In August I blogged on the divergence in prize money between racing in Ireland and Great Britain. Cental to the post was the arrival of national hunt star Sanctuaire to these shores. Sadly, on Sunday of last week, Sanctuaire was involved in schooling fall after racing at Punchestown. The horse suffered a fractured shoulder and leg and had to be put down.
Sanctuaire's short stay in Ireland was seen as something of a coup for Irish racing but puts the economic concepts of risk and uncertainty and the role of luck into sharp focus. Frank Knight's famous 1921 publication Risk, Uncertainty and Profit explains the difference between risk and uncertainty, giving rise to the idea of Knightian Uncertainty. Knight says that:
"Uncertainty must be taken in a sense radically distinct from the familiar notion of Risk, from which it has never been properly separated.... The essential fact is that 'risk' means in some cases a quantity susceptible of measurement, while at other times it is something distinctly not of this character; and there are far-reaching and crucial differences in the bearings of the phenomena depending on which of the two is really present and operating.... It will appear that a measurable uncertainty, or 'risk' proper, as we shall use the term, is so far different from an unmeasurable one that it is not in effect an uncertainty at all."
Harold Kirk paid £170,000 on behalf of Willie Mullins and Mrs Susannah Ricci to take Sanctuaire to Ireland. The owners were no doubt aware of the risk of such a heavy investment but could not put a measurable value on the chances of a fatal fall on the Punchestown gallops while school. This is uncertainty.
The role of luck, in every sport, is a critical ingredient of success. One can often wonder what might of been had things gone differently (for better or worse) for so many sports stars. Just ask Jonathan Sexton today...