Reader response: risk, threat and insurance
24 Jul 2012|

Paul Monk raises an important issue about that slippery word ‘threat’ and its place in defence policy. I don’t think he quite gets it right, but nor do I agree completely with Rod Lyon’s objections. It is an important debate, because it goes right to the foundations of what defence policy is about: if we can’t get this clear, we have little hope of getting the policy itself right. So by way of saying ‘welcome’ to The Strategist, here is my take:

Let’s start with Paul’s basic point, which I think is right. Defence policymakers often assume that the only place to begin is with a threat, to which defence capability then provides a response. That leads to muddle and embarrassment, because often there isn’t a clear threat to respond to, so they find themselves either conjuring one from the air, or deciding we don’t need armed forces after all. In Paul’s nice phrase, ‘hyperbole at one extreme and lazy skepticism at the other’.

The problem of course is that we do not just build forces to deal with evident current threats. We also, and more often, build them to deal with possible future ones. How do we capture that idea of possible future threats? Paul’s solution is to invoke the idea of defence capability as insurance against threats, rather than a direct response to them. It’s a step in the right direction, because it goes a little way towards capturing the idea of future threats that are not yet evident.

But as Rod points out, it doesn’t really solve our problem in identifying threats—just pushes the problem into the future. My way of approaching this problem is a little different. This is going to seem a little semantic, but bear with me. It hinges on the distinction between ‘risk’ and ‘threat’. We often use these words as synonyms, but their meanings are in fact quite different. Look them up in the Little Oxford Dictionary and you will see what I mean. ‘Risk’ means ‘chance of bad consequences’ whereas ‘threat’ means ‘indication of coming evil’.

You can see where this leads. I think defence policy—for a country like Australia—is about risks not threats. That means it is not about responding to dangers we can see today, but about preparing against the possibility that dangers might arise in future.

How does this help? Well it directs our attention to the central importance of identifying risks as the foundation of defence policy. How we do this is way too big a subject for a blog post, so let me just illustrate how it can work by sketching the concept of risk gets us out of the ‘China Threat’ net that entangled the 2009 White Paper. China’s growing power does not threatenAustralia, WP09 could have said, but it does increase Australia’s strategic risks by overturning the US-led order which has been so central to minimizing those risks over the past 40 years.

And of course risk is what insurance is really all about.

Hugh White is professor of strategic studies at ANU and a visiting fellow at the Lowy Institute.