Slide 1

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 2

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 3

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 4

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 5

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 6

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 7

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 8

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 9

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 10

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 11

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 12

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 13

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 14

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 15

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 16

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 17

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 18

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 19

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 20

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 21

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 22

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 23

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 24

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 25

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 26

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 27

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!


Slide 28

From risk to opportunity
Lecture 4

John Hey and Carmen Pasca

The organisation of today’s lecture

• We start with a 15-minute summary from a
documentary on the famous trilogy The Matrix.
• Then a lecture on the philosophers’ approach to
risk.
• We will finish with a 45 minute Cambridge Union
style debate (or a discussion) on the motion
“This House Believes that there are no
certainties”
• You should watch the whole documentary later.

Lecture 4 Philosophical approaches to risk: Overview
• This lecture examines the work of the key
philosophers during the modern and contemporary
periods who wrote about risk: Descartes, Rousseau
and Rawls.
• Philosophical ideas include dealing with: cause and
effect; uncertain knowledge; defining human values;
measuring values; experts; the role of science in
society; the role of judgment in human affairs.

Lecture 4 Philosophical approaches to risk: Descartes
• Descartes built the paradigm of risk on the
philosophical concept of doubt and developed from
this concept the ideas of certainty and uncertainty.
• In the Passions of the Soul (1649) he argued about
expectancy and fear: expectancy of success and fear
of failure (Art. 165. Expectancy and fear).
• When expectancy is so strong, said Descartes, she
eliminates the fear entirely. It changes its nature and
is called security or insurance. (Art.166. security and
hopelessness ).

Lecture 4 Philosophical approaches to risk: Descartes and doubt

• Descartes: the act of doubt (1596-1650).
• Descartes’ suggestion that to know what is true, and only
what is true, we should try to doubt everything we believe.
• That which can be doubted is not necessarily false, but that
which cannot be doubted must be true.
• In his first published work, the Discourse on the Method of
Rightly Conducting the Reason and Seeking for Truth in the
Sciences (1637), Descartes applied this method of doubt to
his own beliefs and arrived at a very important (and
famous) result, summarised in the phrase usually
translated as “I think, therefore I am.”

Lecture 4 Philosophical approaches to risk: Descartes and certainty

• René Descartes wanted to found philosophy and all
the sciences on clear and distinct ideas.
• For Descartes, the clarity of an idea was a sign of its
truth, and he developed a method called the method
of doubt.
• Certainty, according to Descartes, is the absence of
doubt.

Lecture 4 Philosophical approaches to risk: certainty and doubt

• By methodological doubt, Descartes began inventing
a certainty, a bedrock (foundation) of certainty.
• He doubted all of things, included all sensorial data:
“I can doubt anything, but that I doubt anything
cannot be doubted”.
• Extremely, if you try to say “I doubt that I exist”, in
fact it can be proved that you do exist.
• In brief, Descartes found the bedrock of certainty in
the mind, and discovered its innate ideas: self,
identity, substance, and even God.

Lecture 4 Philosophical approaches to risk: Rousseau
• For Rousseau, risk depended on the consequences of
things.
• In Nouvelle Héloise he said: “being aware of the risks
we incur certainly allows us to project, and to
anticipate, but is also a barrier to action, because the
risk always involves a form of unconsciousness”.
• We pass to the act without regard for all the
consequences.

Lecture 4 Philosophical approaches to risk: Rousseau
• The philosopher argued about both concepts of risk
and experience of risk.
• According to Rousseau , the experience of risk is the
experience of not knowing what we do not know,
uncertainty about the uncertainty.
• “Every man has the right to risk his own life in order
to preserve it”.

Lecture 4 Philosophical approaches to risk: Humans and animals

• His treatise built upon a fundamental distinction
between two types of living beings: humans and
animals. Human beings are animals in the eyes of
Rousseau, but clearly animals of certain kind.
• For Rousseau humans are distinct from animals by
their ability to do harm to each other.
• Human beings are among other things beings that hold
the capacity and the ethical burden of understanding
themselves as situation in time, an understanding of
time as an horizon of multiple choices and outcomes.

Lecture 4 Philosophical approaches to risk: Descartes and the future

• The uncertainty : it is first a constant awareness of
the uncertainty of the future, of not knowing what
will happen, what will be the product or outcome of
our choices.
• Humans do not see the future as fact, as reality or
truth. The future is not a fact or set of facts around
which we orient ourselves today in the here and
now. It is a horizon of possibilities.

Lecture 4 Philosophical approaches to risk: Rousseau and experience of risk

• To Rousseau's list of characteristic differences
between humans and animals must be added the
experience of risk.
• For Rousseau the scene of the experience of risk is
Nature .
• It derives from the reality of what we commonly call
the “laws” of nature.

Lecture 4: Philosophical approaches to risk: Rousseau and ethics

• As there is no risk in nature (according to Rousseau),
there is no risk in the lives of animals.
• Risk is not only a physical necessity, but also it
derives from the reality of what we commonly call
the “laws” of nature.
• In Rousseau’s approach to risk we find also the
ethical dimension: risk is an ethical necessity, in that
both the concept of risk and the experience of risk as
ethical are unavoidable parts of human self
understanding.

