Abstract
This chapter aims to introduce the reader to the concept of risk in its widest sense and to demonstrate—through a critical engagement with risk and uncertainty—that ‘looking through a risk lens’ at actors and competing organisational and societal realities, that is, the risk triangle, provides us with a powerful analytical tool to unpack the political of economy of risk. The chapter, therefore, provides both a useful reference point and a framework to reflect on—and to critically evaluate—the contemporary political economy.
Compulsory disclaimer: the analysis, opinions, and conclusions expressed or implied in this chapter are those of the author and do not necessarily represent the views of the Joint Services Command and Staff College (JSCSC), the UK Ministry of Defence (MOD) or any other government agency.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Similar content being viewed by others
Notes
- 1.
- 2.
See also Giddens (1999).
- 3.
See also Smith (2004: 315).
- 4.
- 5.
See also Beck (1999: 3).
- 6.
For the continued relevance of Knight’s argument, see Nelson and Katzenstein (2014).
- 7.
Arguably, ‘risk as threat’ is conceptually confusing: threats are not risks; threats are risks that have materialised, that is, they exist and they are therefore not a function of the future anymore (Schelhase 2014: 47).
- 8.
Compare Ewald (1991: 199).
- 9.
- 10.
Compare also Knight’s ([1921] 2006: 247–252) discussion of insurance as a means to deal with risk.
- 11.
As a result of a European Court of Justice ruling, in the European Union gender can no longer be used by insurance companies as a criterion to calculate premiums (Insley and Jones 2011).
- 12.
- 13.
- 14.
It is important to note here that, for Beck, the result of the dynamics inherent in the risk society is a new cosmopolitanism (Beck 1999).
- 15.
An interesting and relatively early publication in this regard is the report published by the former Strategy Unit in the UK’s Cabinet Office. It acknowledges the ‘risk society thesis’ and sets out a cross-governmental strategy on how to manage risk and uncertainty (Cabinet Office 2002).
- 16.
See, for example, Bessis (2010).
- 17.
It is, in fact, questionable that we could ever manage to amass enough information about, for example, financial markets—and first and foremost, who decides what is considered enough—but also to what extent could all this information actually be used by market actors? For this argument, see Best (2010).
- 18.
See also De Goede (2005: 141–143).
- 19.
- 20.
In relation to the UK housing market, see the Financial Conduct Authority’s Mortgage Market Review (MMR), which came into effect on 26 April 2014 with the overall aim of reforming the mortgage market through tighter regulation, for example, assessing applicants’ lifestyle and spending patterns in detail and stress testing applicants’ budgets against future interest rate rises (see: http://www.fsa.gov.uk/about/what/mmr, accessed 15 March 2018). The anticipated impact of the MMR in terms of damping house price growth so far seems to be very limited, with annual house price inflation in England running at 10.4% (ONS 2015).
- 21.
For Luhmann, the important distinction is that between risk and danger. Risk, in this case, is linked to decision-making, whereas danger is something that we do not relate to our own decisions ([1993] 2002: 23–24).
- 22.
For more details on the ‘help to buy’ scheme see: ‘Help to Buy’ (https://www.helptobuy.gov.uk, accessed 15 March 2018).
- 23.
For the quote, see Nakamoto and Wighton (2007).
- 24.
I am grateful to one of my interviewees for pointing this out to me.
References
Adams, John. 1995. Risk. London/New York: Routledge.
———. 2003. Risk and Morality: Three Framing Devices. In Risk and Morality, ed. Richard V. Ericson and Aaron Doyle, 87–104. Toronto: University of Toronto Press.
Aradau, Claudia, and Rens van Munster. 2007. Governing Terrorism Through Risk: Taking Precautions, (Un)Knowing the Future. European Journal of International Relations 13 (1): 89–115.
van Asselt, Marjorlein B.A., and Ortwin Renn. 2011. Risk governance. Journal of Risk Research 14 (4): 431–449.
Beck, Ulrich. 1992. Risk Society—Towards a New Modernity. London/Thousand Oaks/New Delhi/Singapore: Sage Publications.
