Managing risks the right way

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Managing risks the right way

As a member of the president’s Review Group on Intelligence and Communications Technologies, whose report was released this week, I was struck by some close connections between debates over national security and environmental protection. In both contexts, many people favor the Precautionary Principle, which can lead in unfortunate directions.

In environmental policy, the Precautionary Principle means we should take aggressive action to avoid risks, even if we don’t know that those risks will come to fruition. If the problem involves genetic modification of food or nuclear power, we should welcome precautions against potentially serious hazards, simply because it is prudent to be precautionary, and better to be safe than sorry.

But there is a serious problem with the Precautionary Principle, which is that risks are on all sides of social situations. If we take aggressive steps against genetic modification of food, we might deprive people, including poor people, of food that is low in cost and high in nutrition. If we ban nuclear power, we might end up with greater reliance on coal-fired power plants, which increase the risks of climate change.

The point is general. Whenever we engage in regulation, we are likely to impose costs. Increases in costs can create risks, including potentially catastrophic ones.

It turns out that the Precautionary Principle is incoherent, even paralyzing, because it forbids the very steps that it requires. Precautions are mandated by the principle, but precautions create risks, and so they simultaneously offend the principle.

None of this means that we shouldn’t be concerned about genetic modification of food or nuclear power. The point is that we need to investigate the consequences of precautions, and some of those consequences are unlikely to be so good.

Then there is the area of national security, and surveillance in particular. It is tempting to adopt some version of the Precautionary Principle on the ground that it is important to counteract serious threats to the nation, including terrorist attacks, and surveillance can be helpful, even indispensable.

Even if some kinds of surveillance sweep up an immense amount of material, surely it is better to be safe than sorry. It is hard to rule out the possibility that if the intelligence community obtains as much information as technology permits, it will find some information that is helpful for national security purposes.

The problem is that multiple risks are involved. Surveillance creates risks to public trust, personal privacy and individual liberty. If government holds a great deal of information, there is at least a risk of abuse - if not now or soon, potentially in the future. And if government is engaged in extensive surveillance, there is a risk of a chilling effect on free discussion, on journalists and on journalists’ sources.

That isn’t all. As recent months have shown, surveillance creates risks to our relationships with other nations. To the extent that the United States is collecting intelligence on foreign leaders and on citizens of foreign nations, our relationships might be strained, potentially risking collaborative endeavors.

Economic factors matter as well. Surveillance and the acquisition of information might turn out to have harmful effects on commerce, certainly if it discourages people from using certain communications providers. To attract business, providers would like to be able to assure their users that their communications are secure. If they can’t do that, customers might look elsewhere.

In these circumstances, it isn’t sufficient to defend any particular approach to surveillance as “precautionary,” or as a way to reduce potential risks. True, precautions can be exceedingly important, and national security must be a central goal of any well-functioning government. In our report, the review group honors those in the intelligence community who have worked, and are working, every day to keep their fellow citizens safe.

For Congress and the president, however, the task is to manage a wide assortment of social risks, with careful attention to the likely consequences (including both costs and benefits). The operating principle involves risk management.

The Risk Management Principle doesn’t exactly have a nice ring to it, but it is the right foundation for public policy - whether the question involves environmental protection or national security.

*The author, the Robert Walmsley University professor at Harvard Law School, is a Bloomberg View columnist. He is a former administrator of the White House Office of Information and Regulatory Affairs, the co-author of “Nudge” and author of “Conspiracy Theories and Other Dangerous Ideas,” forthcoming in March 2014.

by Cass R. Sunstein

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