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  • Andrew Gale

The biggest risk is not taking any risk

We clearly live with uncertainty and risk. How well do we understand these concepts and are we able to act on what knowledge we have about the risks and uncertainties we do face?

“Which of the following numbers represent the biggest risk of getting a disease: 1 in 100, 1 in 1000, 1 in 10”. Thirty percent of those surveyed, in Germany and America, were unable to answer this question (Galesic and Garcia-Retamero, 2010). According to Rieser (2013), we understand much better if risk is expressed using graphics and natural language. Even if risk is well communicated, a major academic topic in itself, we keep being surprised by predictable events.

Both risk and uncertainty have contested definitions, depending on who you ask. Scientists generally argue that anything that we are not certain about is an uncertainty. However, it could be argued that if uncertainty is quantifiable, i.e. the probability of an event happening can be assigned a percentage chance of occurring, then it’s a risk. Although there is a significant academic debate on this subject, maybe a simple, pragmatic approach is to talk about risk, uncertainty and ignorance. Although derided at the time, Donald Rumsfeld’s well publicised statement, in 2002, about uncertainty and risk, is actually quite helpful. Essentially, he said that there are known knowns, known unknowns and unknown unknowns.

In England in the seventeenth century unknown unknowns were categorised as ‘black swan events’. All swans were assumed to be white until 1697, that is, when black swans were discovered in Australia – a black swan event. Nassim Taleb’s book: The Black Swan – The impact of the highly improbable, addresses this subject exhaustively. He defines such events as having three characteristics: being a surprise; having a major impact; being an event, that in hindsight, could have been predicted.

High impact events, like the Fukushima Daiichi disaster and the Covid-19 pandemic are often described as black swans, but these high impact events were predictable. They both failed Taleb’s first characteristic, surprise. They shouldn’t have been surprises. Tsunami data local to Fukushima could have predicted the 15 metre wave that caused the power plant to melt down. Also, there are ancient 'Tsunami Stone'; some of which were erected up to 600 years ago, along the coastal zone. These stones were placed there to remind future generations not to build below them, because of past great waves. In September 2020 New Scientist magazine carried an article arguing that that the Covid-19 pandemic was predictable. Even when we have the intelligence we don’t seem to have the intelligence to act.

Interestingly, Japan is considered by academics, like Professor Geert Hofstede, who researches cross-cultural difference, to be the most uncertainty averse cultural in the world. Tsunami is in fact a Japanese word, emerging in the late nineteenth century, originating from the Japanese words, Tsu: harbour and nami: wave. In 1831, Katsushika Hokusai exhibited his famous woodblock print, The Great Wave of Kanagawa – clearly a harbour wave. One of his prints is in the British Museum’s collection.

Perhaps Professor Sir David Spiegelhalter CBE FRS helps us to put things in perspective: “If we feel we understand what is going on, and have some confidence in our assessment of the chances of different futures, then we can say we are dealing with risks, and can hope to produce a numerically balanced judgement. When we have the humility to acknowledge that we cannot put numbers on everything, then we are dealing with deeper uncertainty, and may instead aim for resilience to surprises” (2012).

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