the West with excessive rather than inadequate support for the Syrian rebels. “Obama is the reason my people – the Orthodox Christians of Syria – are down by half. Assad’s father blew up my house. But Assad’s enemies make him look like Mother Teresa. You’re not dealing with the Swedish parliament versus Assad: you’re dealing with real scum.”

Mindful of the charge of hypocrisy, Taleb seeks to ensure that he has skin in the game. Though he lives mostly in New York, he retains a property in Lebanon and houses six Syrian refugees. He does not employ an assistant (“it moves you one step away from authenticity”), rejects copy editing of his books and refuses to accept honours and prizes (“they give you an award, then they own you”). When later that day I join Taleb at a private dinner hosted by Second Home, an east London start-up hub, he dismisses the convention of Chatham House Rules, insisting that all his remarks are on the record.

As an investor, Taleb never advises others to make a trade that he has not done himself. He inverts our traditional conception of “conflicts of interest” (“no conflict, no interest,” as one Silicon Valley slogan has it). When Taleb spoke sympathetically of Brexit in 2016, he simultaneously bought a large quantity of pound sterling. Once asked during a TV appearance to comment on Microsoft, he replied: “I own no Microsoft stock… Hence I can’t talk about it.”

“Those who seek money from a transaction, at least you know where they stand and what their norms are,” Taleb explains. “But those who tell you ‘I’m doing it for the benefit of humanity’, you’ve got no way of checking them.”

Yet are there times when a lack of skin in the game is defensible? Taleb concedes that an exception should be made for jurors. “You don’t do it for a living, you have a cleaner opinion than someone who gets involved.” Taleb, a philosophical sceptic, influenced by Burkean and libertarian thought, observes: “I’m against universalism right there. Skin in the game is not something universal.”

By now, we have been talking for 90 minutes and Taleb remarks with surprise that he is running late for another appointment.

Our conversation concludes on an optimistic note:

“We’ve survived 200,000 years as humans,” says Taleb.

“Don’t you think there’s a reason why we survived? We’re good at risk management. And what’s our risk management? Paranoia. Optimism is not a good thing.”

Is the paradox, I ask, that human pessimism offers grounds for optimism? “Exactly,” Taleb replies. “Provided psychologists don’t fuck with it.” 


Sofa King ne-tiger Tue, 03/13/2018 - 18:35 Permalink

I’m with you. Last year I read book on weightlifting for us older types and the foward to the book had me hooked instantly. I get to the end and find out this dude wrote it. Since then I’ve read all his books and got my deadlift up to 325. Not spectacular but not too bad for a life-long weakling. 

My my point is...he is one impressive motherfucker. 

In reply to by ne-tiger

DillyDilly davatankool Tue, 03/13/2018 - 16:37 Permalink

The 2ND BANK OF THE UNITED STATES was 'liquidated' in 1841 (after having been taken private as result of Andrew Jackson stoanding in the way of its 20 year charter getting renewed, & which, oh by the way, had existed since 1816, which, oh by the way, came about after the FIRST BANK OF THE UNITED STATES, charter had expired in 1811, and whereupon it NOT being renewed right away, the WAR OF 1812 started & Washington, DC was burned to the ground)...


Soon after Andrew Jackson's 'triumph' came to be, the "WAR OF NORTHER AGRESSION" (aka ~ The Civil War started), & within 50 years (& 3 Presidential Assassinations occurred ~ not counting the 2 attempts on AJ, and one on Theodore Roosevelt)... THE FED was established.


So yeah ~ LIQUIDATE Goldman Sachs (who is owned by the same banking families who participated in the aforementioned history)...


I'm not pretending to say I'm AGAINST it or anything. Jus sayin'

In reply to by davatankool

DillyDilly Chupacabra-322 Tue, 03/13/2018 - 16:56 Permalink



well, that's the thing isn't it...


Andrew Jackson may have been a 'hero' for killing the banks but at the end of the day it was just a pyrrhic victory. The jew bankers took the bank private, declared bankruptcy, and still made away with all the loot.


Same thing will happen again.

In reply to by Chupacabra-322

Ikiru resistedliving Tue, 03/13/2018 - 18:45 Permalink

Taleb is one of those guys who sounds like a cocky son of a bitch until you realize he is the smartest guy in the room.  He has little patience for those who lack the intelligence and education to grasp his ideas.  While his intelligence is far superior to mine, I understand EXACTLY how he feels when I debate liberals and other statists.  It’s akin to debating a 6 year old who is questioning your understanding of basic arithmetic.  Once an individual has fully integrated statist ideals, attempting to persuade them of the truth is a quixotic  undertaking.  

In reply to by resistedliving

Brazen Heist Tue, 03/13/2018 - 16:38 Permalink

1) Too Big To Fail

2) Too Big To Jail

3) Too Rigged To Fail

4) Too Kosher To Jail

When its all of the above, we have a big problem. A perfect storm of coincidence!

Bemused Observer Tue, 03/13/2018 - 16:39 Permalink

As long as you aren't trying to profit from something, it is fine not to have 'skin in the game'. In fact, if you are observing only, it is best that you DON'T have any stake in the outcome.

But if you are on the field, and playing, then yeah, the risks as well as the rewards are yours.

rosiescenario Bemused Observer Tue, 03/13/2018 - 18:29 Permalink

Those with no skin in the game collect from those that do....it is called taxes. Even more unethical is our current rule on gains and losses...my gains get taxed, but I am limited to the mount of losses I may take, if those losses exceed my gains.


In addition not only those with no skin in the game parasitize their hosts, but in their idle time being paid for by their hosts, they formulate rules and regulations which hinder their hosts performance.

In reply to by Bemused Observer

DEMIZEN Tue, 03/13/2018 - 16:40 Permalink

Taleb seems like singular for Taliban. He sounds like all other utopians making a point.  I think he is cool, but not one to follow.

slightlyskeptical Tue, 03/13/2018 - 16:45 Permalink

Eliminate fractional reserve banking and pay off debts held by banks by issuing a new currency.  Eliminate taxes and just print the money to help get the new currency into circulation. Back this new currency with gold and fix the price of gold upwards as more currency is issued, keeping the value of the dollar in gold equal to the face value of the currency. Trace it will blockchain to help eliminate corruption, theft, tax dodging, etc.