The displaced world of risk: risk management as alienated risk (perception?)

During an election campaign in Germany international investors were named “locusts” to discredit their behaviour and the effects of their actions. The purpose of this paper is to elaborate the links of this biblical metaphor and the contemporary financial industry, assuming that the common denominator can be seen in risk and the attitudes in dealing with risk. This link, so it is argued here, can be found in the changes of the understanding of risk as developing from punishment over representing evil to a postsocial opportunity to maximise profit in the globalised world of today.

The paper contrasts the origin of a publicly used metaphor about financial industry to describe risk with risk management based on recent research on the financial industry.

Developments of the international financial markets of the past three decades undermine the common understanding of risk and risk management at least from two directions. The methods used in risk management and investment represent a level of abstraction only specialists can deal with. And – more important for the everyday experience – certain forms of investment and risk management have developed in a way which is threatening to many people in companies producing goods or providing services. The development of financial industry into a postsocial reality of its own nevertheless has intense effects on other sectors of economy and society.

The author calls for an ethics of markets.