Risk is one of those things we don’t think about, are adverse to in different measures. It is unavoidable. We would rather not have any, and yet are surrounded by it, and sometimes we are so focused on it that we can think of little else. It has always been one of the things I wonder about. Its one of the things financial advisors try to discern about your investment posture: risk avoidance or acceptance. It’s something people wonder about submariners. Its one of the things economists specialize in. It is part of life and is unavoidable – so sometimes it is easier to ignore. But I like to read about it from time to time.
Book titles are a means of marketing, an attempt to draw you in to the conversation. Which book would you rather read: (a) Mothers and Daughters in Dialogue, or (b) You’re Wearing That? – Understanding Mothers and Daughters in Conversation. And as you might guess, they are the same book. One title is rather hum-drum. The other is a bit intriguing… and by the way, all of Barbara Tannen’s books are excellent.
Risk, intriguing book titles…and then I run across: “An Economist Walks into a Brothel – and other Unexpected Places to Understand Risk” by Alison Schrager. The focus of the book is about how people manage risk in their lives and careers. And yes, to that end, she interviews legal, licensed brothel workers in Nevada (and their customers). She interviews a professional poker player about how to stay rational when the stakes are high, a paparazzo in Manhattan about how to spot different kinds of risk, horse breeders in Kentucky about how to diversify risk and minimize losses, and an Army general who led troops in Iraq about how to prepare for what we don’t see coming.
Whether we realize it or not, we all take risks large and small every day. Even the most cautious among us cannot opt out. The question is always which risks to take, not whether to take them at all. Sometimes we ask the question, fret about the question, but lots of times, we are so used to “the question” we carry on.
What about something new? Imagine an all powerful being appearing – genie, alien, divine entity – who knows? An offer is made to the world: a wondrous invention that would improve everyday life in almost every way. It would allow people to spend more time with friends and family, see new places and do jobs they otherwise could not do. But it would also come with a high cost. In exchange for bestowing this invention on society, each year, 1,000 young men and women would be randomly chosen and struck dead. What would be your vote? Would you take the deal? When asked of graduate students, the answer is always “no.” The professor then delivers the fable’s lesson: “What’s the difference between this and the automobile?”
In truth, automobiles kill many more than 1,000 young Americans each year; the total U.S. death toll hovers at about 40,000 annually. We accept this toll, almost unthinkingly, because vehicle crashes have always been part of our lives. We can’t fathom a world without them. It’s a classic example of human response to risk. We often underestimate large, chronic dangers, like car crashes or chemical pollution, and fixate on tiny but salient risks, like plane crashes or shark attacks.
But how we view things that are new and how we view the risk associated with them is very different. The government suspended the use of the J&J vaccine because of reported blood clots. There were 6 reported cases in 6.8 million administered doses. How I might view the data is certainly different that how those 6 people view it. The reports of this and other symptomatic responses to vaccines raise risk concerns among those who have yet to be vaccinated (as well as those that will not be vaccinated for other reasons). But what about coronavirus risk for folks already vaccinated?
New data last week shows that 5,800 fully vaccinated Americans had contracted Covid. That may sound like a big number, but it indicates that a vaccinated person’s chances of getting coronavirus are about one in 11,000 (about the same as getting a hole-in-one playing golf – and canoeing). The chances of a getting a version any worse than a common cold are even more remote. But they are not zero and will not be zero anytime in the foreseeable future.
The vaccination is not a one-time and done – it might well be an annual booster. It’s too early to tell. Even when the pandemic is declared over, and we are all in “maintenance” phase of yearly vaccinations, what are the risks? How might you feel about it when it is no longer new? The risk will never go away – of course neither will plane crashes or shark attacks. We don’t reorder our lives because of them. But this vaccination is new and so is our attitude/assessment of risk.
It’s complicated. Think about it, pray about it – and in the meantime, please avoid brothels, keep playing golf, and be careful canoeing.