|Iyov Extreme Risk Management
A consultancy to support Fund Managers, Entrepreneurs and Business Leaders
that are driven to take existential risk
The Theoretical Context in Which We Operate
Risk-Taking in the Crossfire of Positivist and Existentialist Theory
Any debate about risk is in essence a philosophical discussion about certainty, i.e. what human beings can reasonably pretend to know. Western
philosophy to whose wisdom Iyov Extreme Risk Management fully subscribes, is pretty clear in this respect. In its view, the human mind operates
on the basis of impressions, perceptions, logic and dialectical evaluations which are set in a time-space-continuum and whose computations
cannot not resolve the ultimate conundrums of existence. The deliberations of Western philosophy therefore center a good part on the
question of the reasonable acceptability of philosophical judgments to begin with.
Two Schools of Thought
Two main strands of philosophical views have by and large emanated from these explorations which each in their own right still hark back to the
old Aristoteles-Plato-difference (or perhaps even the Protagoras-Sokrates / Nietzsche-Strauss-divide). There is on one hand the
empirical/analytical school of thought which submits that our cerebral activity is the result of an albeit complex psychological and mental
processing of experiences triggered by sensual perceptions. The empirical school hence rejects the notion that any sort a priori faculty of
reasoning might be implanted in the human brain. (Hume, Frege, Freud, Russell, Moore, Wittgenstein, Searle, Churchland et al.) Instead it
places all its hopes for relevant, perhaps even objective intellectual discovery and understanding on the application of a scientific methodology
that is anchored either on the traditional notions of experimental resilience and inductive logic and/or on the newer concepts of contextual
historic comprehension. Obviously, Einstein's discovery of a block spacetime universe has for ever shaken the classical ideas of methodology,
truth, objectivity and reality which the old empirical school held. Nowadays, representatives of the analytical school of thought advocate a myriad
of different approaches towards the ideas of truth, objectivity and reality. These views range from Strawson’s defense of common-sense
concepts as being the most basic primary substance of thought, to Sellars attack on the notion that there must be some cognitive states deep
down in the human thinking that are in direct contact with reality since there would otherwise not be a firm foundation on which the rest of our
knowledge could be built upon, to David Lewis’ claim - inspired by Hume - according to which “all there is to the world is a vast mosaic of local
matters of particular fact, just one little thing and then another.” Obviously there are many more leading thinkers in analytic philosophy that
should have been mentioned here. But our grasp of analytic philosophy is only peripheral which is why our rundown may seem sketchy to a lot of
our informed readers. Nevertheless it is our understanding that the general gist of analytic reasoning tends to translate into rather pragmatist
positions as far as the notion of certainty and truth is concerned. In our observation these positions tend to oscillate between Richard Rorty's
understanding of justified belief (i.e. "don't worry about the Truth if you can get your peers to agree with you"), Crispin Wright's idea of
superassertibility, Thomas Kuhn's notion of the incommensurability of different scientific theories, and Hilary Putnam's unwillingness to as yet
give up all hope that one day some sort of universal truth may eventually be established by the scientific and analytic process. In practice, the
analytical school is hence somewhat split between those researchers who still operate more or less explicitly on the notion of a certain
correspondence/relation between scientifically established conclusions and an external independent reality and those who have pretty much
given up on the idea of correspondence at all. All of them would agree though that science is a communal effort, that competition of rival theories
is welcome, that Ockham´s Razor should be applied and that scientific proposals should come with epistemological humility perhaps in the form
of coherently argued/substantiated conjectures rather than as ideological truths. (Karl Popper)
Different from the empirical, analytical school is a second strand of philosophy whih probably feels that human beings are too desperately lost in
the cosmic universe to operate on the basis of playfully entertained conjectures. (Sartre, Camus). This school of thought which perhaps can
best be labeled as the Rational or Idealistic school of thought therefore suggests that more encompassing theories at least reaching the
level of conviction (if not even faith) must be reasonably possible to give human beings the sort of guidance that would allow them to
embark with confidence on the inherently speculative enterprise that life imposes onto them. It hence comes as no surprise that the Idealistic
school of thought believes that the human mind has in its reasonable and/or intuitive disposition some sort of a (pre-)apprehension of being
("Vorbegriff des Seins" (Heidegger), see also Tillich, Rahner, Buber, Schleiermacher, Bergson etc.) which obviously includes both immanent and
transcendent elements. In other words, followers of this school of thought either tend to argue that the subject-object perception of our mind is
imbued with a deeper notion of unity which lays the ground for some justified hermeneutic speculation into the realm of transcendence
(Gadamer, Strauss, Bloom); or they argue that the fact that the human mind structurally and inherently reaches out to overcome its subject-
object divide is indication enough for us to presume that the supposition of the possibility of such albeit limited hermeneutic outreach into the
realm of transcendence is legitimate and justified. Obviously, there is quite a spread of views in the Rational/Idealistic school as well. They range
from the relatively mild Idealism of an Immanuel Kant (whose views about a fundamentally tainted but not irrelevant human perception of reality
are probably not all that far apart from those later held by Hilary Putnam), to Hegel's invoking of the possibility of “absolute knowing” (DD. VIII,
The Phenomenology of the Spirit), to Heidegger's focus on the (self-revelatory) presence of being in everybody's day-to-day activity, to Adorno's
and Marcuse's subcutaneous dangling with Marxist political philosophy. What is common to the Idealistic school of thought, however, is that it is
anti-relativist and that it rejects the notion of an apolitical, value-free science whose peace-meal empirical approach in its mind contributes little to
resolve the human puzzle.
