Probability of Risk

Statistically, the probability of risk is 100%. The risk is fully extended. Discounting the probability of the risk, the extent is "determined."

The risk is always fully valued. Discounting the probability it will not occur (the null hypothesis) is the risk as far as we can determine. So, the only way to be completely certain (the probability of risk fully discounted to zero) is to have complete control (like consolidating markets to determine the extent of the risk, for example, or by controlled experiment and nulled hypotheses as a scientist).

In the world of scientific inquiry, hypotheses are nulled to verify the probability of having acquired truth, or knowledge, as best can be possibly determined. Even after this rigorous, empirical, cognitive regime, theories are tested for predictive utility. Since theories are apt to be thrown out or amended, knowing truth is an approximation of its absolute value (discounted from the fullest extent), much as Socrates and Plato postulated.

Platonically, there is "nothing" really new. Everything reoccurs in different forms over time (and space), becoming a closer approximation of absolute value (what science discounts, or nulls in the form of hypotheses, to absolute zero, or certainty, otherwise known as the unchangeable condition of God, or what is Platonically described as "the world of ideas").

Classical cosmology (the theory of everything) does not postulate random events. It postulates truth can be absolutely known (things appear random if you don't know the truth--or have perfect knowledge like God). Everything can be known by its ideal measure (like the 100% measure of fully extended probability we use today). It is not necessary to null hypotheses because every thing teleologically tends to the ideal form of it (including the risk, which ideally is zero).

It is unnecessary to verifiably know something by knowing what it is not if you already know what it is to the fullest extent (its absolute 100% value).

Political, economic, and religious arguments, for example, tend to the classical, teleological form to avoid the risk of verifiable hypotheses. Arguments are reduced to axiomatic moral principles, or hazards, that run the risk of negative consequence if violated. Since predictive utility tends to self-fulfilling prophecy (like not cutting taxes for the rich causes unemployment), validation of axiomatic principles masquerade as empirical verification of hypotheses (with the proposition of the risk "determining" or prophesying its absolute value).

Classical philosophers tended to describe and explain the dynamic of nature with a teleological attribution. It was not until the scientific revolution that the classical, teleological interpretation was replaced with ontology.

Successful use of the scientific method launched the current probabilistic interpretation of the risk in which we null hypotheses, discounting the possibility that we can ever obtain absolute truth, ontologically anyway.

The Constitution of the United states was also a product of this cognitive, scientific revolution. We recognize the empirical benefit of a verifiable government by consent, discounting the probable extent of the risk to the inalienable right of self-determination.

Delimiting the risk to the direct control of The People allows for a scientific process--a continuing revolution--of continuous improvement (maximum participation) rather than a government of self-adulated kings, criminals, or any of various forms of elite incompetence. An intellectual, moral competence is especially important and inherent to a pluralistic model, recognizing and protecting the stability of keeping risk pluralistic and deconsolidated (exactly the opposite of what we have now).

Rather than economy-of-scale organizations that are too big to fail and create barriers to entry (minimum participation), maintaining a pluralistic model recognizes the moral value and practical effect of deconsolidated risk. A risk ontology that systematically operationalizes self-interest with the public good recognizes that providing for the wealth of nations is not by means of its deprivation.

Accumulating a benefit by causing a detriment (deprivation of others) is not in anyone's self-interest. It accumulates risk and causes general instability.

Ensuring the fullest probability of participation (pluralism) is not only a moral sentiment, it is a practical measure that, as our founders recognized, ensures the general welfare (avoids the accumulation of systemic risk that plagues us now).

Pluralism operates with the working hypothesis that we all know everything together, forming the perfect reduction of risk--self-determination or self-government. That reduction does not occur without the fullest participation, and income is required to participate. Self-determination is dependant on the provision of income, not its deprivation.

Providing for the commonwealth is a moral imperative (it has absolute value). If we want to reduce systemic risk, it means absolutely everything.

While we struggle to come up with a scientific theory of everything, classical philosophers breezed right through epistemic cosmology 101 with absolute, but unverified, knowledge of the truth.

By means of verification we recognize that many things once considered to be empirical truth and declarative knowledge (like the earth is flat) are now declared disconfirmed hypotheses. Indeed, we tend toward an absolute value of knowing what the truth really is, but fully dependant on our perception of it. Truth is a phenomenology. It is not independant of the mind as Aristotle argued (just as the real value of capital is not alienated from labor as Marx conceived it, but fully realized in the detrimental value of the risk).

The risk analyst is presented with a phenomenology of the risk that this series of articles has attempted to demonstrate. Analysts are keenly aware that the perception of risk is both a determining variable and the variable to be determined. It makes for an especially fractile reduction in which acting on the information affects the values being observed (the risk of unintended consequences--randomness that classical philosophers attribute to ignorance of absolute values).

Perception of the risk not only determines the probability, but the relative value risk yields in a current environment. Current, relative value is a coefficient of an absolute value that is knowingly increased or reduced. The risk coefficient (risk-to-reward) indicates the extent of the risk and delimits the risk to be encouraged or avoided. We then discover (perceive) the extent to which we are all knowingly and willingly "determined" to discount the probability of what we don't want will occur.

As we discount the probability of having obtained knowledge, we consistently verify that there is no absolute zero (trying to eliminate economic risk, for example, produces political risk in equal proportion). Wherever we find nothing, something always appears. So, maybe the classics are right--we are just discounting the probability of our ignorance to discover what we knew all along.

While modern physics has stirred a popular critique of scientific inquiry, let's turn the heightened philosophical awareness to the political-economic domain where critical thinking gravitates against what remains of social inertial forces.