Risk analysis and risk management (original) (raw)

In the Tigris-Euphrates valley about 3200 B.C. there lived a group called the Ashipu. One of their primary functions was to serve as consultants for risky, uncertain, or difficult decisions. If a decision needed to be made concerning a forthcoming risky venture, a proposed marriage arrangement, or a suitable building site, one could consult with a member of the Ashipu. The Ashipu would (1) identify the important dimensions of the problem, (2) identify alternative actions, and (3) collect data on the likely outcomes (e.g., profit or loss, success or failure) of each alternative. The best available data from their perspective were signs from the gods, which the priestlike Ashipu were especially qualified to divine. The Ashipu would then create a ledger. For each alternative, if the signs were favorable, they would enter a plus; if not, they would enter a minus. After the analysis was completed, the Ashipu would recommend the most favorable alternative. The last step was to issue a final report, etched upon a clay tablet (Oppenheim, 1977). According to Grier (1980, 1981), the practices of the Ashipu mark the first recorded instance of a simplified form of risk analysis. The similarities between the practices and procedures of modem risk analysts and those of their Babylonian forebears underscore the point that people have been dealing with problems of risk for a long time, often in a sophisticated and quantitative way. This chapter reviews the history of risk analysis and risk management giving special emphasis to the neglected period prior to the 20th century. It is hoped that this review will serve to (1) dampen the prevailing tendency to view present-day concerns about risk in an ahistorical context, (2) shed light on the intellectual antecedents of current thinking about risk, (3) clarify how contemporary ideas about risk analysis and societal risk management