———. 1999. World Risk Society. Cambridge, MA/Malden: Polity Press.
Bernstein, Peter L. 1996. Against the Gods—The Remarkable Story of Risk. New York: John Wiley & Sons, Inc.
Bessis, Joël. 2010. Risk Management in Banking. 3rd ed. Chichester: John Wiley & Sons Ltd.
Best, Jacqueline. 2010. The Limits of Financial Risk Management: Or What We Didn’t Learn from the Asian Crisis. New Political Economy 15 (1): 29–49.
Cabinet Office. 2002. Risk: Improving Government’s Capability to Handle Risk and Uncertainty. London: Cabinet Office.
Dannreuther, Charles, and Oliver Kessler. 2017. Racialised Futures: On Risk, Race and Finance. Millennium: Journal of International Studies 45 (3): 356–379.
Dannreuther, Charlie, and Rohit Lekhi. 2000. Globalization and the Political Economy of Risk. Review of International Political Economy 7 (4): 574–594.
De Goede, Marieke. 2005. Virtue, Fortune and Faith—A Genealogy of Finance. Minneapolis/London: University of Minnesota Press.
Dean, Mitchell. 2010. Governmentality—Power and Rule in Modern Society. 2nd ed. Los Angeles/London/New Delhi/Singapore/Washington, DC: Sage.
Dickinson, Gerry. 2001. Insurance Finds a Blend of Innovation and Tradition. In Mastering Risk—Volume 1: Concepts, ed. James Pickford, 195–201. Harlow: Pearson Education.
Douglas, Mary, and Aaron Wildavsky. 1983. Risk and Culture. Berkeley/Los Angeles/London: University of California Press.
Ericson, Richard V. 2006. Ten Uncertainties of Risk-Management Approaches to Security. Canadian Journal of Criminology and Criminal Justice 48 (3): 345–357.
Ericson, Richard V., and Aaron Doyle. 2004a. Catastrophe Risk, Insurance and Terrorism. Economy and Society 33 (2): 135–173.
———. 2004b. Uncertain Business—Risk, Insurance and the Limits of Knowledge. Toronto/Buffalo/London: University of Toronto Press.
Ericson, Richard V., Aaron Doyle, and Dean Barry. 2003. Insurance as Governance. Toronto/Buffalo/London: University of Toronto Press.
Ewald, François. 1991. Insurance and Risk. In The Foucault Effect—Studies in Governmentality, ed. Graham Burchill, Colin Gordon, and Peter Miller, 197–210. Chicago: The University of Chicago Press.
Financial Conduct Authority. Mortgage Market Review. Available from: http://www.fsa.gov.uk/about/what/mmr. Accessed 15 Mar 2018.
Foucault, Michel. 1991. Governmentality. In The Foucault Effect—Studies in Governmentality, ed. Graham Burchill, Colin Gordon, and Peter Miller, 87–104. Chicago: The University of Chicago Press.
Giddens, Anthony. 1999. Risk and Responsibility. Modern Law Review 62 (1): 1–10.
HM Government. Help to Buy. Available from: https://www.helptobuy.gov.uk. Accessed 15 Mar 2018.
Insley, Jill, and Rupert Jones. 2011. ECJ Gender Ruling Hits Insurance Cost. The Guardian, March 1 [online edition].
International Risk Governance Center. 2017. Introduction to the IRGC Risk Governance Framework, revised version. Lausanne: EPFL International Risk Governance Center.
Knight, Frank H. [1921] 2006. Risk, Uncertainty and Profit. Mineola: Dover Publications.
Lobo-Guerrero, Luis. 2011. Insuring Security—Biopolitics, Security and Risk. Abingdon/New York: Routledge.
Lockwood, Erin. 2015. Predicting the Unpredictable: Value-at-Risk, Performativity, and the Politics of Financial Uncertainty. Review of International Political Economy 22 (4): 719–756.
Luhmann, Niklas. [1993] 2002. Risk—A Sociological Theory. New Brunswick/London: Aldine Transaction.
