The World Is Increasingly Fragile

The following points seem obvious to me:

1. The world is much richer and safer than it used to be.
2. Death at a young/middle age is viewed as a greater tragedy than in the past.
3. People are much more risk-averse than before, more fearful of death.

I suppose these trends are probably linked. They explain the increase in health and safety regulation, our overreaction to terrorism, and also the phenomenon of “helicopter parents”. Two recent events show that the increase in fear can also have an impact on the economy:

1. The Boeing 737 Max fiasco

2. The coronavirus in China

If these two events had occurred in a world with 1970-level risk aversion, the economic impact would have been far smaller. The Boeing 737 would have been quickly fixed with a software patch and some extra pilot training. The coronavirus would not have disrupted the global economy nearly as much as it has (even if 50 years ago China had a large economy integrated into the global system.)

I’m not trying to argue that we are overreacting today, merely pointing out that as time goes by we becoming less accepting of risk. Based on my limited reading of history, it seems like things have been trending this way for centuries.

I see no reason why this process will end anytime soon. If we could take a time machine into the distant future, we’d probably view the people as pathetic cowards, just as the ancient Greeks would view us.

We are also relying increasingly on complex technological systems. I wonder if the interaction of increased risk aversion and technology will lead to future “risk recessions”, i.e. economic disruption caused by our unwillingness to accept even small risks from pathogens, or computer viruses. Imagine if all cars eventually become self-driving and terrorists discover a way to hack the system in such a way as to cause auto accidents. Would we shut down the entire transport system?

People are also more averse to disruption in their lives. Tyler Cowen’s “The Age of Complacency” discusses how these attitudes slow economic growth. You might think they should help the environment, but the reverse seems to be true. Consider Germany, where people are upset at the new Tesla factory:

The protests highlight a broader phenomenon in German society — the growth of nimbyism. Even industrial developments such as Tesla’s that point to a low-carbon future are coming under attack.

One of the biggest casualties is wind energy. There was a dramatic decline last year in Germany’s construction of onshore wind farms, partly because of objections raised by environmental campaigners worried about turbines’ effect on wildlife.

Of course, the environmentalists in Germany are also shutting down their entire nuclear power industry. So in the name of the “environment”, the greens are opposed to almost everything that would reduce global warming.

In the US, environmental laws are used (misused) to stop dense development near transit lines.

Other goals such as equal rights are also undermined by our increased fear of risk. Right now, Chinese people are being discriminated against all over the world. Ironically, the Chinese themselves are heavily involved in this discrimination, as when Chinese people in California refuse to participate in social events with other Chinese Americans. Literally everyone is afraid of the Chinese, even the Chinese. Discrimination is not about victims and villains, all groups are villains.

The rise in nationalism is another aspect of this increased risk aversion. People have an increased fear of the crime and cultural disruption that will be brought in by immigrants.

You might notice that this post links to my previous post on doubts about progress. As we get richer and safer, we also get more cowardly, more picky, more sensitive (safe spaces!), more discriminatory (great news for Trump), more impatient, etc. Thus the gains from progress are largely dissipated in a decline in human dignity.

PS. Don’t eat at P.F. Chang, you might catch coronavirus from one of the Mexicans who work there. After all, one out of every 40 million Americans have the virus, and if you are young and healthy you have maybe a 1/1000 chance of dying if you do catch the virus. That 1 in 40 billion risk is simply unacceptable!