Managing the Unavoidable Risk

In the quest to avoid, if not eliminate, risk, we tend to organize into risk-management ontologies.

Utopian socialists, for example, envision elimination of the risk ontology that plagues capitalism by consolidating the risk into state control. It is much like what we have done to bail out firms too big to fail, but with a more equitable distribution of the benefit, absorbing the risk in an economy of scale that is ontologically too big to fail.

Economy of scale is the best model for managing risk according to mainstream, conventional wisdom.

Organizing an economy of scale is the prefered model for managing risk because it creates a too-big-to-fail ontology. The risk is routinely shifted to the system and the result is managed as an unavoidable consequence with a divisible benefit and an indivisible liability. Since the liability is a shared component and the benefit is not, the result is general systemic crises.

Systemic crises suggests an ontology is in effect, and since the distributive result is so easily predictable, mainstream analysts apologize with the "who could have known" doctrine, to go alnog with the too-big-to-fail doctrine, to maintain the exculpatory effect of the organized ontology.

The free-market process, on the other hand, if we should so choose, is both highly ontological (a highly diffused and anonymous distribution of legitimate risk that is easily managed with little-to-no need for government authority) and highly empirical (with quick and reliable accountability).

Rather than being alienating, the free-market process is organized for quick and decisive liability--exactly what big corporates do not want and are organized to efficiently avoid (the alpha risk, and with the help of government authority, the gamma risk).

Ensuring an organized plurality rather than consolidation, free-market economics ensures the organic growth necessary to spread the systemic risk. Spreading the risk in (alpha) priority rather than avoiding it and letting it accumulate into a crisis (gamma risk) proportion maximizes the legitimacy of the zero-sum to a positive, distributive effect.

The health care sector is a good example. We see the tendency to consolidate the risk into an economy of scale rather than dissipate it with a pluralistic ontology. The tendency is to direct the risk and command the cost and benefit whether public or private, and avoiding the alpha risk accumulates gamma risk, demanding an authoritarian regime to manage it. An authority, rather than consumers, determine what is produced, how, when, at what quantity, at what price, and how, when, where and to whom it is to be distributed. The freedom of both consumers and producers is reduced to a gamma-risk ontology--if we do not like it, too bad, that is just the way it is.

Freedom is reduced to fiat and gaming for the means of absolute power with the legitimacy of a populist sentiment contained in the fear of an accumulated risk. Utopian dreams become dystopic nightmares accepted as the best practice, the natural condition, of an ontological fate.

The organized ontology not only determines the distribution of the liability, but who commands and controls it.