Who Defines The Risk?

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Read a piece this morning in Le Monde (http://abonnes.lemonde.fr/idees/article/2011/11/17/un-delitement-politique_1605382_3232.html) by the French philosopher Yves Charles Zarka. He writes about the failure of the governments in the EU to lead during the current crisis and notes that Europe stands at a moment of profound crisis. This is not a new idea, of course, but it is interesting to note his take on how the state has become not the definer of society’s financial institutions but their servants. He notes the irony that the very agencies that missed the sub-prime mess are now threatening governments and thus forcing them into a further crisis, whose origins are the failure of the ratings agencies.

One wonders then, especially when one looks at Asia, at this relationship between state and so-called free economic agents. This is important of course since risk itself is defined often as “the possibility of more than one outcome.” If that is the case, then the major issue is who is allowed to define what those outcomes are? The state, as was traditionally the goal in post-war Europe? The markets, as was traditionally the goal in post-war US? It seems to me that this is the major issue at hand in the West now: who really defines the extent of the risks businesses and individuals are allowed to take? The West sees those outcomes as opposed. In Asia, they often live quite calmly side by side (see Japan in the 80’s especially and Singapore now).  I wonder if the West too will find some balance or if we are to spend the next decade arguing between which if those two ideals (European and American) — both discredited and bankrupt in practice now — is the one to which we should return.

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