David Xia.jpgDavid A. Moss’s When All Else Fails is a story of the United States government as the ultimate risk manager. When I first read the subtitle, I had no idea what “risk management” was. It sounded like one of those corporate pieces of jargon that managed to say so little with so much. After seeing dozens of everyday examples, however, I began to understand that risk management is simply the practice of decreasing the probability and magnitude of bad things happening and increasing the chance and degree of good things happening.

Moss gives us a historical narrative of how the government stepped into the private sector to manage risk. These policies encompass Social Security to bank deposit insurance. The book takes the reader through three phases of the U.S. government’s risk management policies: security for businesses (e.g. limited liability), for workers (e.g. Social Security), and for all (e.g. product liability law).

The fifth chapter on bankruptcy was especially illuminating. Readers will discover how America, from its founding, “has long distinguished itself as a nation with a special fondness for debtors.” Some of the original thirteen colonies enacted debtor protection laws as early as 1740s, and the first federal statute, the Bankruptcy Act of 1800, was passed in 1800. The main goal of these policies was to setup a process for nursing down-on-their-luck individuals back into being productive members of society—essentially giving them a fresh start—by shifting risk onto creditors.

In a time of health care reform and proposals to enhance consumer protection, Moss’s book shows us that the government has played and will continue to play an increasing role in all aspects of American life through its risk management policies.

Bio: David Xia is an intern at Guernica. Read his last recommendation here.

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