Product Description: What should be done about airplane safety and terrorism, global warming, polluted water, nuclear power, and genetically engineered food? Decision-makers often respond to temporary fears, and the result is a situation of hysteria and neglect--and unnecessary illness and death. Risk and Reason explains the sources of these problems and explores what can be done about them. It shows how individual thinking and social interactions lead us in foolish directions. Offering sound proposals for social reform, it explains how a more sensible system of risk regulation, embodied in the idea of a "cost-benefit state," could save many thousands of lives and many billions of dollars too--and protect the environment in the process. Cass R. Sunstein is the Karl N. Llewellyn Distinguished Service Professor at the University of Chicago. Appointed by President Clinton to serve on the Advisory Committee on the Public Interest Obligations of Television Broadcasters. His many books include Republic.com (Princeton, 2001) and Designing Democracy (Oxford, 2001). He has worked in the United States Department of Justice and advised on law reform and constitution-making in many nations.
A short review of 'Risk and Reason' It is sometimes referred to as "emotional decision making", when after accidents which cause loss of life, government authorities decide to spend irrational huge budgets to try to prevent these accidental risks from happening again. This 2002-book of Prof. Sunstein from the U of Chicago explains the sources of such irrational behaviour and comes up with novel ideas what can be done about it. This book contains a great deal of new material, but it also draws on Sunstein's publications in the J of Risk and Uncertainty, Stan L Rev., and his 2001-book 'The cost-benefit state', amongst others.
The book gives the reader a lot of recent case studies, such as the sniper murders in the Washington DC area in fall 2002, the SARS epidemic, the Love Canal controversy in the 80s, as illustrations of people's unjustified fear, which in the same time neglects the real hazards, such as obesity, indoor air pollution, sun exposure, etc.
Risk and Reason advocates the government to produce cost benefit analyses (CBA) before choosing an emotional course of action. Sunstein argues in his book to see CBA as a pragmatic tool, designed to promote a better appreciation of the consequences of a certain regulation, rather than a form of unethical, barely human calculation, treating health and life as variables for some kind of huge maximising objective function. The author succeeds in delivering this message to the reader very well.
Sunstein urges toward four alternative strategies in optimal cost-saving risk regulation: disclosure of information to the public, economic incentives, risk reduction contracts and free market environmentalism. With the economic incentives he means financial penalties for harm producing behaviour, and tradable emission rights (similar as the Kyoto protocol is designed to reduce global warming. The alleged fact that risk creators might be given a right to create harm is shown to be false.
Political Sunstein is a lawyer. He is neither a scientist nor an economist. His advocacy of (what he calls) "rational" and "scientific" models of risk evaluation appears to be motivated by politics, not good science or economics. Be wary of his methodology and his rigor.
Insights Into Rational Risk Management for IT Professionals While this book focuses on government regulation of health and environmental risks (regulation is government-speak for risk management), IT risk managers can learn a lot about IT risk management from the book. For example, Chapter Three is entitled "Are Experts Wrong?", which will tell you why you need to be cautious about adopting "Best Practices." Chapter Five is entitled "Reducing Risks Rationally," just what every risk manager should be striving to do. Sunstein makes a very convincing case for the value of cost benefit analysis in managing risks. If you are responsible for risk management, get this book and read it.
Huge Helping of Reason, Needs Salt
The bottom line on this book is clear: our governance of risk to the public tends to be managed by political gut reaction rather than informed investigation; there is no clear doctrine for studying and articulating risk (for example, distinguishing between high risks to a few and low but sustained risks to the many, or between three levels of cost-benefit analysis so that choices can be made); and the best form of risk management may be through the effective communication of risk information to the public rather than imposed costs on private sector enterprises.
As reasoned as the book is, it also constitutes a direct attack on all those who expouse the "precautionary principle." While I do not agree completely with the author, who seems to feel that rational study allows for the discounting of any risk to the point where it can be economically and politically managed at an affordable cost, he certainly take the debate to an entirely new level and his book is--quite literally--worth tens of billions of dollars in potential regulatory risk savings.
Most compelling is his methodical aggregation of data from several sources to show that the cost of saving one life (he notes that we fail to distinguish adequately between a life saved for a few years and a life saved for many years, or between young lives saved for a lifetime and old lives saved for a brief span of time). Table 2.1 on page 30 is quite astonishing--of 45 major regulated risks, one (drinking water) costs over $92 billion per premature death averted; eight including asbestos cost between $50 million and $4 billion; seven including arsenic and copper cost between $13 million and $45 million; 14 including various electrical standards cost between $1 million and $10 million per death averted; and 15 cost less than $1 million per death averted.
What cost human life? Even on this there is no standard, and even within a single regulatory agency (e.g. the Environmental Protection Agency) there are different calculations used in relation to different risks being regulated. The author does a really fine job of comparing the public perception of the value of a life saved ($1.3 million for automobile-related risks, $103 million for aviation-related risks) with the values used by the government and the courts, which vary widely (into the billions) but seem to hover between $10 million and $30 million per life saved and without regard the the number of life-years actually involved.
The heart of the book is in its conclusion, where the author proposes a four-part strategy for dramatically reducing the cost of regulatory risk management, suggesting that we focus on 1) disclosure of information to the public; 2) economic incentives; 3) risk reduction contracts; and 4) free market environmentalism. With respect to the latter, he is strongly supportive of allowing the "sale" of pollution privileges between nations and industries and companies.
For additional observations on reducing risk to the future of life see my reviews of Joe Thorton on "Pandora's Poison," Raffensperger and Tickner on "Protecting Public Health & The Environment," Novacek on "The Biodiversity Crisis," Czech on "Shoveling Fuel for a Runaway Train," Lomberg on "The Skeptical Environmentalist," Helvarg on "Blue Frontier," and Wilson's "The Future of Life."
Cass Sunstein and Lawrence Lessig join Jerry Berman and Marc Rotenberg and Mike Godwin as America's "top guns" in responsible law-making. This book makes a great deal of sense, is worth a great deal of money, and should guide the future evolution of regulatory and information-driven risk management.
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