Some risks are more immediate than others.Photo: A SynYesterday I ran across a pair of posts that got me thinking about risk and resilience. (Confession: Almost everything these days makes me think about risk and resilience.)
First there’s this extremely smart piece from economist Jason Scorse. It makes an argument that I wish had gotten much more attention during the fight over the climate bill, to wit: “people are much more willing to support environmental policies that come with large risks and disruptions to their way of life when other policies are in place to shield them from excessive risk and instability.”
Here’s the longer version:
The reality is that a bold new energy and climate change policy would inevitably result in dislocations in certain industries and upset long-established ways of life in many regions; in addition, it would lead to higher prices for basic commodities such as gas, home heating oil, and food.
In societies where there are strong social safety nets — universal healthcare, universal preschool, strong support for new parents, significant investments in public transportation, and sustained support for higher education — the changes wrought by a paradigm shift in energy will tend not to result in hugely destabilizing effects across whole towns and communities. In fact, with good planning and investments in critical infrastructure, strong environmental policies can result in overall improvements in the quality of life for nearly everyone.
Throughout much of the developed world, citizens are willing to pay prices for gasoline that would lead to riots in American streets, because they know that the government revenue raised by high gas taxes is used for programs that directly benefit them. In other words, ten-dollar-a-gallon gas isn’t such a big deal when everyone has great healthcare, great public transportation, and free high-quality schooling.
This argument would benefit from some social science data comparing attitudes across countries — I think Scorse may expand the piece in just this way — but my strong instinct is that he’s right. Americans are so battered and anxious right now. Median wages are flat, unemployment is high, politics is paralyzed. Middle-class families are one health problem away from ruin, and when they fall, there’s no net. That kind of insecurity, as much as anything, explains the American reticence to launch bold new social programs.
Michael Levi points to a fantastic piece by Nassim Taleb and Mark Blyth wherein they approach a similar subject from a seemingly contrary angle, arguing that government efforts to suppress social and economic volatility can backfire. Without the experience of adjusting to small shocks as they come, we won’t be prepared when the big shocks arrive:
Complex systems that have artificially suppressed volatility tend to become extremely fragile, while at the same time exhibiting no visible risks. In fact, they tend to be too calm and exhibit minimal variability as silent risks accumulate beneath the surface. Although the stated intention of political leaders and economic policymakers is to stabilize the system by inhibiting fluctuations, the result tends to be the opposite. These artificially constrained systems become prone to “Black Swans” — that is, they become extremely vulnerable to large-scale events that lie far from the statistical norm and were largely unpredictable to a given set of observers.
Such environments eventually experience massive blowups, catching everyone off-guard and undoing years of stability or, in some cases, ending up far worse than they were in their initial volatile state. Indeed, the longer it takes for the blowup to occur, the worse the resulting harm in both economic and political systems.
Taleb and Blyth are mostly discussing U.S. foreign policy, whereby we prop up dictators in the name of “stability.” But it’s not hard to see how the point transfers.
So, how can we reconcile these seemingly opposed perspectives? I think if you dig a little deeper, they fit together quite nicely. If a society provides a basic measure of health and economic security for its citizens, its citizens will be more tolerant of a little volatility/risk/ambition in its social and economic policy.
This gets at why I think its extremely difficult to reconcile modern-day conservatism and serious efforts to address climate change (and future resource shortages, and other various other sources of long-term risk). The U.S. conservative politic program is devoted to increasing economic and social insecurity for average people and decreasing it for wealthy business owners. That is roughly the opposite of the approach you’d want to take if you want to increase society’s resilience to the dangers approaching.
