The All In Society

 One of the more depressing things about travelling in less developed societies is the low value placed on human life. The absence of basic standards in areas such as food or traffic safety, or in police or military behaviour, forces everybody to run unreasonable risks every day. This is turn leads to reckless behaviour and low respect for others, and perpetuates gangs and abuse of force. In such societies, mothers tended to have many children, partly because their own health is not valued and partly to make it more likely that the family farm had enough surviving heirs to continue.

 

In much of the world humanity has made great progress. A virtuous cycle of better healthcare and education is supported by more humane government policy, leading to smaller families and greater value on every individual life. 

 

Sometimes I can argue it goes too far. In pampered societies, the whole concept of the value of a life becomes taboo, causing scarce resources to be widely allocated to keeping centenarians alive for one more month, and to strange decisions in matters such as hostage negotiations. Perhaps the abortion debate falls in the same category, though there do seem to be double standards among many: how can an undeveloped foetus be so precious when a death row inmate or homeless addict or foreign war victim attracts so little support?

 

A key difference between Europe and the USA can be how a human life seems to be valued. It might have to do with the respective histories, with two world wars on one side and a pioneer mentality on the other, but Europe does seem to value its humans more highly. The whole gun culture, universal healthcare, maternity care and traffic standards are examples where Europe seems to have taken a different collective stand. The EU can take credit for exporting its humane standards to its formerly communist members with great success.

 

It does not surprise me that the USA and Europe have been heading in opposite directions along the key metric of healthy life expectancy. With its more positive legacy from the world wars, the USA used to lead the pack (along with Japan). In successive generations, it has been caught up and then overtaken by Europe, so it is now a clear laggard in the developed world. How this is not a major policy debate in the USA is a mystery to me, at least until I consider which interest groups set the policy agenda.

 

I think I perceive a related development emerging in the USA. Respect for life has manifestations at individual, family and societal level. Among individuals in the USA, I have observed something I am calling the “All In” mentality. This is a new recklessness, one that does not directly threaten death, but does risk the prospects of a life that meets basic quality standards.

 

A lot of this comes down to opportunity. When we all lived in villages, we could be reckless in how we used our plough, but most had little chance to stake our wellbeing on chancy business ventures. Nowadays, we can travel and experiment as wildly as we wish.

 

My mother personified the immediate post-war culture in the UK. She was brought up in a sweet shop, and was taught to count the pennies, avoid debt and accept the lot her class determined for her. She was always concerned with risk and instilled cautious values in me too.

 

Especially in the US, there are many societal pressures towards taking risks. Parents and church leaders are listened to much less nowadays than influencers. Hollywood and politicians relentlessly peddle the fiction of the American dream, whereas in fact social mobility is now lower than Europe’s. So often we hear of mantras encouraging risk taking in the name of ambition. The financial industry likes nothing more than to entrap us in debt that we can just about service trends up not down with no prospect of full repayment. The likes of Bitcoin and Robinhood only expand such temptation.

 

Legislators do their part too. Consumer protection in the US is threadbare: every time I hear an advert promoting some loan as “almost like free money” I cringe. Governments cannot resist the easy revenue from lotteries and sports betting. Pensions are now personal responsibility rather than tied to employment, further reducing incentives for prudent saving. Then there is the exaggerated feel-good drumbeat of social media and the consequent pressure to be a star.

 

Some of this is good. The Internet has led to a society full of great hustles that only existed for the privileged a generation ago. It is so easy to set up a business, obtain credit and find a niche with low overheads and genuine prospects. The smart can do very well these days.

 

But not everyone can be both smart and lucky, and a losing streak can quickly lead to a place of doom with no feasible exits. Trends of rising gun violence, addiction, suicide and homelessness testify to this growing band of losers. The excellent Nomadland chronicles one common end state. This is by no means the worst-case scenario: many suffer premature death, and feed the US decline down the global mortality league table.

 

The classic policy prescription for this malaise is welfare, in the form of support during periods of unemployment or rehabilitation. I support this, and of course the failure to deal with the prevalence of guns in society is a national disgrace too.

 

But I would also advocate a response more geared towards education. High flyers in finance understand that there is little to justify their exorbitant bonuses than knowledge of risk and odds. It is stunning how little understood this simple concept is in the rest of society.

 

Covid is a great example of this. Everything about Covid comes to understanding a spectrum of risks and odds. We bleat about herd immunity, but there is no such thing, certainly not at a fixed percentage of vaccinated people, only a possible outcome when risks become tolerably low. There is nothing magical about six feet of distance or masks. In some situations (such as a chanting crowd) risks were always high even at twelve feet and masked up, whereas in others risks remained low at two feet and mask free. A vaccine does not confer immunity, only a reduced risk, especially of serious illness. If we understand the nuance of risk and odds, all of this is obvious. But sadly that remains beyond most Americans.

 

I remember a particular maths lesson from when I was sixteen. It was the end of term and the teacher had completed the syllabus and wanted something to entertain us for the day. He chose gambling. Why do bookies make money? It is nothing to do with knowing which horse is more likely to win. It is all about the spread margin factor, something that we can all calculate but few bother with.

 

Consider a three horse race where the offered odds are respectively evens, two to one and three to one. Properly hedged and over the long term, the bookmaker will retain 50% of the total stake for the first horse, 33% for the second and 25% for the third. The margin is a modest 8%. In practice, most margins are more like 20-30%. That is why we all lose and they can afford all the adverts on TV to entice us into their kingdom.

 

Risk and odds are critical to a good life education, but I only learned that lesson because I had a great teacher who found some spare teaching time. There are many good applications in finance. We would all understand insurance much better if we had that knowledge, and the debate about climate change would be much more enlightened, even among so called leaders.

 

This thinking can also help us plan our lives. Taking on debt and some financial risk makes sense in our twenties, when our future earning potential is high. But once we turn fifty we ought to be thinking of paying down debts and finding ways to save, unless we fancy finding more about Nomadland from practical experience.

 

Humanity has made stunning progress, and healthy life expectancy is one powerful measure to demonstrate it. The “All In” society jeopardises some of that progress. Education about risk, at societal and family level, is one way to reduce its corrosive effects.