Interpreting it charitably, it's like what happens with maternity leave.
If you have 1 employee who needs to go on leave, you're required to pay benefits (maybe a salary), the work she was doing still needs to be done, and you have to replace whoever you hire as a substitute when she comes back, then you're going to be in a real pickle. [0]
If you have 1,000 employees, approximately the same work gets done, and it's just the cost of doing business. You're able to effectively self-insure against that risk.
The wolf thing is similar. If you're poor, have one cow, and a wolf eats it, that's your livelihood down the drain. If you have 10,000 cows then even a multi-day onslaught from a pack of wolves as you work out the details of why your herd is shrinking is just the cost of doing business.
[0] That isn't arguing against maternity leave, just that saddling individuals with a society-level goal isn't often a great use of resources. In this case, instead of a communal tax for the things society values, you randomly cripple the small businesses you claim to support. Taxes hurt your reelection chances though, whereas pushing the risks to ordinary people (no matter the extent of the worst case) rallies the electorate around your welfare initiatives and concentrates the damage on a group to small to hurt your election. As a side-cost (one I assume is intentional, but I might just be a bit jaded), large companies are unharmed.
The wolf thing is similar. If you're poor, have one cow, and a wolf eats it, >that's your livelihood down the drain. If you have 10,000 cows then even a multi-day onslaught from a pack of wolves as you work out the details of why your herd is shrinking is just the cost of doing business.
if you have 10,000 farmers with one cow each, some number of them will lose a cow to a wolf, the same number of cows that the big rancher loses to the wolves.
it's the same cost of doing business, and the devastation of a small number of individuals is made up for by the large population of 1 cow farmers who suffered no losses at all, doing thus even better than the big farmer.
plus, the one cow farmers, being people and not corporations, will pitch in and help their neighbors because that bad luck could affect any of them.
In aggregate, sure, but people make personal decisions for personal reasons, not because of aggregates.
Early in my career I had an opportunity that looked like a 92% chance (based on stats of previous people going through the program) of a nice tech job and an 8% chance of >2yrs of financial problems keeping me out of tech (1st year going into debt for a below-CoL internship type thing, 2nd year working 80+hrs/week in a decidedly non-tech job to pay off that debt, not having time to devote to portoflios and programming better). On average the program is great, but I didn't take it because an 8% chance of major life problems was too risky for my other goals at the time (early marriage, wife still in school, ...).
That's what I meant by "self insurance." If you add up thousands of events, each of which are fine on average, then the aggregate is likely fine. If one of them is devastating though, the risk of devastation is high if you only have a few events.
> pitch in and help
I'm not familiar enough with rural CO culture to comment. In other rural areas I've seen, neighbors are happy to help with labor (coming together to ward off wolves, helping rebuild broken structures, ...). They're happy to help with physical goods that are effectively a manifestation of labor (bringing over dinner as you're struggling financially or what have you). They're not going to give you a new cow though. Your finances are still hosed if the wolf gets to you.
If you have 1 employee who needs to go on leave, you're required to pay benefits (maybe a salary), the work she was doing still needs to be done, and you have to replace whoever you hire as a substitute when she comes back, then you're going to be in a real pickle. [0]
If you have 1,000 employees, approximately the same work gets done, and it's just the cost of doing business. You're able to effectively self-insure against that risk.
The wolf thing is similar. If you're poor, have one cow, and a wolf eats it, that's your livelihood down the drain. If you have 10,000 cows then even a multi-day onslaught from a pack of wolves as you work out the details of why your herd is shrinking is just the cost of doing business.
[0] That isn't arguing against maternity leave, just that saddling individuals with a society-level goal isn't often a great use of resources. In this case, instead of a communal tax for the things society values, you randomly cripple the small businesses you claim to support. Taxes hurt your reelection chances though, whereas pushing the risks to ordinary people (no matter the extent of the worst case) rallies the electorate around your welfare initiatives and concentrates the damage on a group to small to hurt your election. As a side-cost (one I assume is intentional, but I might just be a bit jaded), large companies are unharmed.