34
Popular Culture Review
a major concern of political parties. These parties compete to impose these
views on foreign policy, the judicial system, law enforcement, and in legislation.
The techniques flow slowly from one field to the next. To illustrate the
long timelines involved, scenario analysis matured during Cold War
confrontations between major powers, notably the USA and USSR, but was not
widespread in insurance circles until the 1970s when major oil tanker disasters
forced a more comprehensive foresight. It entered finance until the 1980s wiien
financial derivatives proliferated. It did not reach most professions in general
until the 1990s when personal computers proliferated. Governments are
apparently only now learning to use sophisticated risk methods, most obviously
to set standards for environmental regulation, e.g. “pathway analysis” as
practiced in the U.S. Environmental Protection Agency.
Civilization as Risk Reduction
“Civilization advances by extending the number of important
operations wliich we can perform without thinking about
them.”
—^Alfred North Whitehead
If Whitehead is right, then the perfect civilization is the perfect risk
reduction algorithm—capable of warning us long in advance of foreseeable
problems, and assuring us that surprises were unforeseeable in principle.
Unfortunately, this vision of a risk-reducing symbiote or prosthetic for human
judgement remains elusive, fragmented, and unlikely to be realized.
Fear as Intuitive Risk Assessment?
For the time being, we must rely on our own fear and hesitation to keep
us out of the most profoundly unknown circumstances. In “The Gift of Fear,”
Gavin de Becker argues that “True fear is a gift.” From the book jacket: “It is a
survival signal that sounds only in the presence of danger. Yet unwarranted fear
has assumed a power over us that it holds over no other creature on Earth. It
need not be this way.”
Risk could be said to be the way we collectively measure and share this
“true fear”—a fusion of rational doubt, irrational fear, and a set of unquantified
biases from our own experience. The field of behavioral finance focuses on
human risk aversion, asymmetric regret, and other ways that human financial
behavior varies