Reading this piece instigated the first time I thought differently about discount rates and long time horizons. And while that sticks out to me, what seems all the more important: “We should not take durability for granted. The average duration of a civilization has been ~300 years."
Time: July 14, 2017
Place: Read avidly on the BART
Pointer from: Recommendation from a friend, after coffee, after lunch
Note type: Inspired
We should not take durability for granted. Average duration of a civilization has been only 305 years (Michael Sheerer, 2002)
On discount rates and long time horizons
- very commonly economists and other social scientists speak of a discount rate. a discount rate tells us how to compare future benefits to current benefits (or costs) when we make decisions. insofar as the discount rate is high, that means we are counting future costs and benefits for less.
- that said, discounting for risk is justified in a way that discounting for the pure passage of time is not justified (we need to discard impatience
as a factor of relevance because it just doesn’t apply)
- but in the real world of actual human motivations, the application of abstract reason across such long time horizons is both rare and unconducive to getting people emotionally motivated to do the right thing. the actual attitudes required to induce an acceptance of such long time horizons are, in psychological terms, much lose to a kind of faith.
- on top of all of those considerations, happiness isn’t a single, simple variable which can be measured unambiguously. happiness means a lot of different things to different people. some persons may seek temporary stimulations, others may want to feel fulfilled at the end of their lives, and others may seek to maximize the quality of their typical day. some will seek happiness through the process of out-competing their peers for status, while others will look inward for contemplative delights. most likely we seek some mix of these ends but with varying emphases and weights. wealthier societies offer greater opportunities and freedoms to pursue preferred concepts of happiness
- a wealthier economy gives us more “fleeting" happiness experiences
- at most, the happiness literature shows that many changes in individual conditions are irrelevant for our well-being, due to habituation and expectation effects. this conclusion would not, however, eliminate the major benefits of economic growth. even if many “small" changes in income are irrelevant or nearly irrelevant for happiness, sufficiently large changes in life circumstances still may boost or harm our welfare.
- relative happiness
Importance of rules
- See the text for more on his rules
- [ME] I always go back to the first chapter of Philip Gourevitch's book We Wish to Inform You....