Tim Harford's new year's resolution is to be less loss-averse. Oliver Burkemann bemoans our irrational security-obsessed culture. And Luke Johnson writes that "too much risk aversion means a life of disappointment and lost chances." All this aversion to risk aversion makes me wonder: isn't there something to be said for cowardice?
History is often told as a story of feats of derring-do by great men. But society is shaped by the deeds of everyone, not just a few. Which suggests that cowardice might have played a role. Here are five effects, three positive, and two negative:
1.It reduced wars and theft; as Judge Peter Bowers said, it takes courage to be a thief. In this sense, cowardice has contributed to more secure property rights, which in turn has encouraged investment and economic growth. As Tim Besley shows (pdf), peace dividends can be large. It's no accident that the UK's industrial revolution began after a decline in violence, or that societies which value martial virtues - from hunter-gatherers through medieval Japan to North Korea - tend to stay poor.
2.The (irrational) fear of the sack can raise productivity and depress wage demands, thus reducing the Nairu. One unjustly neglected reason for full employment in the 50s and 60s was that workers remembered the depression of the 1930s and so were more quiescent than their objective bargaining position would justify. But as this cowardice declined - as workers who remembered the 30s retired and were replaced by braver younger ones - so full employment and low inflation proved to be unsustainable.
3. Cowardice reduces population growth; faint heart never won fair lady or - let's be blunt - raped her. And there's reasonable (pdf) evidence that, at least in poor societies, lower population growth (pdf) is conducive to faster per capita GDP growth.
So much for the positive effects of cowardice. Here are two adverse ones:
1.As Luke says, it reduces entrepreneurship and self-employment. Now, this is not a wholly bad thing. As Rick has pointed out, self-employment is often associated with weak economies, in part because entrepreneurs are often under- or poorly-employed. However, this is one of those areas where tails matter; a small minority of entrepreneurs can transform industries. The more cowardice there is, the fewer of these there'll be.
2.Cowardice reduces immigration. It takes guts to up sticks and move to an unfamiliar country. If everyone had been a coward, the US would not have been settled by Europeans - and unlike many lefties, I think the US is (net) a Good Thing. And migration can benefit both host and supplier countries.
Quantifying the net effect of all this is, I suspect, impossible: cowardice is about what didn't happen rather than what did, and it's very hard to distinguish between rational risk-aversion and irrational aversion. But I suspect that the role cowardice has played in history - and still plays today - isn't wholly bad.