Lupton, Deborah. 2013. Risk. 2nd ed. Abingdon/New York: Routledge.
Nakamoto, Michiyo, and David Wighton. 2007. Citigroup Chief Stays Bullish on Buy-Outs. Financial Times, July 9 [online edition].
Nelson, Stephen C., and Peter J. Katzenstein. 2014. Uncertainty, Risk, and the Financial Crisis of 2008. International Organization 68 (2): 361–392.
Nesvetailova, Anastasia. 2015. A Crisis of the Overcrowded Future: Shadow Banking and the Political Economy of Financial Innovation. New Political Economy 20 (3): 431–453.
O’Malley, Pat. 2004. Risk, Uncertainty and Government. London/Sydney/Portland: Glasshouse Press.
———. 2008. Governmentality and Risk. In Social Theories of Risk and Uncertainty, ed. Jens O. Zinn, 52–75. Malden/Oxford/Victoria: Blackwell Publishing.
Office for National Statistics. 2015. House Price Index, November 2014. Published January 13.
Paudyn, Bartholomew. 2013. Credit Rating Agencies and the Sovereign Debt Crisis: Performing the Politics of Creditworthiness Through Risk and Uncertainty. Review of International Political Economy 20 (4): 788–818.
Power, Michael. 1999. The Audit Society—Rituals of Verification. Oxford: Oxford University Press.
———. 2004. The Risk Management of Everything—Rethinking the Politics of Uncertainty. London: Demos.
———. 2007. Organized Uncertainty: Designing a World of Risk Management. Oxford: Oxford University Press.
Renn, Ortwin. 2008. Risk Governance—Coping with Uncertainty in a Complex World. London: Earthscan.
Royal Society. 1992. Risk: Analysis, Perception and Management. London: Royal Society.
Schelhase, Marc. 2014. Realities of Conflict: Risk and Military Decision-Makers. The RUSI Journal 159 (2): 44–51.
Sinclair, Timothy. 2010. Round Up the Usual Suspects: Blame and the Subprime Crisis. New Political Economy 15 (1): 91–107.
Slovic, Paul. 1998. Perception of Risk. In The Earthscan Reader in Risk and Modern Society, ed. Ragnar Löfstedt and Lynn Frewer. London/Sterling: Earthscan.
Smith, Martin J. 2004. Mad Cows and Mad Money: Problems of Risk in the Making and Understanding of Policy. British Journal of Politics and International Relations 6 (3): 312–332.
Stirling, Andrew. 1998. Risk at a Turning Point? Journal of Risk Research 1 (2): 97–109.
Tulloch, John. 2008. Culture and Risk. In Social Theories of Risk and Uncertainty, ed. Jens O. Zinn, 138–167. Malden/Oxford/Victoria: Blackwell Publishing.
Valencia, Matthew. 2010. The Gods Strike Back—A Special Report on Financial Risk. The Economist, 1–14, February 13.
Vaughan, Diane. 2005. Organizational Rituals of Risk and Error. In Organizational Encounters with Risk, ed. Bridget Hutter and Michael Power, 33–66. Cambridge: Cambridge University Press.
Watson, Matthew. 2009. Boom and Crash: The Politics of Individual Subject Creation in the Most Recent British House Price Bubble. In The Politics of Housing Booms and Busts, ed. Herman M. Schwartz and Leonard Seabrooke, 52–75. Houndmills/Basingstoke, Hampshire: Palgrave Macmillan.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Copyright information
© 2019 The Author(s)
About this chapter
Cite this chapter
Schelhase, M. (2019). Risk. In: Shaw, T.M., Mahrenbach, L.C., Modi, R., Yi-chong, X. (eds) The Palgrave Handbook of Contemporary International Political Economy. Palgrave Handbooks in IPE. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-45443-0_21
Download citation
DOI: https://doi.org/10.1057/978-1-137-45443-0_21
Published:
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-137-45442-3
Online ISBN: 978-1-137-45443-0
eBook Packages: Political Science and International StudiesPolitical Science and International Studies (R0)