"Skin in the game changes perspective – and trust"

Practicing what you preach is an essential component of building trust, writes Bernard Lim, 20, a Commonwealth Correspondent from Singapore, who argues in favour of challenging those who fall short of that standard.

Do you have ‘skin in the game’? Ayn Rand, Noam Chomsky, Jérôme Cahuzac, interestingly, do not have that.

‘Skin in the game’ refers to a person putting his  or her money where his or her mouth is. Practice what you preach. Live your lies, so they say, thus giving credence to the cause you preach.

Imagine this: your financial adviser tips you on the immense potential of an investment scheme – purchase of potentially oil-bearing Arctic zones – which must be exploited as soon as possible for the enormous super-profits that will be generated (because not even Warren Buffett has seen the potential…yet). With a flourish and a flushed face, he exclaims. However, when asked if he would personally invest in it, he replies curtly, “No thanks; my investments are tied up in government bonds. They’re stable.”

Would anyone invest in this scheme? If it’s that once-in-a-lifetime chance, why doesn’t he take it? If you happen to witness such a person, call him or her out on it. Call them NIMBY (Not-In-My-Back-Yard), whatever you will – people who aren’t willing to risk their lives for their words. Simply, their interests are not aligned with yours, even though they are promoting a cause which they wish you to believe in.

‘Skin in the game’ forces you to question the motives of salespersons you may face everyday, in business, family, and politics. In business, it directly ties the fate of the business manager with you; the manager and you either fail together or succeed. No one’s walking away with a golden parachute. In addition, it puts the salesman on the defensive and reveals his real motives for preaching his values. Is he ‘in the game’ only for his personal benefit….or for an altruistic purpose, or for your sake, as he claims? Do we know where his true interests lie?

It even works in finance; partnerships have been used to hold the owners responsible for any mismanagement. The partnership model holds that stockholders in a financial institution must also be employees of that institution; plus, they have unlimited liability in a bankruptcy. Real British-style bankruptcy, not American-style bankruptcy.- If you fail, you sleep on the streets. Even Adam Smith declared in “The Wealth of Nations” that managers (read: directors) could not be trusted to look after other people’s money; that “negligence and profusion” were the inevitable result of businesses becoming incorporated. Partnerships, with partners having a vested interest in the running of the institution, are still very much used in the Swiss financial system.

What about politics? If you happen to witness a socialist academic ranting about the evils and gloom of capitalism, while secretly amassing cash, investing in ‘devious’ financial instruments, and skirting tax laws, you will instantly know this as a case of his skin not belonging to where his game is.

Of course, it isn’t easy to live that life of moral rectitude.  Mahatma Gandhi once said, “Become the change you wish to see in this world.” If you want the world to change, why not start with your life? Even Ayn Rand depended on government medicare in her final years, despite her anti-government philosophy. Noam Chomsky, despite calling for massive income redistribution on a large scale, vested his wealth into a tax shelter (a trust) and named his daughters as trustees. Did I mention that he has a net worth of two million dollars? And remember the  case of the French Socialist minister, Jérôme Cahuzac, who evaded taxes?

So, if you happen to witness a person selling you snake oil by preaching its beauty-enhancing properties and health benefits, get him to try it on himself.

Chances are that he will run.

photo credit: Elijah via photopin cc

Opinions expressed in this article are those of the author and do not necessarily represent the views of the Commonwealth Youth Programme. Articles are published in a spirit of dialogue, respect and understanding. If you disagree, why not submit a response?

To learn more about becoming a Commonwealth Correspondent please visit: http://www.yourcommonwealth.org/submit-articles/commonwealthcorrespondents/

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