I'm so glad someone other than some shaggy free-market fundamentalist has finally written a book on why trying to eliminate all failure is bad for us individually and nationally. Foolproof is important. To understand this, read it in the context, for example, of recent revelations about the forecasting failures of mainstream economists and their "physics envy" and over-mathematized modeling. With this kind of thing in mind, it's crystal clear what Greg Ip, Foolproof's author and one of America's best economics journalists, is saying.
For me Foolproof clarified two insights. The first is this: the goal in balancing "engineering" that attempts to eliminate all risk, and "ecology" that wants to let nature take its course, is to elect officials who can get us on a sustainable economic path -- a path, which recognizes that we operate in a world of radical uncertainty, and which maximizes our own and our grandchildren's ability to respond to whatever the future brings. For me this screams that investments in kids and their parents should be our highest priority. If we don't like the phrase, "In the long run we're all dead" and instead we want as a species to outlive the long run, healthy, close-knit, educated citizens are our greatest resource.
The second insight is dark. My years in Washington and business lead me to believe that a great deal of resources are invested by elite coalitions to shape how economics and risk are thought about. The policy results of this, especially in economics, systematically benefit the funders of the endowed chairs, think tanks, and lobbyists who encourage and propagate this kind of thinking. To a considerable degree the resulting commitment to risk-eliminating "engineering" policies in healthcare, defense, finance, education, macro-policy, and social resource allocation, contribute to rising inequalities in wealth and opportunity.
The dark aspect is how systematic it is. Whether it is called crony capitalism, racism, or classism, the behavior of many elite coalitions is characterized more by archaic primate dominance than modern mutual cooperation. The results can be tragic. History is path dependent. Once a nation is on one path, it's extremely costly and sometimes impossible to get off a bad path and onto a good one. The path of slavery and the US Civil War are examples. For many elites, the paths they're able to establish in key US sectors are beneficial to them and their offspring. For the rest of us, these paths too often lead straight to cliffs.
The answer Ip gives to balancing "engineering" and "ecology" at the end of Foolproof is crucially important. In a radically uncertain world we don't know what the probability distributions are for the numbers on the policy dice we throw or even if there are any governing distributions at all. In this world, the strongest species survival strategy is to keep available as many options and individual capabilities, as much population diversity, as much environmental variety, and as much familiarity with failure and adversity as well as success, as possible. Ip is saying looseness in the system -- that is, some riskiness -- is what is needed. For me, that and investing in everyone's ability to understand and respond to risk are the best strategies for assuring long-term human success.
Foolproof is a superb book. Get it and read it.
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