My September Bookshelf: Asia and Risk

Those long summer days are great for reading, and as they draw to a close I wanted to share with you some of the books that I’ve enjoyed recently and liked enough to share: a fantastic geo-economic overview of Asia, and three very different books on risk. Enjoy!

THE FUTURE IS ASIAN by Parag Khanna

Long before I caught the Asia bug, so many of my friends who moved there over the years described their decision with these words or a very near approximation: “Asia is the future.” As I travel there more frequently, particularly to China, I finally “get” what they mean. Geopolitical futurist Khanna’s new book reinforces that impression with solid analysis and anecdotes of how the interdependent region is creating a new template for the future of the world. With ten times more people than Europe and twelve times the population of North America, Asia’s demographic advantage makes it harder and harder for Westerners to keep misunderstanding. “Asia is the most powerful force reshaping world order today,” Khanna writes. “It is establishing an Asia-centric commercial and diplomatic system across the Indian Ocean to Africa, reorienting the economies and strategies of the United States and Europe, and elevating the appeal of Asian political and social norms in societies worldwide. Refreshingly free of the hysteria that characterize much of Western punditry about Asia these days, Khanna captures the variety and vibrancy of the region through multiple lenses of economics, geopolitics, technology, business, demography, and civilization writ large. As the United States backs away from its global role, confident, ambitious Asian nations are embracing a new role that nobody can afford to ignore. The Future is Asian is a fantastic guide to trends that are shaping the world.

As markets gyrate and fund managers lament the loss of “risk appetite,” the theme of risk in general remains high on my mind. The following three books offer very different, but all valuable, lenses on different kinds of risk.

AN ECONOMIST WALKED INTO A BROTHEL: And Other Unexpected Places to Understand Risk by Allison Schrager

The title anecdote refers to the author’s curiosity about why some sex workers give up as much at 50 percent of their earnings to hedge risks in a dangerous business that makes them vulnerable to violence, stigma, and communicable diseases. Schrager shares a fascinating analysis of the economics and risk-reward calculations of the industry. “Brothel work is what is known in finance as hedge: giving up some of your potential earnings in exchange for reducing risk. The hefty price of this hedge tells you how much risk reduction is worth to sex workers in Nevada,” she writes. Later chapters include case studies of surfers, movie makers, paparazzi, and horse breeders illuminate principles for making risk decisions. Schrager shares strategies for balancing risk and reward, recognizing and compensating for the ways in which we are irrational when it comes to risk, maximizing the reward, embrace strategies to reduce risk, and get comfortable with uncertainty. This is an entertaining and thought-provoking read.

THE WORLD ACCORDING TO FANNIE DAVIS: My Mother’s Life in the Detroit Numbers by Bridgett M. Davis

This book is a great read and a wonderful look into both the day-to-day risks of raising a family in a world that had stacked the odds against them. Davis is a wonderful writer and her mother, who ran her own numbers business to support her family, is a powerful character. What do we take risks for? For the people we love. “[O]ur middle-class prosperity was tenuous, always under threat, because Mama’s livelihood was based on a win-or-lose daily gamble. Nowhere was that threat more evident than in our household’s nightly ritual: as dusk fell and we all waited for the day’s winning numbers to come out, a tense silence moved through our home like a nervous prayer.” Apart from the personal story, though, this book is a reminder of how systems are set up so that some people profit from risk more than others. Fannie Davis’ success is all the more telling for having overcome those odds.

CLEAR AND PRESENT SAFETY: The World Has Never Been Better and Why That Matters to Americans by Michael Cohen and Micah Zenko

Though policy analysts Cohen and Zenko are solidly of the liberal persuasion, they share common ground with the opposite side of the political spectrum: a deep distrust of many of the experts who tell us what to fear. And they have a point. They marshal evidence that politicians have exaggerated threats like terrorism –which, they show, harms fewer Americans than falling televisions or bathtub drownings- for political purposes.

Their explanation for Americans’ anxiety is counterintuitive: “Americans tend to see the world as far more dangerous than it is precisely because it is safer,” they write. “Conflicts that were once more routine have become more unusual and thus receive greater (and more vivid) media attention. This bolsters the idea that we live in a world of constant conflict when compared to recent history⁠.” This “Threat Industrial Complex,” they argue, has led to a “real readiness crisis” when it comes to some of the biggest known dangers -many of which are things we have the power to control. For example, they cite 2.3 million deaths a year from non-communicable diseases which cause $330 billion a year in health and productivity losses, and faulty infrastructure costing businesses $27 billion a year. Half of people who die in traffic accidents were not wearing seatbelts.

While I take issue with some of the threats Cohen and Zenko say are overblown –say water scarcity, which I think gets less attention than it needs, or cybersecurity—I agree with their main point: Societies today often fail to recognize the biggest threats because they are looking in the wrong places.

This article is part of my new LinkedIn series, “Around My Mind” – a regular walk through the ideas, events, people, and places that kick my synapses into action, sparking sometimes surprising or counter-intuitive connections. 

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