Lecture 4 Philosophical approaches to risk Rawls
• The bridge between the modern philosophical
concept of risk and that of the contemporary
approach has both an ethical and an economic
perspective .
• In John Rawls’ Theory of Justice, risk becomes
normative.
• According to Rawls, risk is expressed through the veil
of ignorance in the context of the original position.

Lecture 4 Philosophical approaches to risk: the veil of ignorance

• In the original position, behind the veil of ignorance,
one is denied any particular knowledge of one’s
circumstances, such as one’s gender, race, particular
talents or disabilities, one’s age, social status, one’s
particular concept of what makes for a good life, or
the particular state of the society in which one lives.
• Persons are however assumed to be rational (in a
particular Rawlsian sense*) and disinterested in
others’ well-being.
• *wanting to make as good as possible the worst thing that can happen to
them.

Lecture 4 Philosophical approaches to risk: Rawls’ Principles of Justice

• The principles that follows from the proposition that
people in the Original Position, behind the Veil of
Ignorance, would choose to regulate a society at the
most basic level (that is, prior even to a Constitution)
are called by Rawls, the “Two Principles of Justice”.
(see later).
• These two principles determine the distribution of
both civil liberties and social and economic goods.

Lecture 4 Philosophical approaches to risk: The first principle

• The First Principle states that each person in a
society is to have as much basic liberty as possible,
as long as everyone is granted the same liberties.
• That is, there is to be as much civil liberty as possible
as long as these goods are distributed equally.
• This would, for example, preclude a scenario under
which there was a greater aggregate of civil liberties
than under an alternative scenario, but under which
such liberties were not distributed equally amongst
citizens.

Lecture 4 Philosophical approaches to risk: The second principle

• The Second Principle states that while social and
economic inequalities can be just, they must be
available to everyone equally (that is, no one is to be
on principle denied access to greater economic
advantage) and such inequalities must be to the
advantage of everyone.
• (So one person can choose not to work and hence be
poor while another person chooses to work and
hence be rich: there are inequalities but people are
happy – in the sense that they have chosen them.)

Lecture 4 Philosophical approaches to risk: The difference principle

• The method of the original position supports this
second principle, referred to as the Difference
Principle, because when we are behind the veil of
ignorance, and therefore do not know what our
situation in society will be once the veil of ignorance
is lifted, we will only accept principles that will be to
our advantage even if we end up in the least
advantaged position in society.

Lecture 4 Philosophical approaches to risk: Rationality
• Describing the parties' choice as a rational choice
subject to the reasonable constraints imposed by the
original position allows Rawls to invoke the theory of
rational choice and decision under conditions of
uncertainty.
• In rational choice theory there are a number of
potential “strategies” or rules of choice that are
more or less reliably used depending on the
circumstances.

Lecture 4 Philosophical approaches to risk: Social Justice

• Possible criteria of social justice:
• “Maximin”: directs that we play it as safe as possible
by choosing the alternative whose worst outcome
leaves us better off than the worst outcome of all
other alternatives. An alternative aim is to “maximise
the minimum” regret or loss to well-being.
• “Maximax”: we should “maximise the maximum”
potential gain and choose the alternative whose best
outcome leaves us better off than all other
alternatives

Lecture 4: Philosophical approaches to risk
• Rawls denies that the parties have a psychological
disposition to risk-aversion.
• He argues however that it is rational to choose as if
one were risk averse under the highly exceptional
circumstances of the original position.
• Indeed, in the extreme position of the Veil of
Ignorance, it is reasonable to portray people as being
extremely risk-averse – perhaps as Maximiners deciding on an option which makes the worst that
can happen as good as possible.

Lecture 4 Philosophical approaches to risk: Contempory thoughts

• The philosophical approach to risk in today’s society
is strongly influenced by the complexity and the
flexibility of lifestyles.
• The greater diversity of the whole social life erodes
the certainty with which people can map out their
futures.
• Risk and uncertainty have emerged as central
themes.

Lecture 4 Philosophical Approaches to risk: Conclusion
• Early philosophers did not try to quantify risk but
merely to classify situations of certainty, risk,
uncertainty and doubt.
• Later philosophers tried to distinguish between
objective and subjective risks.
• Rawls, rather than try and quantify risk, specified
how people should react to uncertain situations.
• In contrast, Sen argued that we should take into
account differences in risk attitude.

Lecture 4 Philosophical Approaches to risk
• To finish this lecture, as you know, we suggested a
short Cambridge Union style debate :
• “This House Believes that there are no certainties”
• We have called for 2 volunteers to speak on each
side. Are there any? The rules are: one speaks for,
one against, one for, one against. Five minutes for
each speaker.Then we open it up to the floor.
• If we have no volunteers we will have instead a
discussion.

Lecture 4

• Goodbye!