Nassim Taleb: Putin Is a Man Among Slaves

Editor’s note: The following is an excerpt from Skin in the Game, a 2018 book by philosopher Nassim Taleb

Loss Aversion

Take for now the following:

What matters isn’t what a person has or doesn’t have; it is what he or she are afraid of losing

So those who have more to lose are more fragile. Ironically, in my debates, I’ve seen numerous winners of the so-called Nobel in Economics (the Riksbank Prize in Honor of Alfred Nobel) concerned about losing an argument. I noticed years ago that four of them were actually concerned when me, a nonperson and trader, called them publicly a fraud. Why did they care? Well, the higher you go in that business, the more insecure you get as losing an argument to a lesser person exposes you more than other people.

Higher up in life only works under some conditions. You would think that the head of the CIA would be the most powerful person in America, but it turned out that he was more vulnerable than a truck driver… The fellow couldn’t even have an extramarital relationship. You can risk people’s lives but you remain a slave. The entire structure of the civil service is organized that way.

Waiting for Constantinople

The exact obverse of the public-hotshot as slave is provided by the autocrat.

As I am writing these lines, we are witnessing a nascent confrontation between several parties, which includes the current “heads” of state members of the North Atlantic Treaty Organization (modern states don’t quite have heads, just people who talk big) and the Russian Vladimir Putin.

Clearly, except for Putin, all the others need to calibrate every single statement to how it could be misinterpreted the least by the press. I have been exposed to such an insecurity first hand. On the other hand, Putin has the equivalent of f***you money, projecting a visible “I don’t care”, which in turn brings more followers and more support among the constituents.

In such a confrontation Putin looks and acts as a free citizen confronting slaves who need committees, approval, and of course feel like they have to fit their decisions to an immediate rating.

The effect of such an attitude as that of Putin is mesmerizing on his followers, particularly the Christians in Lebanon –especially those Orthodox Christians who lost the active protection of the Russian Czar in 1917 (against the Ottoman usurper of Constantinople) and now are hoping that Byzantium is coming back about hundred years later, though the reincarnation is a bit further north. It is much easier to do business with the owner of the business than some employee who is likely to lose his job next year; likewise it is easier to trust the word an autocrat than a fragile elected official.

Watching Putin against others made me realize that domesticated (and sterilized) animals don’t stand a chance against a wild predator. Not a single one. Fughedabout military capabilities: it is the trigger that counts.

Universal suffrage did not change the story by much: until recently, the pool of elected people in so-called democracies was limited to a club of upper class people who cared much, much less about the press. But with more social mobility, ironically, more people could access the pool of politicians–and lose their job. And progressively, as with corporations, you start gathering people with minimal courage –and selected because they don’t have courage, as with a regular corporation.

Perversely, the autocrat is both freer and –as in the special case of traditional monarchs in small principalities — in some cases has skin in the game in improving the place, more so than an elected official whose objective function is to show paper gains. This is not the case in modern times, as dictators knowing their time might be limited, indulge in pillaging the place and transferring assets to their Swiss bank account –as in the case of the Saudi Royal family.

Source: Skin in the Game