For those of us who work professionally in risk management, it’s striking how many of the controversies surrounding the Trump administration are essentially controversies about risks. That means that if you want to argue more effectively (and intelligently) about many of these controversies, you need to know some basics from the discipline known as risk analysis. The good news is that the basic concepts are very easy to learn.
I’ve put security expert Bruce Schneier‘s pic at the top of this post because, in my opinion, he has explained the basic concepts in a very easy to understand way. As he explains in his must-read book, Beyond Fear: Thinking Sensibly about Security in an Uncertain World, he uses a simple, five-step process. Although Schneier’s focus is security, we can easily extend his five steps to apply to risks which don’t involve security.
Here are the five steps:
Step 1: What assets are you trying to protect?
Step 2: What are the risks to those assets?
Step 3: How well does the proposed solution (e.g., policy, law, technology, etc.) mitigate those risks?
Step 4: What other risks does the proposed solution cause?
Step 5: What costs and trade-offs does the solution impose?
As Schneier explains:
These five steps don’t lead to an answer, but rather provide the mechanism to evaluate a proposed answer. They lead to another question: Is the security solution worth it? In other words, is the benefit of mitigating the risks (Step 3) worth the additional risk (Step 4) plus the other trade-offs (Step 5)? It is not enough for a security measure to be effective. We don’t have infinite resources or infinite patience. As individuals and a society, we need to do the things that make the most sense, that are the most effective use of our security dollar. But, as you’ll see later in this book, subjective (and sometimes arbitrary) economic incentives make an enormous difference as to which security solutions are cost-effective and which ones aren’t.
Again, Schneier’s focus is security, but you can easily replace the word “security” with some other topic, such as “immigration” or “health care” or “environment.”
So what would this look like in practice? The following is a very rough-and-dirty example for Trump’s proposed border wall with Mexico. Please note that the following analysis is mine, not Schneier’s, and it is presented solely as a “proof of concept.” It is far from complete.
Step 1: What assets are you trying to protect? United States citizens; the budgets of governmental entities in the United States
Step 2: What are the risks to those assets? Crime (e.g., drugs, rape, etc.); taxpayer dollars spent on providing services (healthcare, public schools, etc.) to non-U.S. citizens
Step 3: How well does the proposed solution (e.g., policy, law, technology, etc.) mitigate those risks? There are many arguments on both sides; I won’t try to summarize all of them here. For illustration, I’ll mention just one argument from each side. In favor of the wall, supporters could argue the wall would make illegal entry through the Southern border much more difficult than it is now. Against the wall, critics could argue that the wall will be, at best, only marginally effective.
Step 4: What other risks does the proposed solution cause? Some critics of the border wall argue that, ironically, border walls have unintended consequences. For example, Trump’s border wall might prevent unauthorized immigrants from leaving the United States.
Step 5: What costs and trade-offs does the solution impose? The wall isn’t free, so one dimension is the cost of the wall and how to fund it. This has been talked about extensively by both sides, so I won’t say anything more about it here.
The other consideration is trade-offs. Even if the wall were able to completely eliminate illegal immigration through the southern border, which is impossible, it might also be the case that the border wall would create other risks. Such risks might include damage to the environment, encroachment on the private property rights of U.S. citizens who live along the border, making the journey even more dangerous for determined immigrants, hurting the U.S. economy, damaging our relationship with Mexico, and so forth. Furthermore, one of Trump’s proposed ideas for paying the wall might disrupt the ability of American citizens to use the global financial system. A complete risk analysis would take a look at these issues as well.
Risk analysis just forces you to ask the right questions. Even if you do that and get the right answers, you still have to communicate the results in a way that works with what we know about the psychology of risk. See the articles on this site with the “risk communication” tag for suggestions on how to do that. Here’s a spoiler: if critics focus on the examples I provided in Step 5, they will fail spectacularly to change the minds of most.