Risk: Aversion vs. Tolerance

This past weekend was our second time at the Carolina Jaguar Club Concours d’Elegance in the North Carolina mountains, right by the Blue Ridge Parkway—God’s own road. As you’d expect, people show up in cars representing the past several decades of automotive excellence—this year, from 1949 to 2019. It occurred to me, while I browsed around, taking pictures and dreaming hard of my own someday-Jag, that some “old-car” people accept risks that I would not. And that turned my mind back toward something I’ve put a lot of thought into and written a lot about over the past several years: risk aversion and risk tolerance.

Sure, some people bringing in cars from the 1950s and 60s are unloading them from fully-enclosed trailers, then putting them right back in for the trip home. But plenty of other folks drive their Jags from the 60s, 70s, and 80s. They’re glorious cars to drive—as long as you don’t expect them to do what today’s Jags can. But the set of risks they accept are serious, compared to the set accepted by those of us who drive around in cars made in 2014 and 2018.

Since the early 90s, we’ve seen serious changes in safety technology, some of which is obvious and some of which is hidden. Anti-lock brakes, which I first saw on a mid-80s high-end BMW that today would cost around US$130,000, became ubiquitous. So did air bags, which began as just one in the steering wheel hub and one in the passenger dash, and now surround the occupants in a curtain of instantaneous cushioning. At the same time, engineers developed effective impact-absorption body structures, collapsible steering columns, crumple zones, bumpers capable of absorbing minor impacts all on their own, electronic traction and stability control, seatbelt pretensioners—all of these features first appeared on high-end luxury cars (usually, the Mercedes-Benz S-class), but they are now standard on the humblest of econoboxes, in the U.S. at least. Now, we have “the nannies”: collision-mitigation braking, lane-keep assist, rear cross-traffic alert, backup cameras, blind-spot monitoring, adaptive cruise control, even semi-autonomous driving.

In a 1986 Jaguar XJS, you have exactly none of that. You have seatbelts and shoulder belts. If you’re hit by an idiot or a drunk, especially in the most popular idiotmobile in the U.S.—the full-size pickup truck—you are far more likely to be injured or killed than you are in a 2019 XJL. That’s a statistically-verifiable fact.

The interesting bit, though, is that it’s a different risk scenario to drive that ’86 in 2023 than it was in 1986. In 1986, that was about the best you had. Nobody looked at a 1986 XJS and wished it had all the stuff I just listed above. They compared it to other 1986 cars, not to cars of the future. Now, we have a choice. Nobody at the Concours driving a 1986 XJS, or a 1965 XKE (especially not that—XKEs can cost $300,000 these days) is doing so because that’s their only option. The set of risks they choose to accept is the same as that chosen by the 1986 buyer—but under radically different circumstances.

So—how do these changes come about? First, there has to be some motivation for it. Seatbelts came about because statistics were piling up about people being thrown into hard steering wheels and dashes and through windshields. The technology was not difficult to execute and it was cost-effective. Once deployed as an option, the data quickly made it clear that they made a drastic difference in lives saved and injuries prevented. After the usual delays for lobbying and stalling, they were ultimately made mandatory here. The same basic story goes for several subsequent developments. Recently, backup cameras were mandated by the Federal Government. Some of the gee-whiz tech you see on a 2023 S-class will be not only standard but mandatory at some point—we just don’t know for sure what or when.

Which is great. But I’m not implying that people who choose to drive a 1986 XJS shouldn’t do that. Not at all. (I would go so far as to say, though, that people who have a choice shouldn’t be driving their kids around in 1986 cars, except under tightly-controlled circumstances—like the village Christmas parade.)

Risk tolerance is, in these cases, a highly personal decision. You get the right insurance, you learn the car well, and you take your chances.

