The Rationality of Risk, Part 2: Avoiding Risk, Keeping Busy, and Resorting with Praetorians

By Christopher Surdak, JD

In part two of the series on the Rationality of Risk, Chris Surdak provides an overview of some of the avoidance techniques that business people use to try to generate business returns without accepting any risk.


Welcome to the second installment of this discussion on the Rationality of Risk. In Part One, we reviewed the ever-so-common view that businesses should generate returns with the absence, or near-absence of risk. We discussed how this perspective is deeply rooted in human history and is fed by our use of technology in conquering the world around us. Throughout our history we have used our ever-improving technology and the Discover, Infiltrate & Exploit (DIE) approach to grow our society and our wealth. These gains have been made with relative ease and disproportionately low risk.

This is not to say that it has always been easy, and we certainly have stumbled along the way. But, large businesses and managers have had little difficulty in generating predictable returns in spite of the odds that we faced. Indeed, many organisations, and our society, expect growth without risk. Because of this expectation managers and executives are expected to generate riskless returns from their business as a matter of course.

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