Skin in the Game Is Now the Law, Yet Nothing Has Changed

There is a particular kind of essay that business audiences have been reading for over twenty years now. It observes that the Code of Hammurabi put builders to death for shoddy work; it observes that modern bankers are paid bonuses for taking risks that other people bear; it concludes that we have forgotten something the Babylonians knew, and that we would do well to remember it.I have written exactly that type of essay. I wrote it some years ago and never published it, which turns out to have been a piece of accidental good judgement, because in the intervening period the argument stopped being true. Australia has not forgotten Hammurabi. Australia has legislated him—twice, in the space of a decade, in two entirely separate domains. The interesting question is therefore no longer why we lack skin in the game. It is what happens once we have it, and why it changes fewer outcomes than one might expect.Reading the Whole TabletHammurabi (𒄩𒄠𒈬𒊏𒁉), sixth king of the First Dynasty of…