Learning to Love Risk
Great piece. I’ll add that overregulation is actually making nuclear less safe. We cannot build new reactors, so we run old models longer than they were intended to run. We cannot experiment and improve without obtaining licensing and trudging through a thicket of regulatory morass.
What’s even more amazing, from nuclear power to GMOs, we hold the new to a higher safety standard than the old, allowing for more death and harm.
This is where my newsletter name comes from, without Risk, there can be no Progress.
“The desire for security and the feeling of insecurity are the same thing.”
Interestingly the rise of “safetyism” also coincides with the infantilization of culture. As Alan Moore has said "I think the impact of superheroes on popular culture is both tremendously embarrassing and not a little worrying,"
As a very young 20-something year old, I see a lot of people my age avoid risk at all cost.
We know that risk-aversion creates fragile, non-resilient humans who break at the slightest sign of stress. Makes sense.
I think what's an interesting idea is HOW to choose risk. It's easy to say "just take more risk you'll be fine!" - but how does one take "calculated risks?" Does such a concept even exist? Is it worth it to calculate risk? And what does the calculus look like?
Feels like we're running into the problems of Utilitarian calculus here...
Yes, Gen Z and America as a whole tends to seem pretty risk-averse, agreed, but I think a conversation that needs to be had is how to take effective and "smart" risks, if such a thing exists.
Excited to dive deep into your work, thank you!
I agree that risk is not a bad word and that risk avoidance is not a good way going forward for societies.
However, for individuals, the issue isn't risk per se.
What's going on in the West is something very different and only tangentially related to risk aversion. My very strong suspicion is that it may well be what Turchin describes as "popular immiseration" and "elite overproduction".
The former is very well documented: the failure of wages to match corporate profits, revenue, inflation, pretty much any other measure for decades with its counterpart of ever greater accumulation within ever smaller slices of society.
The latter is what I first read about with Benjamin Studebaker's Song Dynasty Surplus Civil Servants, but which Turchin likely more correctly generalizes as "far more aspirants to the elite than there are positions to be filled". Note this isn't defining elites as kings per se but rather to the top layer of society.
A specific example used is law degrees: "A law degree’s guarantee of the chance of a good living has also gone. Oversupply naturally pushes down the average earnings of graduates; but it also happens that trends in professions or sectors come to mirror those in overall society, with gradually a larger and larger share of the spoils going to fewer and fewer members.
A majority of law graduates will make only an average salary, and will begin their working lives burdened with a forbidding amount of student debt. ‘It’s strange to think of most law school graduates in America as members of the precariat,’ writes Turchin, ‘but that’s what they are.’ Meanwhile, in this atmosphere of uncertainty, where resentments are stoked by the mass of failed elite aspirants, even ‘the minority of newly credentialed youth who get into elite positions right away, like the 20 percent of law school graduates with $190K salaries, are not happy campers, because they feel the general insecurity.’"
There is plenty more that can be read at: https://drb.ie/articles/there-will-be-blood-2/
or in the actual book which I am in the process of getting.
Now consider the above dynamic: almost everyone is eminently replaceable because of precarity. People getting thrown off the bus to elite-dom for the wrong tweet, a decade ago or for not enthusiastically supporting the latest cause celebre. It isn't a big intuitive leap to see how precarity leads to risk aversion.
And if the above is all true - the answer to risk aversion is not "take more risk".
It is fixing the underlying socio-economic conditions leading to precarity and elite overproduction and immiseration - a Doctorow-ian en-shittification of entire societies.
Nice article! Little fun fact: ριψοκίνδυνο in Greek literally means "throwing risk", which is often used in business for a new venture. PS: you might want to check the spelling of riskophobia in the "If the precautionary principle that has underpinned the last half-century of riskophoboa in America has pushed safety by erasing the benefits column, then the appropriate counterbalance is to make a case for erasing the cost column" paragraph
- hope we don't naively maximize risk embracing but remember to build sufficient redundancies along the way even if that slows us down a bit (make haste slowly) < learn from Mother Nature
- hope the 'quick & dirty' in the name of more risk embracing does not lead to not cleaning up the dirty parts after the fact
This was a great read!
