In Risk: A Sociological Theory (English translation, 1993), Luhmann argues that in the second half of the 18th century a number of issues (in economics, science, politics, etc.) converged to create modernity, or to mark the change from traditional to modern society. One of the more interesting changes relates to time. Psychic and social systems use temporal and spatial schemata to reduce complexity. The traditional temporal schema distinguished between time and eternity, while modern society draws a distinction between past and future.
For traditional society, which was organized by stratification or a center/periphery schema, there was no sense of a future that could be shaped or changed by human decisions. They didn’t think in terms of past/future; for them, it was all just time (as distinguished from eternity). God or the fates knew what was to come, and it didn’t matter what people did. The life to come is already there waiting for us. Life is folded up and it unfolds, revealing what was there all along. Thus, life develops like an acorn develops into an Oak. It’s all there in potentia.
None of this it true for modern society. We have forgotten all this. For modern society, the present is the difference between past and future. There is no actual present as a time unit; it is just a difference. The present has not duration; it comes into being and passes away in the same instant.
We think of the present as the moment for decision. We believe that decisions made now will shape the future. Of course, we cannot guarantee that things will go as planned even if we make the best decisions, because we always decide in the absence of knowledge. We cannot know what the future will bring because there are too many contingencies. We can eat the right food and live a virtuous life and still die in a plane crash.
This leads to the concept of risk. Traditional society knew only danger, not risk. Dangers were everywhere (strangers, predators, etc.), but no risks. Risk differs from danger because risk presupposes a possible future loss. One makes a decision, such as investing money, hoping for some future advantage or benefit. Risks, of course, have to be weighed, and we shouldn’t gamble more than we can afford to lose. If there’s no future in which one might gain some advantage, there’s no risk.
These days, we are faced with constant decisions, and we are supposed to take “personal responsibility” for our decisions. Parents tell their children to “make good decisions.” I don’t think a parent in previous centuries would have ever said something like that to a child. Kids just did what they did; it wasn’t about making good or bad decisions. Children were just animals that needed to be tamed.
We also associate decisions with ethics. For example, deciding to buy “fair trade” products or recycle plastics is considered ethical.
The ethical element relates to modern beliefs/illusions about rationality. Every decision is supposed to be rational. Economists talk about people making rational decisions based on perceived costs and benefits, and they say that criminals commit crimes because the costs (negative sanctions, punishment) are not high enough. If we just make crime more costly, the argument goes, then criminals will make better decisions. This is nonsense. We ask a convicted criminal why he “decided” to commit some horrible crime, assuming that the crime was based on some rational decision. Or people don’t work hard because the cost of not working (poverty) is too low or they haven’t been properly “incentivized.”
Insurance was invented to deal with risk.
I will write more. I haven’t had time to get very far into the book yet.