This article is an excerpt from the Shortform book guide to "Skin in the Game" by Nassim Nicholas Taleb. Shortform has the world's best summaries and analyses of books you should be reading.
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Do you think journalists are largely objective in their representation of news? What happens when a journalist disseminates a biased perspective?
According to Nassim Taleb, bias in journalism is the result of journalists’ lack of “skin in the game.” Their salaries don’t depend on how much useful and accurate information they convey to the public—rather, they depend on how well they fulfill their employers’ expectations.
In this article, we’ll describe the flaws caused by a lack of skin in the game that Taleb has identified in the news media.
Journalists Don’t Have Skin in the Game
In theory, journalistic institutions encourage their employees to convey an accurate representation of the facts. In reality, though, they often misrepresent the facts in pursuit of their own interests because there is no penalty for doing so.
| Internet News Takes Skin Out of the Game In Trust Me, I’m Lying, the Daily Stoic’s Ryan Holiday recounts his experience as a marketing director exploiting flaws in the Internet-based news media. Holiday explains that advertising-driven blogs—which comprise the majority of online news sources—earn income based solely on pageviews, and as a result, they put greater emphasis on sensational, attention-grabbing news and less on balanced perspective and reliable fact-checking. As Taleb points out, journalists’ skin is not in the public’s game. We’ll cover this in more detail a little later. |
A Lack of Skin in the Game Encourages Conformity
Here, Taleb establishes the principle that skin in the game rewards diversity while the absence of skin in the game rewards conformity.
Recall that, in the absence of skin in the game, rewards are given out based on the appearance of value instead of true value. For this reason, you won’t be rewarded for good ideas that contradict the general consensus. They won’t look like good ideas on the surface.
In Taleb’s view, the field of journalism operates in a very similar way to academia in the sense that one point of view comes to dominate entire organizations. Ideas are judged by editors or other higher-ups in the institution, who reject anything they don’t see value in. This incentivizes conformity, especially in a field as competitive as journalism. Given the choice between two journalists of equal skill, an editor will hire the one who shares her point of view. This contributes to the political polarization we see in our news media.
In contrast, the skin in the game of the business world rewards diverse ideas. If entrepreneurs are able to make money by challenging public opinion, they’ll make even more profit than if they had conformed—because it’s an untapped market.
| Dangers of a Disappearing Middle Ground Conformity of thought and political polarization are real problems with very real consequences, and journalism without skin in the game exacerbates these problems. This article provides some shocking statistics that show just how serious political polarization is—a study conducted before the 2020 US presidential election showed that, 13.8% of Republicans and 18.3% of Democrats agreed that “violence would be justified” if their party lost the election, and 16% of Republicans and 20% of Democrats have thought that “we’d be better off as a country” if “large numbers” of the opposing party “just died.” Recent incidents of political violence spring to mind, and statistics show that support for violence is on the rise, even compared to the relatively recent 2017. The American Civil War was preceded by similar incidents of violence—for example, John Brown’s attempted 1859 slave rebellion sparked an intense overreaction from the South, as extremists became convinced that government-supported Northern abolitionists intended to infiltrate their land and start a full-on rebellion. Violence disproportionately escalates polarization. This may be the most direct way that a lack of skin in the game is currently doing harm to society. |
Biased Manipulation of the Facts
Taleb maintains that in the absence of skin in the game, not only are journalists incentivized to conform to one perspective, they are encouraged to interpret and warp the news in the way that best serves the biased perspective of the organization.
Taleb recounts an instance in which the press drastically misrepresented his opinion on climate change during a public discussion with then-candidate for UK Prime Minister, David Cameron. The UK press condensed Taleb’s entire perspective on uncertainty and accountability into an out-of-context sound bite that implied the opposite of what he intended to convey.
The press did this with the intent of weakening Cameron’s public image during the lead-up to the election. It was only after the threat of legal action on Taleb’s part that the papers corrected what they had printed.
The majority of the time, journalistic institutions face no consequences for cases like this, as only rarely does someone resort to legal action. More often than not, bias in journalism flies under the radar.
| Context on the David Cameron Incident Here’s the statement Taleb made that was allegedly misinterpreted by the English press: “I’m a hyper-conservative ecologically. I don’t want to mess with Mother Nature. I don’t believe that carbon thing is necessarily anthropogenic [i.e. manmade].” As explained in Taleb’s initial response to the Guardian, by “hyper-conservative ecologically” he meant that we shouldn’t take any risks by interfering with the complex system that is Earth, an aggressive anti-pollution stance. People took it out of context and interpreted “hyper-conservative” to mean “companies should be free to pollute however much they want.” The original Guardian story has since been taken down. However, Taleb did express skepticism regarding carbon emissions, so accusations of climate skepticism were not entirely unfounded, as Taleb paints them to be.Taleb’s original response to the Guardian, which was published on his personal website, has since been taken down, but you can read it here, and the more polite updated version here. |
Two Types of News Media
To explain what a healthy news source looks like, Taleb makes the distinction between two types of news systems: two-way and one-way.
