I have read online (not much of a source, ik) that in the past, it was entirely normal for guy best-friends to be as close as girl best-friends, they'd hold hands, embrace, stuff like that.
Nowadays, of course, any public display of affection tends to imply that the two people involved are dating, and men, especially, avoid showing any proximity -- Physical OR emotional -- to their friends, lest they be thought of as homosexual.
Why did this change? WHY did it change?
@Edit: I am of course referring to western men. I don't know how it is outside the west, or how it was before.
I have an earlier answer that might interest you!
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The Victorian era is infamous, rightly or wrongly, for its repression of sexuality. But its temporal and philosophical heir definitely did repress the possibility of the homoromantic relationships between women and between men that had been normal, if not the norm, for centuries and centuries. This process was rooted in one of society's most fundamental adopted divisions, gender, so you can imagine that there are a whole lot of factors implicated in the shift that are all tangled around each other and mutually reinforcing. Some of the key ones include: industrialization and urbanization, women's colleges, class concerns, a crisis in masculinity (masculinity is always in crisis), and most importantly, the invention of "sexology" as a field of science at a time that science played a central role in cataloguing and normatively ordering society.
Anthony Rotundo, primarily studying men, argues that "romantic friendships" in America start to become visible in the Revolutionary War era and flourish in the mid-19th century. The 18th century is kind of a black hole for me so I'll take his word for when the concept of romantic friendships was jump-started, but it was by no means new. In the Middle Ages, Christians and Muslims alike wrote poetry and composed letters depicting homoromantic and even homoerotic relationships. I'm going back this far not for the heck of it, but because medieval society helps clarify key qualities of male and female "romantic friendships" that contributed to their eventual demise: a societal value on men expressing emotion (knightly tears; religious devotions) and the very, very limited possibilities for unmarried women to rise above the poorest classes. Romantic friendships did not threaten men's sense of themselves as men, patriarchal control of women, or marriage.
Socio-economic changes in the late 19th and early 20th centuries knocked all of that askew.
The 1870s-1920s saw a massive influx of young women and men into U.S. cities. On one hand, this was an age-old process that, for centuries, was basically the season cities could exist (they were population sinks--on their own, city residents could not reproduce enough to replace themselves given mortality rates). On the other, the type of work they found and the pathways for success in that work were much more recent. The old system of apprenticeships and family connections for men, and almost exclusively domestic servant work for women, absolutely persisted but were swamped by the numbers of factory workers and non-domestic service workers. To support the population boom, cities constructed residential hotels/dormitories/apartments that were often designated single-sex.
That situation made both male and female romantic friendships a threat to the gendered prescriptions of society. For men, it diminished the utility of romantic friendships as potential economic and social connections, meaning they wouldn't be stepping stones towards supporting their eventual family. For women, it opened a much more achievable possibility of financial stability outside marriage.
The blossoming of women's colleges at this time made that problem even clearer to the sexuality reformers and sexologists we'll meet in a little--because "these women" were most assuredly middle and upper-middle class. In short: the ideal marriage partners for men...in an environment where romantic friendships could permit them both prestigious social roles (scholars, administrators, politicians, professional artists, etc) and economic success without men. This was true, even long-term, for both students and teachers. About 10% of American women at the end of the 19th century never married; the figure was around 50% for graduates of women's colleges. So when men observed, as in this letter to the Yale student newspaper:
There is a term in general use at Vassar, truly calculated to awaken within the ima penetralia of our souls all that love for the noble and the aesthetic of which our natures are capable, The term in question is "smashing."
When a Vassar girl takes a shine to another, she straightway enters upon a regular course of bouquet sendings, interspersed with tinted notes, mysterious packages of ‘Ridley’s Mixed Candies,’ locks of hair perhaps, and many other tender tokens, until at last the object of her attentions is captured, the two women become inseparable, and the aggressor is considered by her circle of acquaintances as "smashed."
they might not have seen sexual competition, but the possibility of a lifestyle threat was lurking.
Men's romantic friendships were also under fire with respect to their emotionality. The gradual militarization of western culture over the 19th century (think the Salvation Army or the military trappings of the Boy Scouts) drove/was driven by a narrowing definition of masculinity on "muscles"--vigor, strength, athleticism, the Teddy Roosevelt stereotype. Whereas emotions had once been the healthy counterpart, gradually the internal dimensions of character and a value on openness and gentleness became a liability. (Marriage was still okay, because the idealized marriage was the husband/father rising up to 'be a man' and take care of his family).
Steeped in all these burgeoning developments and their implications came the sexologists, with an agenda not just to categorize society but to evangelize their "discoveries."
A lot of us are at least in passing familiar with the "homosexuality didn't exist as 'homosexuality', an identity, before 1900" trope. This can be taken too far (and often is), but it is nevertheless true that the later decades of the 19th century and early 20th century saw professional, middle-class scientists coalescing ideas of same-sex sexual relations according to Science rather than morality. Instead of a wrong step by step choice, it was an abnormal physical, inherited trait.
This idea got mixed up in Progressive Era utopian visions of societal improvement that, among other things, tagged "deviants" and lower-class people as hindering forward progress--just as same-sex sex, now identified with the people who practiced it, prevented heterosexual, reproductive sex.
And scientists like Bernard Talmey exhibited one of my favorite characteristics of historical men writing about women: in his 1904 book on, well, women, he announced his deep concern that the American public "does not even surmise of the existence" of sex between women. It was a scientific version of what I see in my medieval (male) clerics skating gingerly around actually mentioning lesbian activity because they don't want to put the idea in women's minds.
But this view of American sexologists, lagging somewhat behind their European counterparts, was crucial to the decline of romantic friendships among men and women. First, because it started off with a condemnation of these friendships that took away from social order regardless of whether there was sexual activity involved.
Second, because of the label first stacked onto the participants: inverts. That is, the inversion of proper sex/sexual order. Here we meet up with the rise of muscular masculinity against emotionality and gentleness, as well women's political activity and independent economic power against the norm of a separate women's/domestic sphere.
And so romantic friendships, instead of a natural part of growing up for men and women, became an aberration--not in the sense of "rare", but in the sense of "wrong."
...Unbeknownst to the sexologists, however, their codification of language and an identity for homosexual men and women gave people who did experience same-sex attraction a mutual self-understanding--a certain legitimacy. It's seen as the beginning of an LGBTQ+ movement (if not yet a civil rights one). So there is a lot to mourn about the loss of romantic friendships and what it signified. But this is one story about the past that also has a future.
I can't speak for Europe, but you can get a lot of information on the formation of heterosexuality severing itself from homosociality in the United States from:
Gay New York: Gender, Urban Culture, and the Makings of the Gay Male World, 1890-1940, 1890-1940 by George Chauncey [Particularly Chapter 4: The Forging of Queer Identities and the Emergence of Heterosexuality in Middle Class Culture] [This one is my favorite of these books on the topic - don't be thrown off by the 'New York' in the title - the discussion of the formation of heterosexuality is not exclusive to the city]
The Gay Revolution: The Story of the Struggle by Lillian Faderman [This is a very movement-focused book so you'll get a lot of information on the early progression of gay rights and how homosexuality/homosociality was viewed but not as much information on heterosexuality in general]
A Queer History of the United States by Michael Bronski [I list this one last because I think it's kind of lightweight but it has some interesting information on the formation of heterosexuality and conservative gender roles]
I think The Gay Metropolis: The Landmark History of Gay Life in America by Charles Kaiser might have some information on this but most of the chapters are in my TBR pile so I can't verify how much of the information might be repetitive.