“Risk on” and “Risk Off” are terms heard among stock market traders, analysts, and investment advisors. They indicate whether the speaker feels that risk is high or low for investing in markets or in a particular stock. Risk is always a matter of degree, except under conditions of certainty—and when does that happen?
Yet, “risk on” and “risk off” seem to imply a binary condition. That is, a prospect is seen as risky or it is seen as not risky. The world is full of uncertainty on top of a base of certainty. The markets may crash tomorrow, or not; the sun, however, is certain to come up in the morning.
On the other hand, we live in a time when many risks have been quite low and others predictable for centuries, even though we may also experience intermittent chaos and change. Overall, we “moderns” have experienced relatively stable economic growth, environmental abundance, and increased prosperity for most of the industrial era.
Most folks imagine the idea that society might collapse in the near future as fundamentally “risk off.” They see it as a low risk, if they think about it at all. However, recent changes raise serious questions whether, like the increasingly chaotic Earth System itself, we have entered a period of significant “risk on” for the collapse of industrial civilization, as we have known it.
Dilemmas of Comfort and Complacency
Our recent and current experience with the COVID-19 pandemic suggests that the people of industrial societies have grown complacent due to a long period of relative material comfort. Our sense of security has grown with our increased dependence on the complex institutions in which we live. In that context, risk off seems a reasonable outlook. But it is not.
We live in societies that have consistently benefitted from the discoveries and inventions generated by science. We have consistently revered scientists even as they invented the means for massive human destruction such as nuclear weapons. The reverence for science faded quickly, however, as soon as scientists began reporting the bad news of the damaging effects of human techno-industrial overreach in exploiting the limited resources of the complex Earth System that is our habitat.
Now, suddenly in context of over two hundred years of increasing consumer comfort and imagined control of Nature, scientists warn us that risk is on for emerging chaos and disruption caused by production of the comforts of industrial civilization to which we have become so dependent. Many want to kill the messenger with accusations of fraud, as they spin all manner of conspiracy theories. Suddenly, science is not so wonderful.
Facing Uncertainty, or Not
The fundamental destabilization of the entire Earth System, which is euphemistically termed “climate change,” which minimizes our sense of risk, has begun to reach into every corner of our existence. At first, most of the privileged elites of wealth and social position have been able to avoid much direct contact with the impacts of the fires, floods, drought, pollution, super storms, and forced climate migration that increasingly ravage our environments and the rest of us. But not for long.
We have already entered the Anthropocene, the new geological epoch that is marked by the changes in the Earth System that are so clearly caused by the disruptive activities of industrial civilization. No matter how we rationalize denial and diversion, the damage to the Earth System continues. Risk is now definitely ON.
Only when we collectively recognize this new reality and take the extreme steps to transform our societies and ourselves to respond to the new great transformation of the entire Earth System upon which we depend for life and livelihood, can we turn toward risk off for the catastrophic consequences of inaction.
Robert MacNeil Christie, Author 