Risk Management is the practice of evaluating decisions based on the severity of the downside rather than the probability of the upside. In the Adams framework, the primary goal is the avoidance of “ruin”—situations where a negative outcome terminates one’s ability to continue playing the game. This stands in contrast to standard economic models that prioritize expected value.
The Asymmetry of Ruin
The core of this framework is identifying Asymmetric Risk. Adams often points out that humans are poorly wired to understand non-linear threats. A common error is attempting to maximize gains while ignoring “black swan” events that could lead to total failure.
In the context of public discourse, Adams highlights how professional survival often dictates behavior more than the search for truth. He noted that regarding certain political narratives, “it would have been career suicide to question the fine people hoax even a year ago.” In this environment, the risk of being ostracized by the “fine people” narrative—a “hoax that the president isn’t active like he’s supporting the neo-nazis or something”—outweighed the benefit of factual accuracy. For many, staying silent was a rational exercise in risk management.
Mature vs. Emerging Risks
A frequent pitfall in logic is treating all risks as equal regardless of their history. Adams argues that “it is a ridiculous comparison of a mature risk… versus a risk that’s just starting.”
When evaluating new technologies or societal shifts, “you don’t judge future risk by past experience if you’re smart.” Past stability does not guarantee future safety when the variables have changed. This applies to everything from global policy to personal health. For instance, when discussing medical mandates, Adams suggests that instead of top-down systemic requirements, risk is better managed at the micro-level: “it really should go down to the parent and the doctor having a conversation.” This localized approach prevents a single point of failure from impacting the entire population.
Reversibility and Control
A key factor in Scott’s evaluation of risk is the “off switch.” If a process can be halted or reversed, the inherent risk drops significantly. He applied this logic to climate engineering, stating, “I have confidence in humanity that we would unplug the carbon capture machines if we started taking too much.”
If a system lacks a clear path to reversal, the risk profile shifts from manageable to existential. This is why Trump’s tendency to be “manifestly obnoxious” was debated as either a feature or a bug; for his supporters, the risk of a “politically correct” leader failing to disrupt a failing system was greater than the risk of a leader who ignores social norms.
The Insignificance of Minor Variables
Effective risk management requires ignoring “noise”—the small variables that do not move the needle on the final outcome. Adams uses a vivid analogy for this: “Does the fly pooping on a giant pile of poop change anything? … in a political sense no difference.” If an action doesn’t change the trajectory of a major risk, it is not worth the energy of evaluation.