The chance of six specific Irish horses winning at Cheltenham on the same day last week was 1.5 million to one. But it happened.
The probability of the results of the Euro 2012 qualifiers being exactly as they will turn out to be is extremely low. But it will happen.
If you had correctly put an accumulator on this years election results being exactly as they were (seat by seat), you’d have made a fortune.
So events, which have a low probability of occurring, can occur. But given that few gamblers wind up billionaires, we know it is extremely difficult to select in advance which low probability events will occur.
If we continue to build, and extensively use, a lot of gas pipelines, nuclear power stations, bridges, dams, airplanes, ships or other things capable of spectacular destruction – some of them will destruct spectacularly.
Nassim Taleb, an expert on risk, styles the modern world ‘extremistan’ – the lack of redundancy in the system and the interconnectedness of everything makes our world fragile rather than robust (see note 142 here on the Japanese nuclear problem). Vulnerable to large scale asymmetric shocks (low probability / high impact events) that can derail our financial, economic, energy and food systems. Elsewhere, Jared Diamond has documented the stratospheric rise and fall of many civilisations, often peaking just before outright collapse.
Modern life is dangerous and fragile, but we probably couldn’t support the planet’s 7 billion inhabitants without abundant energy supplies and other risky infrastructure. The large asymmetric risks associated with these are real. If we are uncomfortable with this, do we want to take our chances in the stone age, or is that we just want other people to take these risks for us?