In the world of work, it’s different; people work under the conditions imposed by their employers. In the world I work in, that meant working on board sailing vessels that, in the best of circumstances, carried an inherent set of risks that would be absolutely non-negotiable to most workers in the “developed” world in 2023. I won’t take up more space listing all the modern safety technologies present on commercial vessels comparable to those developed for cars. But what interests me is that even technologies that would have been easy and cost-effective to deploy on commercial vessels were not. I’m thinking of life buoys, jacklines (stout lines run on deck to which sailors can hold on or clip on to keep from falling overboard in rough conditions or at night), watertight bulkheads (present on late-medieval and early-modern Chinese ships), and buoyant life vests. These were all perfectly do-able on an eighteenth-century vessel.

Two things worked against them. One was that the work—especially on a square-rigger—was just inherently and unavoidably dangerous. Their advantages made them worth it to operators, but square-rigged vessels require climbing the rig to operate the sails. Once up the masts, the crew have to go out on the yards to let out or take in sail. This is challenging enough work in flat water with little wind. They did it in the Roaring Forties in a storm, with ice on the spars and frozen sails.

Trainees on the fore royal yard of the Prince William. They’re all wearing harnesses—standard precaution now—and using footropes. Footropes, it would seem, were introduced not for crew safety, but for faster sailhandling.

https://en.wikipedia.org/wiki/Yard_(sailing)#/media/File:CrewOnRoyalYard.jpg

Originally uploaded by Peter Verdon, CC-BY-SA 3.0

Captured still of a crewman going out on the yard to try to take down a shredded sail in the Southern Ocean, from Irving Johnson’s Around Cape Horn, taken by him with a home movie camera in 1929, while crewing on the great German barque Peking, launched in 1911 and recently restored to her former glory in Hamburg. This man is probably at least 30 meters above the deck, and perhaps as high as 100.

In order to do the work, then, the culture of labor had to be highly risk-tolerant, to the point of a healthy degree of fatalism. It is akin to the culture of combat soldiers, or fighter pilots. Like those cultures, it carries with it a strong streak of superstition—psychological coping mechanisms for living with the constant high risk of death or serious injury, both to you and to your comrades. Where the culture of labor and the subjective reality of the seafarer intersect is something I hope to work on soon (are you reading this, Brooke?), and the entry point will be risk tolerance. For now, I’ll trot ou, once again, that Benjamin Franklin quip that says so much: “[O]ur seafaring people are … cowards only in one sense, that of fearing to be thought afraid.” Eighteenth-century sailors were by no means afraid to pressure their employers for more of what they wanted—they deserted all the time, they mutinied, they took owners and captains to court. But, while they might (and sometimes did) refuse to sail on a vessel they considered unsound or poorly-kept, they did not pressure their employers for the sorts of safety technology I just mentioned.

We live in a much different world of work—at least those of us who live in the richest countries. Our governments, and our labor unions, do a lot to protect us from avoidable risk, just as automakers and governments do a lot to protect us from injury in traffic accidents. There is a cost for everything, however, and protection from risk makes things more expensive. We value the preservation of human life enough, as a society, that we are willing to spend money on it—and we have the money to spend.

Some people are so risk-averse that they spend as much time as possible on the couch. They will always choose not to undertake any risk simply for recreation. Others actively seek it out. Some of them leave bereaved spouses and children behind. Most of us operate somewhere between those two poles. If I have little education and no connections, but I’m young and strong, I might consider whether to accept little risk and flip burgers, or a lot of risk and sign on to an Alaskan crab boat. I’ll barely scrape by flipping burgers; I might, if we all get lucky, bring home a haul of cash along with a haul of crabs if I go fishing. On the other hand, I might not come back at all. Risk, in the workplace, tends to carry reward. In the marketplace, capitalists get rich (or go bust) on that premise. But financial risk, while intricately connected to physical risk, is a whole other topic.

We can learn a lot about a person or a culture by thinking about their risk tolerance and risk aversion. What do they want, and what risks are they willing to take to get it? There’s both literally and figuratively a whole world between someone choosing to drive cross-country in an E-type Jag and an East Javan worker harvesting chunks of sulfur from a volcano wearing only a bandana over his face. Still, we can think productively about both from a risk aversion versus tolerance perspective.