 Skin in the Game is an economic and ethical principle whereby those who seek to gain from their activity should also lose when things go wrong. In other words, the idea aims to create symmetry, of risk, and return. King Hammurabi of Babylon already used the principle when he established one of history's first laws, to ensure high construction quality inside the empire. One set of laws was for the builders. Law 229 stated that if a builder builds a house for a client and does not construct it properly and the house which he builds collapses and causes the death of the owner, that the builder shall be put to death. As a result, builders who were not able to construct properly or tried to cheat left the trade one way or another. Soon, those who were planning to build a house had less to worry about. The law's harsh consequences and its simplicity made sure that the incentive of the builder who gains the profit and the man who risks the cost of construction, living inside the house, are aligned. Naseem Taleb, who wrote extensively about skin in the game, argued that having a measurable risk when making a major decision was necessary for fairness and commercial efficiency. He also linked the principle to learning. In particular, he argued that brains of smart people who work in positions where there are high returns but low risks, don't receive the necessary feedback to learn from their mistakes. Over time, this will produce inferior ideas and risk turning smart people into idiots. Intellectuals, yet idiots. Take for example, an intelligent CEO today who leads a public company and builds huge construction projects using other people's money. Unlike a Babylonian, our constructor sits comfortably in his chair instructing those who actually take the risk. To protect himself further, he hires third party engineers who sign off on the construction plans and have insurance policies to protect them against any imaginable misfortune. When important clients complain, they are welcomed by account executives. And if a house actually collapses, our constructor just reads about it in an annual report because the man who lost his family inside will only get to see the constructor's legal team. As a result and over time, the constructor becomes disconnected from reality, stops learning from his mistakes, and becomes bad at his job. The consequences are frustrated customers and poorly built homes. To keep learning and achieve excellence, it is therefore important to work in a position where risk taking is part of the daily routines. Not only because we get feedback from people who share a risk working with us, but also because only if we have a stake in the outcome do we give our best. One of the best ways to learn faster, therefore, is to have a stake in the outcome. To learn how to cook, cook for friends. To learn about an idea, publish a video about it. To learn about shares and companies, invest in the stock market with your own money. Almost 4,000 years after Hammurabi, the beautiful ruins of the ancient city of Dara are testimony to the quality of the builders of Babylon. But what do you think about the principle? Are there other possible downsides beside the horrendous consequences of Law 229? Please share your thoughts in the comments below. To improve the quality of your argument, put your skin in the game and add your name and where you are from. This and all other Sprouts videos are licensed under Creative Commons. That means teachers from all around the world can use them in classrooms, online courses or to start projects. And today, thousands already do. To learn how it works and download this video with out ads or background music, check out our website or read the description below. If you want to support our mission and help change education, visit our Patreon That's patreon.com slash Sprouts