uncommon sense

07Oct09

“No risk it, no biscuit” said my friend John as we sat down for a curry the other night. He’s a trader, and tends to think of almost everything in terms of risk.

Later on in the conversation we got on to the topic of ‘common sense’, and how it seems to be disappearing from life as we know it. “Common sense is just risk” came John with his usual refrain, but I have to totally agree with him this time. What we call common sense is all about risk, choosing to take risk at an emotional level rather than having somebody with a risk assessment form show up and fill it out whilst wearing a hard hat and hi-vis jacket then finally saying “I wouldn’t if I were you, something bad might just happen”. Nassim Nicholas Taleb writes a lot about emotional mechanisms and their relationship to risk in his excellent ‘Fooled by randomness’ (I’ve not yet got around to the more popular ‘Black Swan’). He points out that without emotions, without common sense, we become incapable of making decisions. That’s bad at an individual level, but it’s worse at a society level. When we substitute common sense, emotion and competence with process then there might be high hopes that the processes will be efficient and infallible, but in reality that’s almost never the case. Our overall productivity is now choking on broken process in almost every area of daily life. The most egregious examples seem to be associated with ‘terrorism’ where almost any amount of unproductive inconvenience is acceptable if it is supposed to save ‘just one life’ from a massively low probability event[1]. No common sense, no risk management. But it’s not just about terrorism and associated government fearmongering, it seems that the tabloid press has convinced the general public that no amount of risk is tolerable in any area where the state can possibly intervene with some misconceived legislation (backed up by enforcement that slews randomly between incompetent and heavy handed).

What can be done to fix this?

I fear that there are no easy answers. This one’s a combination of individual and social responsibility, individual and social risk appetites, education, unwinding complex legislation, honesty from politicians[2], cynicism of the popular press… the list goes on.

[1] If anybody knows what the government is doing about the threat to the public from lightning strikes, and where I should stand in line for my lightning security theatre then please let me know?

[2] OK, I realise here that I’m asking for the impossible. Something intimately intertwined with this whole problem is that it seems to be acceptable mandatory for politicians to be liars. Goodness in politics seems to be measured in units of liarbility.



2 Responses to “uncommon sense”

  1. Q. How can you tell if a politician is lying?
    A. Her lips move.

    I’m unsure if it’s possible to lay the blame at the feet of the press. Given the inate talent of our vacuous nation for sucking up anything that combines shiny, boobs and small words (as long as it doesn’t require an attention span over a few seconds) you can’t fault them for delivering exactly that. However, the politicians really are in a position to change these behaviours and fix their negative social consequences, they simply don’t. If one assumes that it’s their job, then they’re not doing it. You are, of course, assuming that politicians are actually there to help fix society’s issues. Common sense would tell you that’s not the case ;)

    I wonder how far they believe in themselves, and whether they think they’re actually doing a useful job. I also wonder how much of it is based around the simple need to be seen to be doing something – anything – in response to every negative situation in society. Recent examples include pushing for mandatory flu jabs, even when the cure has the potential to be worse than the disease.

    I’m a huge process fan, I’ll freely admit it. it’s impossible for humans to successfully function if they have to analyse every choice at every turn, and we naturally reduce this to processes to allow us to auto-pilot the complex environment we live in. Process by committee, however – that is the bane of modern society. I guess that’s the point where the common sense is lost – where consensus often overrides the original reason for the process (which was probably some form of risk mitigation to begin with).

  2. 2 Rob Rogel

    I think you are mixing and confusing the concepts or risk and uncertainty… the “known unknowns” and the “unknown unknowns”. And actually this is one of the causes of the current financial crisis.
    Financial people forgot about common sense while blindly relying on the efficient market hypothesis, which is enlightening but not true (they forgot about the uncertainty of the underlying economic model), while many investors relied blindly on their emotions with little or no understanding of their transactions (without understanding the underlying risk of the investments).
    A process can be mechanical, and can be optimized, but usually it is based on a model. So the most important way of improving a process could actually be the improvent of the underlying model. But let’s not forget that models are a simplification of reality, less complex, more understandable, but not definitely true.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: