Things that look like failures in long term planning (to people with resource surpluses) can actually be optimal decisions (to people without resource surpluses).
In that case, it was the observation that maximizing currency profit from farming in a society that experiences arbitrary taxation and repeated famine is useless -- if no one has food then no one will sell you any, assuming your saved currency hasn't already been seized.
In contrast, optimizing for familial and social ties were much more reliable ways to see yourself through then-common perils.
If you're poor and don't have a stable living situation, delaying gratification presents risks to you. (ones that people with money and stability don't have to consider)
Sometimes people are dumb, but sometimes they're optimizing for factors others are oblivious to.
What "take risk" means is that you should try to be entrepreneur in situation where you can fall back and be well paid programmer again if it does not work out. Or that you should risk someone elses money.
EDIT: I guess good rephrase would be that "take risk" usually means "overcome irrational fear when you are in perfectly safe situation". That is what actually people mean.
"Sell everything and fund my startup" is fine when you've got a 12 month emergency fund, living in a paid-off home, , and you parents are able to bail you out. It's not fine when failure means you're penniless and homeless.
Further: it's much less of a risk when you have a metaphorical rolodex of wealthy friends from university or business school. You're not cold pitching - not even slightly. Doors open for you, instead of being slammed in your face.
Yet they'll tell you shit like "Try hard enough and you will succeed! I worked long and hard, people saw that, and were willing to invest. Good hard honest work is rewarded."
The people working on their startup 12 hours a day who don't have connections have no idea that the bit left out is that "people were willing to invest in my idea because we chugged beers together in the basement of Sigma Chi."
That's not so much about being a billionaire, but about diversification.
Fortunately, even people of very modest means have access to diversified index funds these days.
If you have a few thousand stocks in your index fund (eg like VWRA or VT), then in doesn't matter how risky any individual stock is (like the startup in your example), as long as holding them has positive expected value.
> But because these households wobble on the edge of disaster continually, that changes the calculus. These small subsistence farmers generally seek to minimize risk, rather than maximize profits.
> [...] Consequently, for the family, money is likely to become useless the moment it is needed most. So while keeping some cash around against an emergency (or simply for market transactions – more on that later) might be a good idea, keeping nearly a year’s worth of expenses to make it through a bad harvest was not practical.
> In contrast, optimizing for familial and social ties were much more reliable ways to see yourself through then-common perils.
Social ties are no more helpful in a famine than currency is. People who can't sell you food can't give you food either. They are insurance against the case that your crop fails, not that everybody's crop fails.
Currency is fine in that scenario. The tendency not to grow the most profitable set of crops is a method of avoiding crop failure, not a method of mitigating it when it happens.
See "Risk Control", "Banking the Yields", "Banqueting the Yields" for why currency was a terrible idea and relationships were superior.
> Avoiding risk for these farmers comes in two main forms: there are strategies to reduce the risk of failure within the annual cycle and then strategies to prepare for failure by ‘banking’ the gains of a good cycle against the losses of a bad cycle.
> If you only farm one crop (the ‘best’ one) and you get too little rain or too much, or the temperature is wrong – that crop fails and the family starves. But if you farm several different crops, that mitigates the risk of any particular crop failing due to climate conditions, or blight (for the Romans, the standard combination seems to have been a mix of wheat, barley and beans, often with grapes or olives besides; there might also be a small garden space. Orchards might double as grazing-space for a small herd of animals, like pigs). By switching up crops like this and farming a bit of everything, the family is less profitable (and less engaged with markets, more on that in a bit), but much safer because the climate conditions that cause one crop to fail may not impact the others.
Under "Banqueting the Yields":
> The most immediate of these are the horizontal relationships: friends, family, marriage ties and neighbors. While some high-risk disasters are likely to strike an entire village at once (like a large raid or a general drought), most of the disasters that might befall one farming family (an essential worker being conscripted, harvest failure, robbery and so on) would just strike that one household. So farmers tended to build these reciprocal relationships with each other: I help you when things are bad for you, so you help me when things are bad for me.
You might notice that this is exactly what I said above. What did you want me to see?
