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Reflections on Risk

This morning, I ran the numbers on traffic fatalities in the US and Norway. 

The background was a Charles Krauthammer’s article in the Washington Post, “A disaster with many fathers”, where he insinuates that there would be fewer oil spills if the oil companies were allowed easier access to other potential oil fields, in shallower water. To me, that’s like saying that there would be fewer traffic accidents if roads were better and cars were cheaper, so drivers could afford to upgrade to newer, safer models.

This hypothesis is testable. America, for example, has fantastically good roads, compared to Norway. Their fleet of cars is also much younger, thanks to the fact that cars cost next to nothing there.

Does this lead to fewer accidents? Apparently not. The US has 2,4-2,6 times more traffic related fatalities per inhabitant per year.

My first idea when I saw this number, must that it must be due to Americans driving more than Norwegians. Wouldn’t better roads lead to more driving and then to more accidents? If so, that would be bad for Charles Krauthammer, since it would imply that better access to more oil fields would simply result in more drilling and more oil spills.

When I checked the numbers, it turned out that Americans do indeed drive more than Norwegians, but only enough to explain 15% of the effect.

My wife suggested that the remaining 85% difference might be due to higher fines and stricter law enforcement in Norway. It’s true that the fines for speeding are higher here, but the enforcement is actually laxer: In Norway I see policemen doing speed checks once or twice a year, and in America I see them several times a day when I’m doing long road trips.

My conclusion is that the remaining 85% of the difference must be due to the fact that Americn drivers (just like Norwegians) compensate for better roads and cars by adapting their driving style to the perceived level of risk they’re comfortable with, and that Americans are collectively less risk-averse than Norwegians.

There’s no reason that Americans in general would behave more responsibly in boardrooms than behind steering-wheels. What we really, really need to do, is to create systems of governance in the widest sense, that keep the risktakers out of positions where we can’t afford to have them. Like in certain parts of the banking system, or behind automatic weapons. We need to limit their freedom, in order to preserve our own opportunities.

Why aren’t Americans more risk-averse? Is it because America is populated by the descendants of people who preferred the risk of the great unknown, to the certainty of what they had at home? If so, it’s strange to see how strong the effect is, and just how Kraut-headed (sorry, but that pun was irresistible) Charles Krauthammer is in his belief.