Aesop’s Dog, Irrational Birthdays and Other Structural Defects

Aesop’s dog, contagion values, and other notes on structural defects

The wolf and the house dog

One of Aesop’s Fables describes a “fine-fat” House Dog, who regales to the half-starving Wolf of his well-fed life. He implores the Wolf to abandon his miserable existence and to follow in the fine Dog’s way. Oh the splendors and comforts of domestic life, he tells.

The Wolf is captured initially by a “beautiful vision of his coming happiness”. But he soon sees “the mark of the collar to which [the Dog’s] chain is fastened”. Realizing its ultimate meaning, the Wolf returns to the woods.

In his book Skin in the Game, Nassim Taleb asks if you would prefer to be the dog or wolf? True, the dog revels in luxury. But it has grown fat and helpless, and lives with “the feeling of false stability”. The wolf, on the other hand, pays for freedom in constant danger of the wilderness.

Aesop’s The Wolf and the House Dog was transcribed more than two millennia ago in Ancient Greece. Yet its message lives on in part in the nature of the firm. For better and worse, envy, subsistence, material want, and cultural conditioning binds each of us to the economic machine.

As Taleb observes:

“People are no longer owned by a company but by something worse: the idea that they need to be employable. …The person is terrified when the big boss snubs him. Ninety-five percent of the employee’s mind will be on company politics…which is exactly what the company wants.”
Nassim Taleb. (2017). Skin in the Game.

Butcher surgeons and image chains

Organizing structures of sorts can produce serious defects in society. In the workplace, Taleb doesn’t trust people whose promotions depend on image, and the qualitative assessments of higher ranking peers. If he needs elective surgery, he would pick the butcher-looking surgeon over the Ivy-Leaguer with movie star looks.

Why? Taleb says that “the one who doesn’t look the part, conditional on having made a successful career,… had to have much to overcome in terms of perception”. What Taleb ignores, however, is that the hiring process is sometimes fallible as well. You might get an actual butcher for surgery!

Perhaps we ought to look beyond signals of appearance. There’s no escaping the fact, however, that perception matters. Heuristics grease the functions of society. Time and time again we see companies and institutions hire outsider executives with glowing resumes over insiders with deep history with their organization.

“Image matters quite a bit when there is hierarchy and standardized “job evaluation.” Consider the chief executive officers of corporations: they don’t just look the part, they even look the same. And, worse, when you listen to them talk, they sound the same… [When] business [is] divorced from the direct filter of skin in the game, the great majority of people know the jargon, play the part, and are intimate with the cosmetic details, but are clueless about the subject.”
Nassim Taleb. (2017). Skin in the Game.

Contagion values and crystalline rocks

Structural chains manifest themselves another way: the price system and the contagiousness of perceived value. To illustrate the point, let’s consider two societies — of which, the first, for whatever reason, develops an obsession for crystal rocks.

Now, these rocks serve no tangible purpose. It cannot help with agriculture, education, healthcare or transportation. What these rocks have in surplus is imaginary value. The inhabitants think they’re pretty. They want it in their homes now.

The second society, by contrast, cannot understand this obsession. To them, it borders on madness. But the story doesn’t end there. Some budding entrepreneurs in the neighboring town find an abundance of crystal reserves in their backyards.

So they begin excavation projects, trading their crystal loot to society-one denizens for tomatoes, potatoes and what not. Other neighbors, in fear of missing out, notice the signs of riches and commence their own ventures too.

Suddenly, both towns find themselves obsessed. The inhabitants of both societies exhaust their energies and waking hours thinking about crystal rocks, how pretty they look, and how much value it’ll someday command.

The media reports it daily. A global industry flourishes. And countless books are written about the founders, chief executives, and the coming crystal revolution. And if you’re in the minority now that believes these rocks pointless, well maybe you’re the crazy one.

**Luxury bullsh*t and higher education**

Indeed, like a frog in warming water, society does not always have a good sense of its upper limit. It is a sort of paradox of choice and progress. Modern trends in higher education is one example of this. To many families, elite education remains a must-have luxury good, no matter the price. “Harvard” today, Taleb writes, “is like a Vuitton bag and Cartier watch”.

But it is “a huge drag on the middle class”, as families continue to handover their life savings to learning institutions and legions of contractors. If early childhood centers and primary schools can deliver high quality education at a fraction of the teaching cost, surely the academic geniuses that teach finance can figure it out too. They can, of course. But they won’t. Who do you think enjoys the lionshare of value in a restricted, demand-driven system?

But the lifetime cost of education is unlikely to change until family, employer, and teaching attitudes improve. Society’s emotional desire for brand and status remains alive and well. It is another structural chain that many parents impose on their children. Here’s what Taleb has to say about bullsh*t degrees and papers:

“You can tell if a discipline is BS if the degree depends severely on the prestige of the school granting it. I remember when I applied to MBA programs being told that anything outside the top ten or twenty would be a waste of time. On the other hand, a degree in mathematics is much less dependent on the school… The same applies to research papers. In math and physics, a result posted on the repository site arXiv (with a minimum hurdle) is fine. In low-quality fields like academic finance (where papers are usually some form of complicated storytelling), the “prestige” of the journal is the sole criterion”.
Nassim Taleb. (2017). Skin in the Game.

Humble abodes and space-filling structures

There’s a similar problem in real estate, Taleb observes. Most families are probably happier in smaller, warmer, more humble homes and neighborhoods. Yet many individuals feel compelled to supersize their home as they climb the income ladder. Or maybe Taleb is wrong. Maybe the ultrarich do very much enjoy living in “silent mansions” with “a funeral feel to it”.

I’ve noticed a similar structure with birthdays and festive seasons. I often hear about the unwanted stress, obligations, and expense these celebrations bring to my colleagues, friends, and family members. They seem collectively unhappier for it, but cannot seem to shake their familial shackles. Humans are reciprocal creatures, yes. But might there be a better way?

It’s worth noting too that birthday celebrations among middle class Americans were not popular until around the late nineteenth century. What’s more, many families back then believed that such “celebrations were self-centered and materialistic… [that] turned children into brats”. How norms and attitudes can change with the passing of time and capitalism.

What I’m getting at with butcher surgeons, crystalline rocks, and unhappy birthdays are the hidden structures that organize our lives. They’re multidimensional and difficult to pin down, but they move us like simple pieces on a checkerboard.

We are neither the house dog nor the wild wolf. But we are constrained in part by history, deep algorithms, and hidden structures. What does this mean for everyday life? Well, “whatever you do, just don’t be a dog claiming to be a wolf”, Taleb writes.

“Very few people understand their own choices, and end up being manipulated by those who want to sell them something…. So long as society is getting richer, someone will try to sell you something until the point of degradation of your well-being, and a bit beyond that.”
Nassim Taleb. (2017). Skin in the Game.

Sources and further reading

Taleb, Nassim N. (2017). Skin in the Game.