Hedging our bets
Economic models seem to be built around the idea of risk, but it has blind spots when it comes to real danger – environmental collapse, inequality and pandemics. How do we talk about economic risk in an increasingly uncertain world?
Cecilia Rikap is a professor of economics and Head of Research at the UCL Institute for Innovation and Public Purpose. Her research focuses on the economics of innovation, AI-driven geopolitical tensions and digital sovereignty. Johanna Gautier-Morin is a historian and postdoctoral fellow at the Central European University in Vienna and Sciences Po in Paris. She specialises in the history of capitalism and economic knowledge, with a focus on financial markets, economic statistics and the people behind them.
The development of the internet was a venture heavily funded by the US federal government in the 1960s, when the Department of Defence sought a communication technology that could endure a nuclear attack. The Advanced Research Projects Agency was established, and by 1969, it had built a computer network that successfully linked high-speed university computers with government agencies and defence contractors around North America. It wasn’t until 1995 that the internet was freed from government control and its operation passed to private companies.
Discussions of economic risk often invoke the myths of the tech titan, angel investor and entrepeneurial chutzpah. But, as the academics Johanna Gautier-Morin and Cecilia Rikap argue, the fantasy of the risk-taking capitalist no longer fits a world grappling with climate crisis and war. For TANK, Johanna and Cecilia discuss risk’s symbolic potency, economic application, and – ironically – riskiness.
Johanna Gautier-Morin As a historian, I find that the definition of risk constantly evolves. The term is tied to competing societal messaging, including that which surrounds masculinity and genius. From the 1980s up to the 2008 financial crisis, as well as the following decade, we saw the lionising of risk-takers and its associated mythology. I believe we have now passed that moment. Now, the actual risks societies are facing are more related to species extinction, war and climate catastrophe. We need to talk about risk in contemporary capitalism, and not just modern capitalism, because its meaning is fractured now. The traditional mythologies about risk-taking are not holding anymore.
Cecilia Rikap There is a way to see capitalism as a society that lives under constant uncertainty. Nobody knows if they are going to be able to survive or not, because the division of labour means that most people do not know how to do basic things that are fundamental to life. We depend so much on the labour of others that any discussion about risk is also a discussion about how we deal with uncertainty and scarcity of resources. Historically, some schools of thought in economics would say that capitalists deserve to be rewarded with profits because they are risk-takers. The truth is that we are all risk-takers: we are all under constant uncertainty where we don’t know if we are choosing the right path as workers. Today, jobs that one would have thought were highly skilled, like scholars, journalists and so on, are also under threat. There’s a myth that associates risk with the capitalist. That myth has used this false association as an excuse to allow the capture of value created by workers. I once asked a former research and development director at IBM about serendipity, because the economics of innovation argue that a big component in every creative process is related to chance. He said, “Serendipity is something that you plan. The story of the apple falling from the tree and that being a Eureka moment doesn’t happen.” Knowledge is the only product that is also produced with itself: knowledge is produced with knowledge. Knowledge is input, process and output. While you cannot produce a smartphone with a smartphone, in order to produce a new theory, concept, an innovation, we rely on existing theories, concepts and previous innovations. Because of this model, we are constantly generating knowledge. Indeed, even when we are challenging existing ideas, we’re also relying on those prevailing ones and deepening our understanding of them. In this knowledge-building process, there is a risk that the ideas that we develop will not be embraced by others. Innovation is a social relationship that requires others to validate what we’ve developed as new and different. Innovation is not an individual creation. The problem with this kind of risk is that it constantly rewards people like Steve Jobs, Bill Gates, Satya Nadella or the CEOs of other large tech companies. The myth of the single entrepreneur completely neglects the history of how knowledge has always been produced collaboratively. Risk is taken collectively by organisations, as well as by universities, public research organisations and startup companies that are together creating knowledge. But often, only one organisation captures the profits. Society is at major risk, but we tend to see the risk in the wrong way. We think of risk as a matter of putting money out there for something, instead of realising that the real risk is around production: the inequality production engenders and the danger this poses to the planet. These are major risks, but unfortunately, these are not the risks that economics is usually concerned with. When they are being discussed, that conversation comes from those who are very critical of mainstream ideas or from people who don’t have training as an economist. They often follow economic processes and identify things that these guys who are actually trained economists miss.