I have a theory that humans have no clue WTF their actions and policies will cause in the future. Climate, nutrition, supply chain, industrial chemicals, health, fashion, human allergies, etc.
Capitalism plays a big role in many decisions that are really stupid for future generations.
And I agree with the nuclear energy bit. Ireland is suffering from their overreliance on Russian gas. They did have the opportunity to build a nuclear power plant. But there's strong opposition (small island, nobody wants a nuclear plant in their backyard, and it's gonna take 20+ years).
I also read somewhere about forest management causing more fires than if there was no management at all.
One thing to note - federal regulatory agencies have been required to do cost-benefit analyses for all "significant" regulations. There's a CRS report that provides an overview of the history but basically there was an EO in 1993 mandating them though they were being done from the 80s. OIRA is the coordinating org at the federal level.
My hypothesis is that the "benefits" portion of any given issue / decision is in general harder to quantify than the "costs". Just think about how many variables and assumptions you have to make in any given ROI model.
America was built by risk takers - people who were willing to leave their countries and come to the new world. As an immigrant who came here for college over 20 years ago I also consider myself a risk taker. Now raising my kids here I realize that I have to work much harder to get them to embrace risk as life is much easier here. I have read about the free range movement for kids and I do believe it is a step in the right direction. I am curious on how we get more adults to get comfortable with taking risks when they may not have had to do so growing up or early in their adult years.
Thanks for putting into words and researching an item that I have thought many times over the past 50 years. I especially like the lawyer graph...
Thanks Packy, these are all great points.
Would love to have a discussion about the emergence of post modernism following WWII, and whether we can make the change to metamoderism
In this century
Not only this, but I think we're also disincentivized from risk-taking because.... well, because we are spoiled. We have everything we need, so it doesn't seem sensible to most folks to take on additional risk to ruining that easy life. I think that's a really big problem today.
As a kid in the 1960s in the LA area, I rode my bike to school, the park, everywhere; even to peek in the back of a topless bar. However those days are long gone. Car size/speed, traffic volume and driver aggression are all now so high that no kid in America is safe riding around as I did. To suggest
that wearing a bike helmet mitigates the hazard is laughable when we are talking about getting hit by a Ford F350.
I just came back from Scandinavia and Holland where kids riding bikes is a common phenomenon, so comon that 70-80% of kids walk or ride their bike to school. Kids' happinees, independence, self-confidence and mentlal health is off the charts in these places compared to the US, but it is because they have safe conditions thanks to decades of cycling infrastructure investment and much less tolerance of drivers' agression towrads cyclists and pedestrians. Car-dependent land use and transportation policies foisted upon the US by the the car and oil companies after WW2 and continuing to this day are the main reason America is so fucked up now. Waliking and biking around Utrecht and Copenhagen, I saw and interacted with thousands of people every day. In the US, the typical person gets in their car, isolated and unable to communicate with the other cars in the traffic jam they create, except by honking unintelligbly. I took a train from downtown Amsterdam to AMS for my flight home, stepped directly into the departures lobby. Landing in LAX, on the other hand, was stepping into an automiotive hellscape.
Thank you so much, Dan, for this thought-provoking analysis.
I would like to add that while striking a balance between embracing risk and ensuring safety is crucial, there’s another dimension to consider: fostering a culture of informed risk-taking. Encouraging individuals, organizations, and policymakers to make decisions based on comprehensive understanding and evaluation of risks can mitigate the adverse effects of blind risk aversion. This involves not just acknowledging potential dangers but also recognizing the tremendous opportunities that responsible risk-taking can offer.
Moreover, embracing risk isn't just about pushing boundaries; it's also about cultivating a mindset of resilience and adaptability. History shows us that some of the most significant advancements came from individuals and societies willing to venture into the unknown.
As Seneca once said "You have passed through life without an opponent—no one can ever know what you are capable of, not even you.”