“In general, skin in the game comes with conflict of interest.”
I recently worked my way through Nassim Taleb’s Skin in the Game, a book-length treatment of asymmetries of risk, and it spends a pretty good chunk of text on the question of what’s gone wrong with our class of professional advice-givers. The key observation is pretty simple: a disinterested third party usually pays no penalty for giving bad advice. Therefore, disinterested third parties often give bad advice, because humans are just not as careful when they’re gambling with someone else’s money.
As a culture, we generally prefer that our advice-givers be disinterested third parties. The theory is that experts, a bit removed from the situation and unhampered by any conflicts of interest, will be able to view the situation “objectively,” and so give better advice. But in reality, we’ve created an entire “chattering class” of putative experts who do little else but serve up advice, the vast majority of which is utter crap. (Did you get anything good from the last “Six Ways To…” article you read? Me neither.) What’s gone wrong?
Think about it in terms of financial advice. If your financial adviser owns a big chunk of the stock he’s urging you to buy, then he’s no longer a disinterested third party. Perhaps he needs you to buy that stock to shore up his belief that he made a good investment; perhaps he is helping keep the stock in demand by having all his clients buy it; perhaps he is even in a “pump and dump” scheme. Because he’s involved, his advice is no longer “objective.” And so we will point an accusing finger–he has a conflict of interest.
But consider the alternative. Suppose he’s not at all invested in the stock he’s recommending to you? Suppose that no matter how much he tells you that it’s a great buy, definitely undervalued right now, etc…he hasn’t bought any himself, and doesn’t intend to. How does that look to you?
So these are our choices: either you take advice from someone who put his money where his mouth is, or you take advice from someone who didn’t, and has nothing to lose if his advice turns out to be disastrously wrong.
Me, I want the guy who’s buying the stock he recommends to me. If I’m taking the risk, I want him to be taking it too. In other words, he has skin in the game. Yeah, there’s potential conflict of interest, but that’s the cost of involvement. Those who have a stake in your success always have a potential conflict of interest.
Certain professions (psychotherapy, for example) have actually enshrined in law their suspicion of conflict of interest, prohibiting any form of “dual relationship.” (A dual relationship is any relationship where the therapist is not just the therapist, and the client is not just the client. If the client is also a friend, business associate, hairdresser, relative, student, employee, lover, etc., then it’s a dual relationship.) Of course, real relationships often naturally develop multiple facets. Your sister-in-law can be your hairdresser, your wife’s best friend, a member of your church. This kind of thing is very common in the real world. And actually, “dual” relationship isn’t a great term for it; there’s often more than two. It’s more like “multifaceted relationship,” or better, “natural relationship.”
The prohibition of dual relationships greatly limits the therapist’s ability to have skin in the game. A client’s failure is unlikely to affect the therapist’s life in any meaningful way; the therapist isn’t allowed to be invested or involved in the client’s life. (The prohibition also reveals a weakness in some therapies and some practitioners: when the efficacy of treatment depends on the client not knowing the therapist for real, what does that say about it?)
In ministerial ethics, we take exactly the opposite position. A good minister is fully embedded in the community. The people we minister to are also our dry cleaners, our auto mechanics, our grocers, our neighbors. That’s not just a thing that sometimes happens; it’s expected. (And would you really want a pastor that keeps professional distance, lives in a different community, and is uninvolved in the lives of the people he serves? I wouldn’t.)
We prize personal involvement. We understand that comes with complications. Real, multifaceted relationships can be hard. Developing a difficulty in one facet of the relationship automatically causes ripples in the other areas. You challenge your parishioner to confess his affair to his wife, and three days later–because he’s also your barber–he’s cutting your hair. Can be a bit awkward. It takes a huge amount of character to manage the potential conflicts of interest and inevitable complications that come with a real relationship that crosses multiple domains.
Moreover, doing your work surrounded by people who have all these different vantage points on your life is going to expose places where your personal integrity is lacking. That’s not a bug; that’s a feature. It’s hard to counsel a man to treat his wife better when he heard you fighting with your own wife last week in the grocery store parking lot. So treat your wife better. Duh.
Now please hear me, that doesn’t mean you can’t give advice on something unless you’re perfect at it. It does mean, though, that you can’t hide hypocrisy behind professional distance, like the addiction counselor who helps clients get off drugs while using an endless series of random hookups to cope with the stress of the job. You can’t be a hypocrite. You have to own your failings and be making honest effort to improve. Because your community will know if you’re not…and they won’t listen to you.
One of the reasons massage therapy fits so well into my life is that in massage, we take a very similar approach to multifaceted relationships. We know that healing happens in the context of relationship, and so we don’t shy away from doing healing work with people that we have real relationships with. We move cautiously, we communicate, we consider carefully whether we can do this healing work with this client at this time — and the answer might be no, for various reasons, but that’s another post — but we don’t automatically rule it out. In most settings, if you have integrity, use wisdom, and communicate well, having a real relationship with your client is not a drawback; it’s a force multiplier.
This approach in massage therapy is nearly inevitable, starting in school. There’s no way to simulate doing bodywork; you gotta actually work with a body. Having students practicing on each other and giving each other feedback is the only practical way to do that. So we start off in multifaceted relationships–at minimum we’re each other’s therapists and each other’s clients. Many of us also become friends, and some of us become business partners as well. We grow accustomed to navigating the difficulties of real relationships, and so we don’t need to hide behind professional distance later. It’s a rare massage therapist that doesn’t treat friends, neighbors, family members, and so on, which is a far more natural practice than artificially excluding them.
That doesn’t stop us from having integrity, doing what we say we will, and delivering a high-quality service. Much the opposite.