From April 30, 2014

SILVER RULE: (i.e. the negative Golden Rule, i.e., broader skin in the game: Nobody should expose others to harm for which he is not himself directly or indirectly exposed).

It seems that people get only one part of the rule: the disincentive or deterrent. But that’s not what it is about: it is mainly a filter, which has been missed.

Bad drivers who tend to kill others by incompetence end up leaving the gene pool. Same with academics who trade and blow up: they become history. Same with people who give bad advice.

But there are many areas for which only TIME is a judge of competence –not the reasoning of men. The Silver Rule cancels the effect of rationalizations and intelligent-sounding BS: survival taks and bullshit walks.

There is also a main element that is missed: prediction. Predictors have an incentive to predict likely-events-of-low-consequence when they are not harmed by their errors. But in the real world, what matters is warning about events of high consequence. In the real world, the latter can only be revealed through skin-in-the-game as the supposedly “good predictors” go bankrupt.

Likewise a population that ignores signals goes extinct.

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The Silver Rule was a chapter in the back of ANTIFRAGILE, missed because people could not connect it to asymmetry of payoff in general. I am tempted to issue a political policy pamphlet or short book on a deepening and broadening version of skin-in-the-game that would stand outside the *Incerto*.

Would add some elements of “inequality” and the Soviet aberration of manufacturing artificial equality without silver rule.

via SILVER RULE: (i.e. the negative Golden Rule,… – Nassim Nicholas Taleb.