Does Risk Management Make Sense?
We engage in risk management all the time, but it only makes sense if we do it right. “Risk management” is just a fancy term for the cost-benefit tradeoff associated with any security decision. It’s what we do when we react to fear, or try to make ourselves feel secure. It’s the fight-or-flight reflex that evolved in primitive fish and remains in all vertebrates. It’s instinctual, intuitive and fundamental to life, and one of the brain’s primary functions. Some have hypothesized that humans have a “risk thermostat” that tries to maintain some optimal risk level. It explains why we drive our motorcycles faster when we wear a helmet, or are more likely to take up smoking during wartime. It’s our natural risk management in action. The problem is our brains are intuitively suited to the sorts of risk management decisions endemic to living in small family groups in the East African highlands in 100,000 BC, and not to living in the New York City of 2008. We make systematic risk management mi
