Robert Samuelson writes a typically good piece about the complacency that comes with success. "problem of certainty" came up a lot in my series on
risk. It was a particular part of the story on Gen.James Mattis (http://www.slate.com/id/2251031). Mattis quoted Sherman: "Every attempt to make war easy and safe will result in humiliation and
disaster." He could just as easily quote Nobel Laureate economist
Kenneth Arrow, who warned of the same problem in economics: "vast ills
have followed a belief in certainty."
But there's a way in which, contrary to what I think Samuelson is saying, risk played out differently on Deepwater than it did on Wall Street. Most of the Wall Street bankers engaging in risk-denying transactions believed they'd really beaten risk. On the oil rig, that wasn't the case. The guys doing the actual work knew they were cutting corners, just as the miners in West Virginia knew it was only a matter of time. In the case of the Deepwater rig it was the regulators who were lulled into thinking that certainty had been achieved and that therefore there was no big danger.
But there's a way in which, contrary to what I think Samuelson is saying, risk played out differently on Deepwater than it did on Wall Street. Most of the Wall Street bankers engaging in risk-denying transactions believed they'd really beaten risk. On the oil rig, that wasn't the case. The guys doing the actual work knew they were cutting corners, just as the miners in West Virginia knew it was only a matter of time. In the case of the Deepwater rig it was the regulators who were lulled into thinking that certainty had been achieved and that therefore there was no big danger.
Leave a comment