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To conclude our discussion of how skin in the game improves the world, we’re going to take a look at the reason why it’s a necessary ingredient in any good deed imaginable. Without skin in the game, behavior that appears virtuous and honorable on the surface is, at best, cheapened and ineffective, and at worst, inauthentic and malicious.
In this section, we’ll also cover some of Taleb’s ideas about another area in which skin in the game is necessary to be authentic: threats and intimidation.
In both cases, Taleb argues that the risks of skin in the game prove that you are what you claim to be.
First, we’re going to discover why skin in the game is the most honorable virtue there is, show how virtue without skin in the game is far less virtuous, and establish a few virtue-related rules to live by. Second, we'll show why skin in the game is a vital component of an effective threat.
Taleb defines courage as the tendency to put skin in the game—It’s the willingness to bear risk and make sacrifices.
In Taleb’s eyes, courage is the highest virtue because it’s required in order to do anything good. Anything done to benefit others requires some amount of risk that you must be prepared to bear.
Without skin in the game—without true courage—virtue is just empty words. Let’s take a closer look at how this happens.
All virtuous behavior requires some degree of risk and sacrifice—for example, the sacrifice of time and effort required to spend your weekends volunteering at soup kitchens.
For this reason, the only way for seemingly virtuous action to lack skin in the game is if it also benefits the one doing the virtuous action.
The return benefit takes your skin out of the Game by offering you a reward independent of the well-being of the person you’re trying to help. If a man only volunteers at soup kitchens as a means of picking up women, it obviously makes his work less virtuous.