The myth of the single entrepreneur completely neglects the history of how knowledge has always been produced collaboratively
JGM Indeed, the consequences of risk-taking are actually borne by many people, not just the participants of a specific economic venture. When risk-taking goes wrong, as in the 2008 financial crisis, we don’t have the tools to properly account for the consequences. Our society still relies on a lot of invisible work. Solutions, relations, solidarity and money flows are not always accounted for. During the lockdown in France, the government decided to keep paying wages for families and households, whereas in Italy this wasn’t the case. So how did people survive in cities like Florence that heavily rely on tourism? The way we define production value and economic output in society does not account for this invisible work. This is what current crises are showing more and more. How are Gazans and Ukrainian people actually surviving economically? We don’t have this information because we don’t have the right tools to account for their survival.
CR We need to think about the role of the state when we think about risk. This goes back to the discussion about innovation and how core states with higher budgets and greater resources fund the development of science and technology. Again, we reward Steve Jobs, but without the US government and the military, the internet wouldn’t exist. The challenge is democratising the process of deciding which technologies we want and which ones we don’t, and developing institutions where we can collectively discuss what the priorities are. Unfortunately, we are very far from this scenario. Let me give an example in relation to digital. Governments want digital sovereignty – to have greater capacity to decide what technologies they are developing in their countries and who uses them. This enables governments to think about the purposes of technology, but conversely, they want economic growth. Governments are convinced that these technologies will bring economic growth, even though there are studies saying otherwise. Digital technologies are huge consumers of electricity, water and other resources. When we focus on digital technologies, it might look like they are just flowing in the air, and there is no materiality, pollution or consumption of nature, but in fact, it is the opposite. We are trying to solve the ecological crisis while we are also pushing the development of AI and related technologies. The attempt to reduce the consumption of resources is counteracted by an imperative of growth that blinds governments. The problem is not just about what the risks are and how we conceptualise them, but also about acknowledging that it is impossible to solve them all. We need to make choices and political decisions that some people will disagree with.
JGM Recently, there have been more discussions about de-risking in climate finance. Here, de-risking describes the effort to render the green transition investable by shielding private investors from the financial exposure they refuse to absorb. A lot of private capital is very risk-averse when it comes to funding the green transition. They are willing to take risks to make profits, but they’re not willing to take risks for sustainability. There have been discussions about how to incentivise finance to actually invest in green projects that expose financiers to the risk. We have to actually invest in regions of the world that are constantly under climate stress. Even the World Bank is worrying about this. A decade ago, they were starting to investigate the practice of de-risking positions. Many regions are not accessing capital to invest in their projects, and even less so in green projects.
Still from Hito Steyerl, Mechanical Kurds (2025). Part of Humanity Had the Bullet Go In Through One Ear and Out Through the Other (2025), Hito Steyerl, MAK Contemporary.
Amazon Web Services (AWS), Microsoft Azure and Google Cloud are the world’s biggest cloud servers, accounting for more than 60% of the cloud market in 2025. According to a 2025 report conducted by global security and defence tech company Thales, only 8% of companies encrypt 80% or more of the data they store on the cloud.
CR We also see this kind of de-risking in the “cloud”. All leading corporations are dependent on Amazon, Microsoft and Google clouds. The cloud is insurance in a world that is full of risks: the recent pandemic, future pandemics, geopolitical turmoil, genocide, economic insecurities, et cetera. Even companies like Netflix rely on Amazon’s cloud. When your business is doing well, you harvest more data from users and your supply chain. This means that you pay more for analysing the data used to control your users, clients, customers and franchisees. You end up paying more and more to competing companies, and your business is dependent on technologies that make your business liable to Big Tech. By operating on the cloud, the energy and water that other companies would consume if they had their own datacentres is outsourced to Amazon, Microsoft, and/or Google. In the ecological balance sheet, it is no longer there because they don’t pay the electricity bill with that consumption, only the cloud bill. The entertainment industry is more industrialised and data-driven than ever, and that’s made clear by companies like Netflix [in their repetitive production of highly similar forms of entertainment]. Even the most advanced AI can never go beyond the data used to train it. This means that you can create things that are relatively different, but they will always remain within the same paradigm and mindset. Now that people know what works, they adjust the script so that actors say exactly what makes people remain in front of the screen. It’s not just Netflix – Amazon Prime and all of the other streaming platforms work in a similar way. You can sense the reaction to that in the artistic underground and how people are repurposing digital technologies in art. There’s a book called Public Data Cultures by Jonathan Gray that traces alternative ways of making data more accessible to people. He is interested in how to empower people to access data in ways that are more beneficial to the arts. People are also doing critical work on brain and computer interaction, and thinking about how to develop technologies that are anchored in people’s real needs and co-created with the public that will use them.
