A paper by Bullen, Fahey, and Kenway (2006) describes the rise of a risk economy — a shadow structure haunting the knowledge economy.

A paper by Bullen, Fahey, and Kenway (2006) describes the rise of a risk economy — a shadow structure haunting the knowledge economy.

The Risk Economy

They present innovation as a cultural and political project that nation-states pursue as a matter of economic security and path to prosperity. Using Derrida’s concept of hauntology they point to risk as a shadowy figure that accompanies innovation and its necessary projection into future timelines. Since risk exists as potential there are efforts to make that potential manageable. One of the ways of doing so is through probabilities that are assigned financial values. Insurance firms build markets by providing coverage for such risks for profit. Insurers like Armilla AI are developing policies to cover damages caused by AI.

Air Canada learned the hard way that the courts will hold corporations to contracts negotiated by bots.

Air Canada learned the hard way that the courts will hold corporations to contracts negotiated by bots. In a recent interview, Karthik Ramakrishnan, CEO of Armilla, said they are addressing “… the uncertainty of whether existing policies will respond to AI-specific failures, potentially mirroring the early, costly lessons of cyber risk,” (Newswire, April 30, 2025). To underwrite these risks, insurers are assessing model governance, data sources, and the explainability of decisions. This could reshape how companies procure and deploy AI systems.

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