Saturday, April 3, 2010

What is Risk? My Term Paper Abstract

I just typed a term paper abstract for an hour and my head is hurting. I hope this makes sense!

What is risk? While risk is known to be an all-encompassing facet of life, the intangibility of the term leaves much to be desired from a casual academic or even practical exploration of its nature. Risk, at least in this proponent’s opinion, is only as significant as the degree to which a party, who becomes aware of its existence, concerns itself with the possibilities of any undesirable event occurring; along with its resulting conditions, circumstances and consequences. At the very essence of risk is perhaps a philosophy of humanity’s nature, as self-aware and self-conscious beings; that as biological creatures, a unique purpose is conceived by each person from his psyche. The purpose may not necessarily be of divine or messianic stature, but still most probably above basic animal instincts of plain survival, physical sustenance, species propagation and whatnot . It is perhaps because humans have the intellectual capacity that they are able to translate risks and perils beyond the fight-or-flight mechanism of choice. People are able to attribute events and circumstances with gradients of severity that may affect their conceptualized purposes, intentions or endeavors, whether it be as simple as crossing the street or as complex as doing swing trading in financial derivatives.

Moving forward with the discussion, the proponent once again poses the question, what is risk? After having briefly discussed a subject of such abstract quality, has it already become tangible? Does it gain meaning or manifest itself if put in a certain context? In elaborating the concept, the proponent wishes to present a hypothetical Earth where only vegetation exists. If a forest fire broke-out, is there risk? From whom or what does the concern emanate from? Will the vegetation that thrives on this imaginary Earth be able to do something about the fire or will the extinguishment of the blaze be left to the whims of nature and the various converging circumstances and forces at play? Whether the reader sees these as simple rhetorical questions or irrelevant musings, it can be said that risk is given significance in the context of human conduct and commerce. While the Universe has existed and will continue to exist following all the scientific laws of chemistry and physics, the existence of risk is dependent on how human society gives meaning to it. On a practical level, certain risks will continue to threaten activities and objects of interest to humanity, but there are risks that will be eliminated, mitigated, cushioned or transferred via the tools and solutions that man reacts with. When people think, create, invent, innovate, restructure and optimize aspects of their lives through the use of instruments, systems, institutions, collaborations, syndications and arrangements, that is when it is clear that the risks exist and were eventually hedged against through the efforts of man. Although risks can be wholly or partially eliminated, there are new risks to contend with at every turn. This is true as long as man continues to create new tools, conditions and circumstances for him to deal with in his environment.

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