Intro to Risk

Question 1

What is a risk?

Answer 1

”Risk has always two dimensions. It is a threat,
a peril, but it also contains an aspect of
opportunity”
(Ericson and Doyle 2004).

Question 2

How is risk related to the future?

Answer 2

It is decision-making about the future; understanding and controlling what the future is going to be.

Question 3

How is risk a practice?

Answer 3

It is a practice of insurance companies, private companies and public administrations. Risk analysis as a tool to control the future (means/ends), establishing the future in the present.

Question 4

What is the modern understanding of risk?

Answer 4

That we can control them - it is not fate or the whim of Gods (science - calculating risks mathematically).

Question 5

Risk as a decision: risk vs. danger - what is the difference?

Answer 5

We run risks (voluntarily) vs. we are exposed to danger (involuntarily).

Question 6

What is the difference between risk and uncertainty according to Frank Knight & later picked up by Starr?

Answer 6

Frank Knight Risk, Uncertainty and Profit 1921: risk is the ‘known chance’. Uncertainty is the unknown.
Risk = predictability, controllability and therefore calculability
Uncertainty = non-predictability and therefore non-calculability
(In risk you will have some idea about causal relations).

Question 7

Risk as a decision logic: which analytical category is connected with insurance vs. investment?

Answer 7

Utility: economic cost/benefit analysis

Question 8

What is a useful risk indicator for presentations in the business world?

Answer 8

Likelihood vs. impact - can use ‘threat levels’ e.g. colours to illustrate

Question 9

What is political risk?

Answer 9

Everything connected to politics - very broad category.
”…changes in the operating conditions of
foreign enterprises that arise out of the
political process, either directly through
war, insurrection or political violence, or
through changes in government
policies…” (Haufler 1999: 204)

Question 10

How is responsibility related to risk?

Answer 10

Responsibility is a direct consequence of the risks we

run - when we select something as a risk, responsibility is attached to the ‘decision‘

Question 11

What is common for insurance and investment?

Answer 11

Risks as being calculable

Question 12

How is risk beyond ‘normal’?

Answer 12

Risk assessment is a practice that legitimizes action
(defines the need for action).

Both security politics and risk assessment / selection is
about constitution ‘something’ as beyond ‘normal’ or
acceptable.

Question 13

What is the ‘new’ (contemporary) concept of risk?

Answer 13

• Several risk are now
uncontrollable (catastrophic)
• Are not tied to a specific spatial
understanding (primarily the
nation state)?
• Is not possible to determine in
any temporal sense?
• Knowledge of the relationship
between means and effects is
uncertain (undecidable)
• It is not possible to establish
who is responsible?

Question 14

3 Different approaches to risk?

Answer 14

Economic approaches: costs and benefits; likelihood and severity
Sociological and cultural approaches: on society’s role in defining the threats and risk – affecting the
understanding of costs and benefits; defining the need for
political action
Political Risk: an approach or a practice???
(Karen L. Petersen’s ppt.slide - intro p.26)

Question 15

What is political about risk according to the rationalist (economic) approach?

Answer 15

Political risk is the same as ‘country risks’: politics is external to the company.

Question 16

What is political about risk according to M. Douglas et al. (cultural) approach?

Answer 16

Politics is the selection, the priorities and

thereby the construction of something as a risk.

Question 17

What is political about risk according to Beck’s (risk society) approach?

Answer 17

Focuses on the political transformation and the consequences for the idea of risk measurement.

Question 18

What is political about risk according to governmentality approach?

Answer 18

The politics implied in the everyday practices of political steering in modern forms of risk governance; how such practices marginalizes alternative discourses/practices.

Question 19

How do we interact with risk on a daily basis, according to Arnoldi (2009)?

Answer 19

Risks are potential dangers that we are confronted with every day and have to make decisions about. We either accept or reject (take or avoid) risks in our daily decision-making.

Question 20

Arnoldi (2009)’s 3 reasons that risks are social?

Answer 20

1. Risks are social and political problems (risk society - Beck/Giddens).
2. Risks are understood against a social/cultural background (cultural approach - Douglas et al.)
3. Risks is a key concept in various practices and knowledges with which people are governed and society structured (governmentality - inspired by Foucault).

Question 21

When did the contemporary notion of uncertainty tainted risks first emerge?

Answer 21

Late 1960’s - technology linked risks e.g. GM foods, radiation from mobile phones, global warming etc.

Question 22

How is neoliberalism connected to risk?

Answer 22

In approx. late 1960’s many Western societies embraced uncertainty by decreasing welfare state provisions and welcomed neoliberalism, making society more risky. See p.4 Arnoldi (2009).

Question 23

According to Arnoldi (2009), what is the key insight that sociology has delivered about risk?

Answer 23

Risk involves more than an objectively given probability, p.5 Arnoldi (2009).

Question 24

How do we evaluate risks as potential dangers?

Answer 24

It is a value judgement, a selection of risk, a risk acceptability threshold. We judge how serious a risk is based on cultural values, ethics and world views, p.8-9 Arnoldi (2009).

Question 25

Did risk exist before the invention of probability in 1650s?

Answer 25

Yes. Although not formalised and developed calculatively and conceptually, pre-modern humans tried to manage, distribute and diminish risk, p.23-25 Arnoldi (2009).

Question 26

What describes the belief that not all risks can be accurately known, assessed and managed, and that in many cases uncertainty remains?

Answer 26

The precautionary principle: new technologies have unknown side-effects and therefore the burden of proof has shifted from danger to safety.