The Monetization of Risk in Our Lives

I have been lucky enough to do a lot in my life so far. If I were to die tomorrow, my range of experiences could compete with the lifetimes of many people in the world. Certainly two of the main reasons for this are due to my personality and interests. However, it would be in extremely poor taste if I neglected to mention one of the other main reasons - my monetary risk in doing what I love is very low. And in America, monetary risk is everything, even if it shouldn’t be.

For all of the great things about the United States, certainly one of the country's national shames is the number of people living in poverty. According to recent census data, 46.5 million people, or about 1 out of 7 of the total US population lives below the national poverty line. To get a better sense of what this means, visit the Occupy movement website or the many progressive content curation sites online, which have done a thorough job of creating infographics explaining the income inequality in this country that underlies how a nation so rich[1] can have so many people who are so poor.

When compared to Western Europe, the UK, and Australia, the lack of social safety nets afforded to American citizens and residents is both obvious and astonishing. Sure, one could argue the quality of services and systems in the States is superior, but the fact remains that in order to get health care[2], a higher education, or to find access to reliable public transportation, most people living in America do not have a free or even cheap option. If you are living in America and do not have a certain level of income (be it your own or through someone who is supporting you), you could easily starve, drop out of school, or die of a treatable condition.

Opinions aside on what the solutions are to this rather abysmal problem, these lack of social safety nets present a phenomenon that seems to be increasing in intensity as the economy continues to stagnate and the GOP shuts down the government – the monetization of life risk. At the UN World Food Programme, I worked on a project that quantified drought risk in terms of dollars. That is to say, if a drought were to occur, what is the cost of dealing with its effects? For the insurance mechanism I was working on, this method of approaching risk makes sense. In life, monetization is only one way to approach risk, yet it dominates the way we think of success (and therefore success in mitigating risk).

I have had every incentive to work hard to build my own career, to live in a place I enjoy, and to buy the things and fund the experiences that I want. However, being an incredibly fortunate individual who was born to parents who are both willing and able to provide me with a roof, food and clothes whenever I'm in need, I have been able to approach the world with the idea that if all else fails, I will still survive with a decent quality of life. If I completely fail to financially support myself, I will not starve or be forced out on the street. In having this kind of freedom, I have been able to measure the risks of my life in ways other than monetarily – the risk of being unhappy, the risk of not pursuing a career I want, the risk of not helping others in my work, the risk of not being surrounded by a community I find desirable.

Of course approaching life this way has led to its ups and downs, though even in the lows, I have the mitigated the risk of unhappiness in that I have broken ground on something that is truly important to me. Of course many people who do not have the safety nets my family has provided have also approached life this way. And certainly what we desire in life shifts as what we have available to us changes; someone who was not born into a life that allowed for basic amenities may simply want to provide, may simply be happy in providing that security to their children.

However, it also stands to reason that in not living in a country that provides enough to survive (let alone have a decent quality of life) to everyone, a very significant portion – likely even the majority – of the American population has had to make decisions based primarily, if not entirely, on monetary risk. Put in a very cliché way, much of the American population has approached life knowing they cannot follow their dreams if their dreams do not pay enough. It doesn’t matter if someone in this segment of the population is an especially talented computer engineer, grief counselor, artist, or teacher. If they feel as though the monetary returns in their investment to pursue what they want cannot provide enough to survive, there is no adequate safety net on which to fall back.

Some would argue that the incentive to simply survive means that people work harder than they would otherwise. Indeed, The Economist reported in their latest issue that the Pew Research Center found only 59% of Americans feel as though the government has a responsibility to take care of people who cannot take care of themselves, down from 71% during the Reagan years (1980s). As an international development practitioner, to that I simply say, look at the world around you. The basic need to survive in countries of South Asia, West Africa and Central America is not enough to take care of everyone when there is not enough to go around or the reality in place systematically keeps people at the bottom. Creating more from something is much easier than creating something from nothing.

Optimistically, this country has not wavered on the idea that anybody can become successful, regardless of race, creed, religion, or background. Unfortunately, with the increase in people who do not want social safety nets for all and the ever-declining social services provided in the United States, putting non-monetized life risk ahead will always have the danger of potentially not surviving. Without any breathing room, someone who could have been the next Albert Einstein may never feel empowered to move beyond a life as a cashier. And why would they? The risk is too high.

---

[1] The 2012 GDP of the United States was USD 15.68 trillion.

[2] The States that have embraced the Affordable Health Care Act will be able to provide much cheaper options to more people starting in January 2014. Still, these options are much more expensive that our Western counterparts.