The Theory of Abundance: A Recontextualization of Humans and Risk Taking

The Theory of Abundance proposes that human participation in high-value, long-horizon activities is fundamentally constrained by the structural ability to survive the "wait" between effort and reward. In this framework, economic life is not lived on a frictionless plane but within a sequence of immediate liabilities—such as rent, food, and debt—that arrive with absolute certainty. When an individual or household lives near a catastrophe cliff where failure is terminal, they rationally prioritize short-horizon, lower-variance actions to keep the sequence alive, even if superior long-term possibilities exist. The central prediction is that as structural safety rises and the "trapdoor" of ruin is removed, the space of viable action expands, allowing people to transition from defensive, necessity-driven labor to the high-variance, time-intensive bets required for education, invention, and entrepreneurship. This prediction is then subjected to several "stress tests" across education, innovation, and small-business formation to see if it survives contact with observable reality. For instance, while removing school fees expands formal access, evidence from sub-Saharan Africa suggests that unless the underlying survival pressure on the household is also eased, durable participation remains suppressed. Conversely, interventions that stabilize a household's material baseline over time—such as Mexico’s Progresa—show significantly higher gains in educational duration. Similar patterns appear in innovation: children from high-income families are vastly more likely to become inventors not necessarily due to talent alone, but because their environment allows them to absorb the long periods of failure and uncertain payoff inherent in the creative process. Ultimately, the theory argues that the elimination of the ability to enter a state of ruin is a primary catalyst for human exploration; removing the threat of ruin unlocks the ability to sustain the fragile, long-term endeavors from which learning and progress emerge.