Two-way mediums are systems in which news is shared by individuals who both give and receive information. For most of human history, news has been spread this way—through word of mouth within communities. Village gossip is a two-way news medium.
Two-way mediums, by nature, incorporate an element of skin in the game. If someone spreads misinformation, everyone else will identify and condemn that misinformation. News sources have the potential to suffer more reputational harm in two-way news systems because audiences have the ability to broadcast their feedback.
One-way mediums are platforms in which a centralized distributor transmits news to a mass audience. Newspapers, radio, and television are all one-way news mediums. One-way news is a fairly recent development, beginning when newspapers became commonplace.
These mediums involve very few opportunities for feedback—the opinions of their audiences have little influence on how they operate. Thus, the rise of one-way news vastly reduced skin in the game. New technology allowed a few news distributors to be heard while the general public no longer had a voice to give feedback. News became centralized, and institutions were able to survive with far less journalistic integrity than a reputable village gossip.
However, Taleb asserts that two-way news is making a comeback in the form of social media. Social media puts news institutions’ skin back in the game, as unreliable sources come under fire from the general public.
The recent rise in suspicion toward the news media is a sign that our one-way news system is in the process of collapsing entirely, due to its chronic lack of skin in the game. Now that the general public has been given a channel to broadcast their criticism of untrustworthy sources, bias and distortion in the news is more likely to be punished. According to Taleb, we’re in the process of evolving toward a more reliable news system, and in the end, only the most trustworthy institutions will survive.
| An Alternative View of the Rise and Fall of News Media In Trust Me, I’m Lying, Holiday categorizes news systems into two types in a slightly different way. He argues that news media are drastically transformed based on whether they generate profits with a subscription model or a headline-driven model, and the shift in prominence from one to the other has delineated the different eras of news. Holiday starts the news media timeline at the “party press,” editorials run by political parties and supported by a small base of subscribers. In 1833, the New York Sun began the first paper designed to be bought issue by issue, starting a race to see who could report the latest sensational news, regardless of how accurate that news was—the “yellow press,” as they were called. In 1896, Adolph Ochs took over the New York Times, reviving the subscription model and more or less putting quality back into journalism. A reliable reputation was once again needed to turn a profit, as customers were willing to pay regularly for news they could trust. However, Holiday argues that advertising-driven news on the Internet marked a return to “yellow journalism”—the death of subscriptions meant the death of journalistic integrity. People don’t just read news from one source, they read an aggregate of news from every source—meaning that news sites can constantly chase new readers with salacious headlines and manufactured outrage instead of needing to form a relationship with a stable audience. Holiday asserts that hope in the modern news media can be found in the return of subscription news, as online paywalls are on the rise. The New York Times and similar institutions are earning more from subscriptions than ad sales. He comes to a similar conclusion as Taleb: sites that habitually mistreat their readers will eventually die out as people re-discover a better way to get their news—Holiday notes that, for one, the massive gossip site Gawker went bankrupt in 2016 after a $140 million invasion of privacy lawsuit. |
What Ethical Disagreement Looks Like
In contrast with the way one-sided news sources present ideas that oppose their own, Taleb establishes some guidelines for ethical debate.
The primary rule is to advocate for your opponent’s position as strongly as if it were your own. You shouldn’t start a counterargument until you’ve done this. Don’t obscure any facts about the issue, even if they make your position weaker. Doing so shows respect for the other side and turns debate into a collaborative search for ideas that are true and useful. Counterintuitively, it also makes your argument appear stronger since it shows that you have honestly considered the other side.
Taking this to an even further extent, Taleb advises to not only argue against what your opponent said, but against what they meant—the strongest possible argument that aligns with your opponent’s perspective. This is the opposite of a straw man argument, which seeks to present the opposing argument as weakly as possible. This is an ethical imperative—lying by misrepresentation is immoral.
Taleb equates misrepresentation of your opponent’s point of view to theft—you are stealing their credibility and profiting at the expense of both your opponent and your audience.
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Like what you just read? Read the rest of the world's best book summary and analysis of Nassim Nicholas Taleb's "Skin in the Game" at Shortform .
Here's what you'll find in our full Skin in the Game summary :
- Why having a vested interest is the single most important contributor to human progress
- How some institutions and industries were completely ruined by not being invested
- Why it's unethical for you to not have skin in the game
