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Notes -
By most accounts and metrics, we in modern Western nations live in the wealthiest, safest society ever. We have some of the broadest and strongest social "safety nets" in history, and lower inequality than most large societies of the past. Thus, the downsides to risk-taking are presumably the lowest ever; never has "the price of failure" been so low.
So, why then, do we seem to be some of the most risk-averse people ever? Why do we appear to be more terrified of failure than our ancestors who were one bad harvest away from starvation?
(I wonder about this, because it seems to me to be a factor in our modern allergy to authority, specifically how scared people seem to be at the idea of stepping up and taking charge of something.)
We get used to safety, and there are fewer risks, so what ones there are feel more serious.
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Read a similar thread in hackernews or I might be just Mandela effecting myself, anyways.
I think the most convincing (to me) answer was along the lines of "Having less to lose, is precisely that which make the risk reward ratio so high". You make that equation more top heavy and the ratio goes down. One can argue that modernity allows for a more denominator heavy average outcome, but that's up in the air when you factor in probability.
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Counterargument: we are much less risk-averse on average than historical peoples, and as a result the people who throw it all up and risk everything are less extraordinary. Back in the day, when the average risk aversion may have been a 2/10, someone who played at a 5/10 or a 7/10 was extraordinary, and there was money on the table to be gained. Now, most people might be at a 5/10, and as a result playing at a 7/10 isn't that noticeable, and even a 9/10 doesn't pick up that much reward.
Historically, the vast majority of people lived in one place and died there, took the jobs in their town, more or less the same ones their parents held, attended the church their parents attended, married a local girl for life and had kids like their parents did. People died within miles of where they were born. Think of Sam Gamgee, early in Fellowship, stopping on their journey upon the realization that one more step would be the furthest from home he'd ever been, two days into their walkabout! Taking risks was completely foreign to historical commoners.
Today it is very common for ordinary people to move cross country, thousands of miles, to places where they know no one. Few people go into their father's profession, few take over the family land or the family business. I'm an extreme outlier in my PMC peer group for living on the street I grew up in without a drug addiction or a failed marriage holding me back. People are constantly changing careers or homes or marriages. Taking up a new career, moving far from family support networks, borrowing multiples of your net worth to start a business or go to college, leaving your current partner to look for a new one, these are all huge risks that no responsible peasant would countenance, which are routine parts of a middle class American life story.
As a result, taking really big risks doesn't deliver as much value. The great explorers and traders and settlers and entrepreneurs of the past became heroes and gods. and kings, because there was money just laying about waiting for someone to pick it up. If you were willing to throw your life up and move, you were instantly extraordinary, one in a million. Today, you're one of a million, just another guy.
Well put. Hadn't thought about it this way but yeah, compared to historical norms modern society is highly risky. No wonder there's so much anxiety abounding.
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I believe, one part of it is this: When life is difficult and you have very few safety nets, every decision you make matters. If you start making such decisions that matter as a 15-year old, by age 20 you are quite used to making such decisions. Also, looking around, you will see a self-selected sample, because those who made abysmally bad decisions or simply unlucky decisions are in the poorhouse or dead.
Other part, look at the safety nets. Most often they are implemented as professionalized bureaucracies: by the bureaucrats, for the bureaucrats, with standardized paperwork. The British copied the idea of civil service from imperial China, which was not a country known for dynamism. Nearly every Westerner is trained in an environment of bureaucracy (school) that both explicitly and also implicitly trains them to function in another bureaucracy later on. One distinctive feature of a bureaucratic organization is that it can administer rewards for conformity and punishments for non-conformity very reliably. It is designed by humans to function so. You interact with them in a standardized way. Other methods of human organization, such as free competition or informal social networks are quite different. Non-human forces of nature are similarly unforgiving as bureaucracies, but (used to be) unpredictable and not designed by humans.
Final part: I agree it seems like people are very risk-averse compared to previous. I myself feel quite risk-averse. Is it an accurate measure of change of rate in risk-taking? Plenty of people decided stay on the same farm, farming it the same way as their parents and grandparents did, generations after generations. Mostly, we don't hear of them.
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While we are safer, we also have more to lose. Advances in communication technology also means we are more exposed to stories of people who do lose it all, or simply slip down a level in SES, often generationally. While we may have an objectively higher standard of living in the working class in 2024 than the much of the upper class from 1924 did, very few people have a real internalized sense of this. Its why the cost of college has ballooned out of control while the number of people attending college is higher than ever; people are desperate to make the middle-class somehow hereditary.
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Perhaps I’m misinterpreting the type of “risk-averseness” that you’re talking about, but to me, the relationship between the stability of one’s current situation and one’s willingness to take risks is the exact opposite of your assessment. If you’re already in a perilous situation, then you’re so close to rock bottom that the potential upsides of a risky endeavor far outweigh the potential downsides. Vice versa for a comfortable situation.
This is clearest in sports: in football, it’s usually not the team leading by 10 points with 3 minutes left in the 4th that will throw a Hail Mary or kick an onside kick. In hockey, you never see a team in the lead pulling their goalie.
My recollection of what I've read in the past (which is not worth much) is that if a person is in, for example, a significant calorie deficit, it often comes with lethargy and lack of activity, but if it goes on enough to be a serious threat to life, apparently folks basically involuntarily have a need for movement, bursts of activity. They can't help themselves but to get up and move. So the relation is somewhat state-dependent. Maybe just conserve energy during typical lean periods, but if stuff gets really bad, obviously sitting around wasn't getting the job done, and so the risk of using your last ounce of energy is worth the chance that maybe you'll find a last second food source.
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