Hamish McRae: Living in the shadow of fear

The most insidious form of disruption is the extent to which people are modifying their normal behaviour to try to reduce risk'
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The Independent Online

"The only thing we have to fear," said Franklin Delano Roosevelt famously in his 1933 inaugural address, "is fear itself – nameless, unreasoning, unjustified terror which paralyses needed efforts to convert retreat into advance."

It was a great turn of phrase at a much-needed moment, when the United States' economy was mired in the great depression and lacked the self-confidence to pull itself out. With hindsight, the policies brought in by Roosevelt under the so-called New Deal were less than successful. Britain managed to achieve faster growth than America through the 1930s and, ironically, it was only rearmament in the face of the Nazi threat that finally put the US economy back on its feet.

But now the US – and Britain – faces fear again. The fear now is not, as it was in Roosevelt's day, purely economic, though it is most certainly that too. Nor is it nameless, unreasoning or unjustified. It is very real. New Yorkers are still struggling to adjust to the enormity of what has happened to their city and the personal loss many of them have suffered. Meanwhile, the threat widens. If chemical warfare can strike a seven-month-old child visiting the offices of a TV company it can strike anyone. If anthrax spores could be sent to the office of the leader of the Democrats in the US Senate, they could be sent to any one of us here.

The most obvious manifestation of such fear is disruption. There is, for example, the continuing physical disruption of travel, as airports increase the time needed to search travellers. There will be continuing disruption as sporting events are cancelled and insurance premiums on tall building rise.

But perhaps the most insidious form of disruption is the extent to which people are modifying their normal behaviour to try, often ineffectively, to reduce risk.

Risk is a funny thing. Some people love it. They seek out ways of increasing risk in their lives, doing extreme sports or illegal drugs. Other people shun it. They chose careers or indeed partners that appear low-risk; they try to live in low-risk areas – and they don't smoke.

Both the risk-takers and the risk-avoiders appear to make mistakes because they assess risks wrongly: Americans driving long distances to avoid taking a plane; Britons doing the same to avoid taking a train. Statistically both plane and train are much safer than the car. The explanation is that we feel differently about risks we think we can control and ones that we know we can't. If we drive we think we can control the risk of an accident; if we take a plane we know we can't. That is why terrorism has been so effective.

Looking ahead, there is both good news and bad. We cannot know how many more attacks the terrorists have in store for us or how effective they will be. But the good news is that we do know that human beings adapt with astonishing fortitude.

The best example of this resilience is the way in which Japan has weathered the poison gas attacks on the Tokyo subway in 1995. On the dreadful scale of terrorist-induced misery the toll on human life was mercifully not that high: the sarin gas killed "only" 12 people, though thousands more were injured. But in Japan, that most socially cohesive of nations was an attack on Japanese people by other Japanese, not mad foreigners. And the circumstance of the attack – gassing people trapped in trains underground – was particularly horrible.

Yet people quickly overcame their fear of taking the subway. Japan has, of course, its economic problems but these have nothing to do with the terrorist threat. Japanese people still feel safe using public transport.

New Yorkers, too, will recover their resilience as, gradually, the transport links are restored and economic activity recovers. It is happening now. As far as you can safely generalise, the worry now seems to be more about the economy than of a new terrorist attack.

That leads to the less encouraging news. It is that fear is casting a long shadow over the world economy, a shadow that is, if anything, growing rather than receding. The point has often been made that, in economic terms, the terrorists' blow came at the worst possible time, striking when the world economy was already heading down. Here in Britain, we may escape relatively lightly but globally this will be the biggest hit for a generation – since, in fact, the first oil shock of 1973-4.

Fear is horrible in human terms but it is also dreadful for business. Not only is the world economy more interconnected, more "global", than at any previous stage of human history. It is also more dependent on confidence. Consumers have to be confident to buy; companies have to be confident to invest. The level of disruption is deeply damaging to confidence and I suspect we are still seeing only the early stages of a chain reaction where falling demand will spread globally.

Countries and regions you might think had quite limited links with America are still suffering. Yesterday, the French government, faced with rising unemployment, brought in an economic package to try to boost the economy. The day before, eurozone finance ministers called on the European Central Bank to cut rates. You might imagine the eurozone is a large enough unit to be relatively independent of the US. It self-evidently is not.

So what is to be done?

Obviously, fears have to be allayed in practical ways. Here in Britain, we have great confidence in our armed forces but rather less in some other agencies of government. We have not been very good at patrolling our borders or monitoring the activities of terrorists who have come in. Of course, such controls are difficult in an open, liberal society and it would be dreadful were we to lose the values of such a society. But it would be encouraging to have more confidence that the new anti-terrorist powers will be effective.

We also need to feel confident that specific threats are tackled. The more people can be assured that, say, the government is prepared for anthrax attacks, the more confident we will be going about our daily lives. Rationally, anthrax may not be a large threat but it has surely been an effective one, for the mood in the US is very fragile as a result. Were we subject to similar attacks, our present reasonably robust mood might change and no amount of Cabinet spin would restore it.

Ah, spin. The way to combat fear is to be frank. Go back to Roosevelt. Part of his genius was to spot that fear had to be acknowledged before it could be tackled. The other part was to understand the only people who could fight fear were the citizens of the US. It had to be bottom up, not top down. Another sentence, just after the one quoted above: "In every dark hour of our national life," he said, "a leadership of frankness and vigour has met with that understanding ."

That is remarkably similar to the tone of Queen Elizabeth at Tilbury on the eve of the Armada in 1588: "Let tyrants fear ... I have placed my chiefest strength and safeguard in the loyal hearts and goodwill of my subjects ..."

Both Roosevelt and Elizabeth I had a gift for the sound bite, the ability to craft words that would resonate through history. But they also understood that there had to be a relationship of trust between leaders and citizens. To enable us to banish fear we have to trust. There is a real threat. Sound bites without trust won't do.

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