An analogy might be the pilot of an airliner. The pilot’s decisions in the cockpit will affect the pilot just as surely as it will the passengers; the pilot has “skin in the game”. But if the pilot is on the ground flying the plane remotely from the airport bar, the pilot’s decisions will still affect the health and well being of the passengers but perhaps not his own.The contrast is stark. Those with invested with Buffet’s concept of “skin in the game” will generally realize better outcomes whether they be financial investors or citizens. That is the power of a participatory democracy. We all have a big investment in our communities and our country.Greater involvement will return optimized results in the long term
We were all born with “skin in the game”, both literally and figuratively. And with that skin in the game, we were given the free will to care for the literal “skin in the game” and the responsibility to exercise the figurative “skin in the game”. Despite the varying circumstances at birth, how we choose to care and exercise our “skin in the game” will be the primary determinant of the direction of our lives, and the impact that we have on those around us.
This book is about the figurative “skin in the game”. The motivation, incentive, inspiration and responsibility to make our lives, the lives of our loved ones, and our communities better. This book will focus five areas where we all have “skin in the game” and in which, together we can have an impact: Citizenship, National Service, Fair Taxes, The Public’s Education, and Crony Capitalism. Progress results from little things that are applied consistently. The old salesmen’s adage holds true, “work hard and you get lucky”. Recognizing that you do have “skin in the game” and the ability to influence the results of the game are prerequisites to action.
The expression “skin in the game”isa relatively new one, but the concept goes back to antiquity. The origin of current phrase is sometimes attributed to the horse racing industry where racehorse owners were said to have “skin in the game” when their horses were racing. “Skin in the game”is a popular business expression made popular by renowned investorWarren Buffett referring to a situation in which high-ranking insiders use their own money to buy stock in the company they are running.
The idea of “skin in the game” as Buffet intended is more than just a stake in the outcome. Individuals who have”skin in the game” not only have their own money invested, but they are part of the decision-making process over their and other’s investments.
Contrast that to the passive investor who has money on the line but is at the mercy of the managers’ business decisions, or to the manager who has no material investment but makes the decisions impacting other’s investment. In either situation, investment but no influence or influence but no investment, the outcome is likely to lag that of those who are fully invested with time and money.