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The Actuary The magazine of the Institute & Faculty of Actuaries

Book review: The Price of Fish

Tony Brooke-Taylor gets to grips with Michael Mainelli and Ian Harris's analysis of 'wicked problems', and finds as many questions as answers

TITLE: The Price of Fish : A New Approach to Wicked Economics and Better Decisions
PUBLISHER: Nicholas Brealey Publishing
ISBN: 10: 1857885716
RRP: £20

This is not so much a book as the distillation of a series of lectures that the authors have delivered in the course of their work: helping organisations make sense of decisions that require long-term thinking.

The price of fish – as distinct from the title of this book – illustrates the imbalance between the scarcity of (natural) resources and the demand for these resources. This is an example of a ‘wicked’ problem. Very loosely, this is a problem involving: multiple stakeholders with different views of the world; changing constraints; and no definitive way to define the problem.

Wicked problems are often connected with economic, social or environmental concerns, such as over-fishing, but we would all recognise similar problems in business and investment strategy. Aspects particularly relevant to the actuarial profession include discounting of uncertain future events, demographics and even the time value of money itself.

The book describes some of the problems society faces today in an objective way, but I am sure it would provide lots of debating points for anyone concerned with over-consumption or unfair allocation of global resources, or with the impact of human consumption on the environment. I guess the fact that many people do not think that these are even problems illustrates their ‘wickedness’.

The book’s main purpose, however, is to propose a framework for making decisions in light of these problems. The framework combines four concepts: choice, economics, systems and evolution. Each of these is introduced in turn with a dedicated section, while an end-to-end reading of the book sees the concepts being woven together as each new one is introduced.

I wanted to approach this book as an end-to-end read: the sub-title does suggest this might be a good strategy. Having done so, though, I feel that the book would be more useful as a reference tool.

Within each section, many ideas from many disciplines are used either directly or by analogy. There is so much detail that it would be futile to share some examples here. But across the four concepts, one point keeps emerging: trying to understand human behaviour using science derived from closed physical systems does not work. Nevertheless, many of the ideas covered should be recognisable to those of us with more classically scientific backgrounds.

Even this review presented itself as a wicked problem. I needed to read around the subject even to be able to decide how to review the book. I’d therefore recommend an initial skim-read of the book, which should then be retained as a focal point for reference. However, its main value is as an inspiration to explore some of the ideas it presents – either to apply them to a specific problem or purely out of curiosity.

The book does not provide any real answer to global society’s most important challenges – nor does it claim to. However, it does leave the reader much better-equipped to understand what the question is.

Tony Brooke-Taylor is the general insurance risk director at Aviva and a member of the Actuarial Profession’s resource and environment member interest group