Perhaps, it is fair to say, that both strands of philosophical schools are much closer to each other today than they were in the 18th and 19th
century. Both schools nowadays have a solid understanding of their own shortcomings; they are hence more open than ever to accepting a
plurality of views as an indispensable ingredient to rational progress; both schools view history and science as an open-ended voyage, and both
schools albeit in varying degrees accept that there is room for an intuitive and heuristic element in the development of scientific and/or
The most important difference we see between both schools pertains to their respective approach towards existential risk and risk-taking. While
the advocates of analytical philosophy tend to exercise their philosophical research from the comfort of a solidly remunerated academic position
and hence have little interest in even addressing the often times excruciating blood, sweat and tears that is required to convince the market
(and/or your peers) of the superiority of your proposal, the Idealstic/Rational school at least understands that the entire existence of the human
being is called upon both when conceiving a new proposal and when (successfully?) marketing the latter. And while the analytical school is quite
happy to relegate the bulk of questions relating to existential doubt, fear of failure, all-in risk-taking and emotional turmoil to the purview of
psychological therapy where the latter then gets treated from the point of view of possible mental illness, the Idealistic School at least opens the
door to the notion of a reasonable rational faith that can carry the afflicted innovator through the dire straits of the inevitable initial market
rejection. (See, for instance, the powerful and most noteworthy work of Viktor Frankl in this respect). .
In other words, Iyov Extreme Risk Management (IERM) sees an important phenomenological difference between:
- a justified pragmatist belief that bases all its hopes for success on individual marketing skills (Rorty) and
- a rational faith in universal reason which can still trusts that superior conclusions will eventually impose themselves in the
marketplace through the sheer quality of their analysis rather than through the excellent packaging and selling skills of
Or to put it even differently, we believe that there is a prospect of conviction in the rational school that can keep thinkers/innovators
going even in the most abject of (initial) peer rejection where the analytical school with its country-club conjectures and
warranted assertibilities has long thrown in the towel.
This is why Iyov Extreme Risk Management (IERM) believes that the rational school philosophy ultimately offers a better theoretical refuge to the
lost and lonely entrepreneur than the analytical school does. Obviously, IERM is aware of the hard-to-explain, perhaps mystical, a priori element
that underlies any rationalist school approach. And IERM is also cognizant of the fact that such mysticism can pose a serious threat to social
peace and the mental stability of the individual. Some fine forensic philosophizing is hence needed to get the balance between inter-subjectivity,
reason and revelation right. We hope that our framing of the pertaining issue does make it clear to the informed reader that Iyov Extreme Risk
Management's idea of the balance between reason and transcendence is much closer to that of Immanuel Kant than to that of, say, Eric
Any forensic analysis of the reason-revelation-dichotomy must however also recognize that some hard-to-fathom, intuitive element is at work
when empirical school researches (explicitly or not) use their originality, prowess and imagination to formulate a new theoretic hypothesis that
nobody before managed to uncover quite like that. The presence of unexpected realizations here and there is therefore difficult to deny. And this
in itself should not worry us too much as long as those who explore the impulse of such hard to explain platonic realizations are willing and
prepared to subject their ensuing theories to the explicit and often times chaotic criticism of the community.
So, let us repeat: While we recognize the enormous contributions which the empirical and analytical school makes and has made to social and
technological progress and risk-mitigation, IERM views the latter only as the second best option to address the needs of innovators.
Don't forget that innovators, - especially those of the disruptive kind -, are all about risk-taking. That is true even if their offering itself aims at
providing a risk-mitigating solution. So while these game-changers often need to take contrarian, sometimes common sense defying
speculative stances, to develop their ground-breaking solutions, the corresponding philosophy cannot hide itself behind a
comfortable positivist common sense wisdom. Much rather should it take its own rational risks too, in order to give these innovators the
best philosophical framework available to them.
Benchmarks for Soundness of Existentialist Theories
Condoning existential faith and risk taking however does not mean that any arbitrary scheme of grandiosity must be considered as reasonable.
