Planet Money, NPR's excellent blog/podcast on breaking down the economic crisis, led me to this post by Andreas Goeldi. The post is primarily about entrepreneurship, but gets into some interesting points about value systems and motivation in America vs. in Europe.
Andreas attempts to explain some differences he's observed in the spirit of the people in each region and how it affects entrepreneurship, but this point specific to risk aversion was interesting:
But the biggest obstacle for European entrepreneurs is probably the stigma that is still associated with failure. The failure of a company is often seen as a catastrophic event, not (as in the U.S.) an unfortunate, but ultimately useful learning experience. The concept of serial entrepreneurship — starting multiple companies over the course of career, some of which succeed and some of which fail — is completely alien to most Europeans. Many European entrepreneurs have a dynastic view of company creation: A company is something that you start, that you control for the rest of your life and that you want to pass on to your children. That’s great for certain types of companies, but not helpful in rapidly moving markets.
Talk about risk aversion.
When you read some of his points on American's views on entrepreneurship, it makes some of the psychological points that led to the recession pretty clear. It seems like our entire c
onception of risk is to some degree indirect -- we view it completely in numbers, in hedging and mitigating. But if you believe Andreas, there are risks beyond measurable, risks that exist psychologically and sociologically that have a major impact on companies' operations, and even regions' economies.
I wouldn't argue that we should try to measure this -- though I'm sure there's a dashboard out there that does. But there's an interesting high-level discussion to be had about how other kinds of risks -- beyond environmental regulations, overleveraging, or incorrect authorizations -- are considered when conducting business.