In manufacturing risk management, there is this principle called the pyramid of risk. It's an idea that comes from the 30s from a German engineer. For each deadly accident, there are a few accidents in which injury was provoked. And for each incident with no injury, there are some near misses where nothing happens.
Author and consultant Luca Dellanna talks with EconTalk host Russ Roberts about the importance of avoiding ruin when facing risk. Along the way Dellanna makes understandable the arcane concept of ergodicity and shows the importance of avoiding ruin in every day life.