Risk, Danger, and Opportunity
There are three tests to determine if something is a risk rather than a danger or an opportunity:
- Risks are two-sided; you can win or you can lose. Dangers and opportunities are one-sided. If you have a sudden change of health while playing football, it is highly unlikely to be an improvement.
- Dangers and opportunities are often not measurable, and if they are, they are measured in different units than we use for everyday decisions. We can't say how many points a broken collarbone is worth, or whether two sprained ankles are better or worse than a broken finger. There is no dollar figure to put on the glory of setting a record or winning a championship. Risks, however, are measurable. In order to manage an uncertainty, we need some way of assigning relative values to gains and losses.
- Dangers and opportunities often come from nature, and we usually have only limited ability to control them. Risks always refer to human interactions, and their level must be under our control—if not, they may be risks to somebody else but they are facts of life to us.
The distinction is not inherent in the uncertainties themselves; it is our choice how to treat them. For example, NASCAR has been accused of manipulating its rules to get an optimal number of fatal crashes per year: enough to keep a dangerous, outlaw edge but not so many as to kill all the popular drivers or provoke safety legislation. I have no opinion on whether this charge is true or false. If true, ...