February 25, 2013

Risk-taking in individual vs. group contexts

During a period of growing passivity and risk aversion, how is it that even the minority of people who still have something of a taste for risk can't manage to put it to much use?

Most of the risky endeavors we'd like to take part in are social, and hence require us to find numerous others who also have a taste for risk. Having the trait on your own doesn't get you very far. On the harmful side, there's opportunistic teams of criminals, up to gangs. It's a lot easier to rob a store if you can find someone who's willing to drive the getaway car, or lend a hand inside.

On the creative side, there's forming a music group -- putting yourself out there before an audience, let alone trying to record a hit song, means all of you need to be willing to risk failure. I think that's why there don't seem to be as many successful bands as individuals in pop music these days.

Keeping things simple, let's say you only need one other partner for some endeavor, and that people come in two types -- risk-taking or not. If you are both wandering around your local area without being able to detect each other and thereby move purposefully toward each other, then your chances of encountering each other are R^2, where R is the share of the population that's risk-taking. (This is the "law of mass action" from chemistry, or the chance of drawing two risk-takers from a large population, where the draws are independent.)

Even if R starts to fall over time in a straight line, the decline in R^2 will be much more dramatic. For example, if 40% of the population are risk-takers, then they'll bump into each other with a 16% chance. Cut their numbers in half to 20% of the population, and they now only meet each other with a 4% chance. We shrank their share by half, but their encounters shrank far more -- a 75% drop.

As R falls, R^2 falls very fast at first, and then more shallowly. For most things I can think of that involve risk in a social context, they've all declined over the past 20 years, but it seems like the drop was steeper over the '90s and shallower during the 2000s. The crime rate is one (the web or network of criminality effect), and the teen pregnancy rate is another (it takes two to tango).

Things that aren't so easy to quantify are tougher to call, but the re-segregation of the sexes was a lot more rapid during the hysterical '90s, where we went from the popularity of power ballads to indoctrinating college freshmen to believe that every male student is a hidden date-rapist. Same with the re-segregation of the races -- very steep drop from white people driving up the TV ratings for the Cosby Show, Family Matters, and the Fresh Prince of Bel-Air, to the L.A. riots, O.J., "institutional racism," etc.

Extending social relations across major demographic barriers, like male-female or black-white, is risky stuff -- they are the Other, after all. So even a linear decline in risk-taking will cause a rapid collapse in such across-group relations.

How do the more risk-taking people try to find an outlet in more cocooning times? Well, teaming up with other risk-takers is going to quickly become nearly impossible, so they pursue more individualistic risky pursuits. There was that whole Jackass phenomenon that exploded in the '90s, where you jump off your roof, run into a tree, or whatever, just for kicks. Often you didn't have anyone else there since it wasn't like a team sport.

I remember jumping off the roof of our carport with an umbrella on an extremely windy day, sometime in the later '90s. The idea just hit me walking home from school, and it was pretty fun. The rise of EXTREME sports is part of this difficulty of risk-takers to team up with like-minded folks in their neighborhood, and so having to sky-dive, skateboard, rock-climb, or whatever, as individuals.

And then there's that EXTREME foodie stuff. Who can eat the grossest or strangest stuff. Again, not an activity that requires a partner or team, but is still risky. Basically all of the EXTREME activities of the '90s and 21st century fit this pattern.

Is there any domain that's more immune? Well, anywhere that people can detect one another as risk-takers and purposefully meet up. Since they're rare, that means the search will have to range over a large area, and they'll be in organizations that are scaled up more highly than just the neighborhood or even region. Then the assumptions of "mass action" don't apply.

Venture capitalists, for example, seem to be doing OK at indulging their taste for risk in a group setting. Politicians and high-ranking bureaucrats coming together from across the nation in high levels of the federal government, in order to socially experiment through policy -- that'll satisfy their taste for risk all right.

But for anything at the more local level, we're back to the dilemma of the few risk-takers having such trouble bumping into each other. Low-level entrepreneurism seems to be at a low point compared to the Reagan years. It takes balls not to suck mega-corporate dick, and back then people were less willing to just take the easy way out. Now everyone's casting their lot with the big guys, at a level unseen since the mid-century. Then it was GE, IBM, and General Motors, now it's Apple, Google, and Walmart / Target. Back in the '80s, there was actually popular demand for breaking up the big guys, AT&T being the most shocking casualty.

As a consolation, Western societies have been through these phases of the cycle many times before, so we'll make it into a more adventuresome zeitgeist sometime soon, probably within 5-10 years. The Gilded Age of robber barons was followed by the entrepreneurial Jazz Age, the technocratic mid-century by the New Wave Age of yuppies, and the neo-company-man Millennial era by... well, whatever's in store for us just around the bend.


  1. What do you think about organic farming?


  2. Now everyone's casting their lot with the big guys, at a level unseen since the mid-century. Then it was GE, IBM, and General Motors, now it's Apple, Google, and Walmart / Target. Back in the '80s, there was actually popular demand for breaking up the big guys, AT&T being the most shocking casualty.

    There's got to be some interesting data available on when new big businesses get founded and old big businesses die.

    Be interesting to see if this has any relationship, as intention doesn't necessarily line up to action (e.g. like the way the 80s was supposedly about cutting big government - but it didn't happen, instead there was just Reagonomics and the beginning of the catastrophic US debt situation, due to a lot of rhetoric and "spirit" without practicality). Deregulation often helped the big boys consolidate.


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