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It is observed that often, people tend to dislike risk (economists say that people tend to be "risk-averse"). For example, consider two Gambles X and Y. Gamble X involves a prize of $1 with probability (w.p.) 0.5 and a prize of -$1 w.p. 0.5. Gamble Y involves a prize of $0 w.p. 1. Most people tend to prefer Gamble Y to Gamble X.

Evolutionary biology can perhaps explain why this is so. That is, why human beings tend to be risk-averse.

My question is this: Does philosophy have any arguments for why humans should be risk-averse? That is, are there philosophical arguments for why risk is intrinsically bad or undesirable? Or why it is correct to prefer less risk to more risk?

  • You know about probability theory and yet you ask this? Why? I really have no clue why you would. Expected value and variance ought to explain why people ought to prefer gamble Y to gamble X. This I think may extend to real life situations where risk and payoffs, I think, can be quantified or at least compared. Btw about your second paragraph, I am not sure that humans are necessarily risk-averse, particularly if they have incorrectly estimated probabilities. Heard of NNTaleb? – BCLC Aug 18 '15 at 17:41
  • As for questions like 'Do the increases in expected value and in variance in a gamble Z make it preferable to gambles X or Y?', those are faced by statisticians, economists and financiers daily. It depends on the increase, relative risk blah blah, I guess. Also, I think being risk averse actually follows from being rational and that being risk-neutral or risk-inclined is, um, gambling addiction? – BCLC Aug 18 '15 at 17:48
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I'm going to suggest two features that might lead ethicists to advocate some risk-averseness (or at least caution towards taking risks).

The Naturalistic Fallacy

One thing to keep in mind for this discussion is that we should not confuse what nature has us do with what we ought to do (nor however should we make the opposite error and assume what we should do has nothing to do with nature).

In your question, you note that social biology explains that we are by nature risk-averse. This does not by itself make it good or bad. There's two reasons. First, nature is full of all sorts of bad things and good things relative to us (Arsenic, for instance, and sugar). Second, we still need to have ideals about nature to know how things should work. For instance, without an idea of how we think nature ought to be, it's hard to know whether there's anything wrong with a bear ripping apart a seal or a fox eating a baby.

Aristotle, the Mean, and Risk Taking

First, I would suggest there are good Aristotelian reasons. For Aristotle, the task of ethics is to be virtuous, and in good part this means finding the mean between extremes. Aristotle defines the good in terms of human flourishing. Thus, the right extent of risk-taking is the extent that maximizes our flourishing.

Taking large risks all the time (at least to me) appears to be something that leads on the average to negative outcomes. Conversely, taking no risks is also not a good life strategy either. At the same time, the consequences for taking large risks and failing in general outweigh the consequences for avoiding risk. Consequently, the mean in terms of risk-taking should be closer to the side of not taking risks. At the same time, this does not mean it should be wholly without risk.

I take it that for Aristotle risk-taking is both a task of phronesis (pratical wisdom) and a virtue related to courage (but not identical because only courage in battle and political courage get full consideration in Nicomachean Ethics BK III).

For Aristotle, having a vice in terms of risk taking would be bad because the outcomes for human flourishing are bad. Similarly, having a vice in terms of taking no risks would be bad, because (a) that's impossible and (b) the nature of life on this fragile rock is such that we can rationally conclude certain risks are worth taking.

Contemporary Kantians might also be able to avail themselves of something like the above account by understanding flourishing as the flourishing of rational agency. (I personally don't think Kant would go for that, but there's some issues that make it possible related to the complete good vs. highest good).

Utilitarian (Consequentalist) Reasons for Avoiding Risk

For the utilitarian, the point of ethics is to maximize happiness. For consequentalists more broadly, it is to maximize some good or minimize some bad thing (or set of goods / bads). Consequently, it's just going to be the same as the risk calculation assuming we have some calculation of the potential harm and potential gain.

If we don't act for the best, we are doing wrong (though an important ambiguity in classical Utilitarianism is whether we act rightly when what we do accomplishes the good or when what we aim for (regardless of its achievement) is what we reasonably expect would maximize the good)).

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Actually, risk-aversity is very basic to older philosophies and there is a strong trend against it as those philosophies mature. So it has vast and broad support, but is resisted more and more as we move forward. It is ambiguous whether there are any arguments in its favor that do not then have more powerful contradictions later.

Epicureanism favors the lack of fear resulting from removing risk as a separate, special category of good -- the katastemic or static pleasure. Economics and Utilitarianism, Epicurus' more modern form, tends to reject affording absolute good to the sustainable state, and seeks to characterize it in terms of some dynamic tension between risk and reward.

The Stoics strongly valued avoiding premature closure, and taking a risk is the most common stereotype for allowing premature closure, as they reached their epitome in Skepticism, they took avoidance of attachment to an outcome as a principle value. Their revival in modern skepticism that leads us through Nietzsche, strongly attacks cowardice and conformity as the ultimately greater risk, putting risk avoidance into a state of complete paradox.

Schools like Cynicism and those attending to Heraclitus, who promote risk as a natural part of every aspect of life, which is to be embraced, rather than controlled fare very badly historically, but will not die. They often are resurrected and reshaped in positive directions in the thinking of those who move us forward later. Dialecticism takes this notion of basic instability, and gives it a reason, but encourages sustaining it, if not pushing it toward less stability.

Modern moves in philosophy toward a 'therapeutic' direction may be taken as a return to pursuit of stability and limitation of risk. But it is not a strong thread. Also people motivated by the destructiveness of the Western lifestyle are preaching sustainability once more, and speaking in terms of risk-aversity in establishing empathy for the future. So this trend away from safety as a value in itself is not absolute, but it remains strong.

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