JGM There was also a brilliant recent exhibition by Hito Steyerl called Humanity Had the Bullet Go In Through One Ear and Out Through the Other, at MAK Museum, Vienna, where the artist brings together drone footage of Kurdish refugee camps with scenes of digital labour in Mumbai, where workers watch and tag endless hours of video of streets, buildings, objects and moving cars to train artificial intelligence systems. She then overlays the tagging interface onto the footage of the camps, subjecting them to the same classificatory gaze. The work breaks the myth of autonomous technology by showing how AI depends on human labour and conflict.
CR Artists like Steyerl are actually risk-takers because choosing that type of job today, compared to being an AI scientist, is risky. It’s hard to be critical about technology that is supposed to save us from cancer, the ecological crisis and all the problems that we have around us. People who do work characterised by critical engagement, such as journalists in Gaza or elderly activists demonstrating in defence of groups supporting Palestine, are those in the poorest conditions.
JGM There is a lot of financial support today for politicians who target artists, climate activists and democracy in general.
CR In terms of companies themselves, startups are the biggest risk-takers. Most of them never make profits: they either go bankrupt, are acquired or end up as satellites of leading corporations. This idea of risk as the source of profits doesn’t deliver, as the risk-takers end up profiting less.
Slated to launch in summer 2026, Trump Accounts are a US government initiative whereby all children born between December 2024 and January 2029 are eligible to receive $1,000 from the government, deposited into a Trump-branded investment savings account. The US Council of Economic Advisers claims that a Trump Account balance for a baby born in 2026 could be $303,800 if maximum contributions are made; critics have called it a “backdoor to privatising Social Security”.
More and more people are encouraged to put part of their salary into financial markets, creating a mindset where workers are expected to behave like risk-taking investors
JGM If I may add a little aside, in this start-up ecosystem, the risk-taker is most often the entrepreneur’s wife who is sharing the economic burden of the business while performing invisible and unpaid domestic work.
CR Another example of the majority bearing the risk created by a minority are the so-called “Trump Accounts”, which will apparently see around six billion dollars land in American children’s investment accounts. More and more people are encouraged to put part of their salary into financial markets, creating a mindset where workers are expected to behave like risk-taking investors. This has two major effects. Firstly, people begin to accept lower wages because they are told that part of their income will come from financial returns. They accept worse working conditions while companies increase their profits. Secondly, at the financial level, we lose sight of how the sector works. It operates through control without real ownership. You might own a tiny share of a company and your investment may gain or lose value, but only a few actors decide. Major asset managers like State Grid, Vanguard and BlackRock manage the accumulated savings of millions of people. They profit regardless of whether the corporations pay dividends. This type of strategy presents society as becoming more democratic because it seems that everyone can become a financial investor, but it’s the opposite. Everyone is pushed to be a risk-taker, whereas many people may prefer to have a good salary that provides every month without the stress of investing it. This mindset of investing ends up being translated into employers thinking they can pay less and have worse working conditions. AI being added to the picture means that we are outsourcing our capacities to an algorithm that will bring results worse than what humans could do. As long as it more or less delivers, it will be okay because it’s cheaper for companies. In that context, we are just becoming more ignorant. We live in worse conditions and inequalities are expanding. There are some risks that are too urgent, and yet they are delayed by companies and markets. The ecological crisis is the key example. The solution for the crisis comes through democratic ecological planning. Governments are currently working in favour of economic growth, while we see a worsening of development variables, the living conditions of most people and the ecological crisis. We need democratic institutions to allocate our scarce ecological resources, in particular those associated with nature, wisely.