Despite financial crises, BP's mess in the Gulf and now TEPCO's costly meltdowns in Japan, Matt Ridley doesn't understand the attractiveness of a little 'precaution'
In the wake of the recent deaths and illnesses in Germany from a dangerous strain of E. coli, thinker and former banker Matt Ridley – who’ve I discussed before in the context of nuclear crony capitalism – has an article in the June 11 Wall Street Journal on “When Precaution Trumps Public Safely“.
As I thought Matt’s post to be curiously uncurious as to the factors driving the ‘precautionary principle’, I ventured to address the deficiency with a thought or two of my own, and left the following comment at Matt’s blog:
Matt, ever wondered where the ‘precautionary principle’ comes from?
Ever heard of ‘once burned, twice shy’?
It seems clear to me that the insistence of many on the precautionary principle has it roots in massive externalities (pollution) by government activities and by corporations, those great pools of anonymous and irresponsible capital who shareholders, freed by the government grant of limited liability from downside risks, decided to turn a blind eye to risk management.
If we want more risk-taking, we should demand more responsibility by investors. Saying that it’s the common man who has to have the greatest skin in the game is a recipe for continued stonewalling.
Tom
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