Instead serious efforts must be undertaken to make sure that any existential risk-taking, based on belief is not altogether unreasonable and
therefore unjustified. In this respect, we believe that the works of Karl Jaspers, and Karl Popper among others provide valuable clues as to how
to elevate a strongly-held conviction to the level of philosophical soundness and reasonable inter-subjectivity. As a matter of fact the
aforementioned thinkers have set forth a number of criteria and imperatives that Idealistic convictions must meet to take them to the level of
relevance, noteworthiness, rationality, justification and soundness. These imperatives and criteria which grant the status of rational
trustworthiness are the following:
- The conviction/faith/speculation must be cognizant of its shortcomings and flip-sides.
- The existential conviction/faith/speculation must strive for logical internal consistency.
- The conviction/faith/speculation must be intelligible and it must communicate itself to others. Positions that operate on the notion that belief
is the basis of understanding are hence unacceptable.
- The conviction holder must be prepared and willing to accept his doubts about the validity of his view and must review the basis of his
assumptions in an honest and more or less constant manner.
- The speculative conclusion/faith/conviction must have been reached after an extensive study and immersion into the canon of views and
opposing views historically and currently prevalent in the field that the pertaining conclusion/faith/conviction corresponds to.
- The speculative conclusion/faith/conviction must accept the often times chaotic chorus of critique by experts in the relevant field as a
constitutional element of scientific consensus building, social opinion forming and social decision-making. It also must evolve with and take
into account the predominant views that emerge out of the pertaining chorus of critique.
- The conviction holder needs to accept and understand that all speculative reasoning is by definition an open ended process that can
easily be described with Karl Jaspers as a perennial philosophy.
These criteria and imperatives inspire the core of the hermeneutic service that Iyov Extreme Risk Management offers to extreme risk takers. We
believe that meeting these criteria will provide extreme risk takers with a sound path to achieve a reasonable completion of their project.
Accepting these benchmarks constitutes a solid bulwark against the possible aberrations of a pathological narcissism that can
drive people into mistaken fantasies of grandiosity. They help extreme risk takers not to fall victim of their own stubbornness. And they
adequately de-construct the inherent danger of the otherwise rather common “I hate negativity”- approach which more often than not tends to be
the proselytizing hallmark of your average Shark Tank pioneer.
Iyov Extreme Risk Management believes that the need to embrace a speculative approach imposes itself especially in societies with
turbo-dynamic market economies whose rapidly changing environment challenges yesterday’s apparent certainties with
breathtaking speed. Unless people are independently wealthy and can afford a Schopenhauer approach of minimal pro-activity, they will have
to take risks to deal with these rapid changes. And sometimes this risk-taking can and will be of an existential nature. In view of that Iyov Extreme
Risk Management is in the market to offer its contribution to make sure that such risk taking continues to be sound.
Constructive versus Destructive Narcissism
Obviously the ever present danger of a potentially pathological narcissism requires additional clarification. In our mind, there can be no doubt
that there is a serious element of narcissism in any desire to excel. This is also true in a super competitive market environment which basically
forces its participants to excel in order to gain a somewhat comfortable life. Naturally, there is a point where narcissism stops being a driver of
constructive evolution and where it turns into a destructive force.
Conventional wisdom usually has it that this point is reached when the desire for personal glory and success reaches a level where subject
ambition endangers the life and health of the narcissist agent or anybody else involved with his glory seeking undertaking. If this broad brush
definition were true, however, we would have to label people such as Christopher Columbus, Reinhold Messner, Martin Luther King and
others whose contributions to the evolution of mankind are without any doubt as pathological narcissist since their undertaking clearly put not
only themselves but also others into a serious health risk. Such a broad brush definition of the tipping point based on health concerns hence
needs additional fine-tuning.
Now some people, recognizing the need for further clarification of the inflection point between good and bad narcissism, may be tempted to
argue that ultimately the success or failure of the pertaining, glory seeking enterprise in the marketplace will determine whether the underlying
narcissism was a predominantly constructive or destructive one. If that were an adequate measure however the most awful dictators of the 20th
century would at some point have had to be considered a non-pathological actor since they were clearly revered and celebrated for a while by a
vast number of the population. Success in and out of itself is hence not a viable yardstick to measure the soundness of a narcissistic ambition.
Lasting success and recognition at the same time that transcends the lifetime of the glory seeker may well be just that. Alas, this criterion does
not help anyone in his current enterprise to determine whether his undertaking is of a non-pathological or pathological kind. For that he or she
will need a different yardstick. And we believe that the Jaspers/Popper standards enunciated above are the only tool insight that can offer any
sort of certainty in this respect. So if you are not ready to accept your doubts, if you cannot deal with a constructive criticism of your convictions,
and if you are not willing to communicate the complexity of your emotions you may well be on an unreasonable track. This is even the case if
your “I hate negativity”- approach may have produced some market success. Don’t forget that success itself is, as we have said earlier, not
necessarily a sign of soundness and constructive narcissism. So, if you have your doubts in this respect feel free to contact us. We will help you
to figure out the conundrum that’s pestering you.