Unsettled by uncertainty - low and high threat environments

There are low threat and high threat political and economic environments. The work of psychologist S. Sales in the 1970's compared the 1920's versus the 1930's and found that the low threat environment of the 1920's (low employment and high income) versus high threat environment (high unemployment and low income) saw significant changes the behavior of society. 

As people move into high threat or high uncertainty environments, they will start to act less rational. They will look for extreme solutions not normally testable. They will have greater church going and engage in more extreme religion. They will ask for more authoritarian government in an effort to find solution to problems. 

We are in a high threat environment so there is a preoccupation with power and dominance, a willingness to submit to authority, less self-reflection, and a desire to exclude or punish those that move outside the norms of society. I could say that we have signs of this high threat environment in our current political environment. 

What does that mean for investing? There will be more risk of policy and market extremes. There is more likelihood that we will get extreme demands for more and stronger government. There will be more potential conflict across groups and countries because there is less willingness to compromise. there is higher likelihood for trade wars. More likelihood that politicians will not be willing to give on any position. 

A world of extremes is more likely in a high threat environment. This risk increases and the threats continue.