I am particularly fond of the late Peter Bernstein’s definition of risk: “More things can happen than will.”[PB] I like that definition not because it tells me what to do, but rather because it tells me what comes with any new expansion of possibilities. Put differently, it tells me that with the new, the realm of the possible expands and, as we know, when the realm of the possible expands, prediction is somewhere between difficult and undoable. The dynamic is that we now regularly, quickly expand our dependence on new things, and that added dependence matters because the way in which we each and severally add risk to our portfolio is by way of dependence on things for which their very newness makes risk estimation, and thus risk management, neither predictable nor perhaps even estimable.
The Gordian Knot of such tradeoffs — our tradeoffs — is this: As society becomes more technologic, even the mundane comes to depend on distant digital perfection. Our food pipeline contains less than a week’s supply, just to take one example, and that pipeline depends on digital services for everything from GPS driven tractors to robot vegetable sorting machinery to coast-to-coast logistics to RFID-tagged livestock. Is all the technologic dependency, and the data that fuels it, making us more resilient or more fragile?