- Elgar original reference
Edited by David Rooney, Greg Hearn and Abraham Ninan
Chapter 4: Risk and Knowledge
Joost van Loon The main question I address here is: to what extent is risk implicated in the specific social, cultural and political formations of the knowledge-based economy (KBE)? Using the example of a dramatic failure of a scientific approach to establish a low-risk and high-return strategy for capital investments, I will argue that risks provide a key function within the KBE. Risks mobilize concerns and investments in particular forms of knowledge which, in a paradoxical spiral, reinforce themselves producing an ever-increasing need for more knowledge, which is the essence of technocracy. This process, however, has a negative counterpart in that it places increasing strains on the interface between the technological/systemic and human/social dimensions of modern life. As a result, systems become increasingly self-referential, a process which can also be referred to as alienation. In order to break through this negative spiral, interventions in the visualization, signification and valorization of risk perceptions are essential. These interventions have to be geared towards increasing the public accountability of the main operators of the KBE (including the risk managers), a radical democratization of decision-making, and an ethical and moral re-embedding of risk politics in terms of the common good. Although current conditions for such interventions are not favourable, the logic of risk is such that every danger brings a saving power.1 In 1973 three scientists, Fischer Black, Myron Scholes and Robert Merton, produced a comprehensive formula known as the Black–Scholes model for predicting successful stock-market investments by including a means for ‘hedging’...
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