Presentation on theme: "We Dont Donate To The Distant Future; Do We Care? Robin Hanson George Mason University."— Presentation transcript:
We Dont Donate To The Distant Future; Do We Care? Robin Hanson George Mason University
Global Warming Discount Debate Economists: Use market interest rates to discount future Summarizes billions of choices trading stuff now for stuff later At those rates, distant future hardly matter Moral philosophers: Say morality requires zero discount of future Many say agree, but matching acts rarer
Ben Franklins 200 year gift Most famous of US, Poor Richards Almanac 1785 French satire mocked US optimism: Fortunate Richard will left $ to pay in 500yr Franklin left £1000 ea. to Philly, Boston Died 1790, funds grew, in 1990 paid 2.3,5M$, x 35, 76 inflation-adjusted gains 1.8, 2.2%/yr return, below market rates No known copy-cats – why, if we care?
Supply & Demand Of Investment DemandSupply P Q amount invested interest rate = projects could invest in = folks willing to save
Interest Rates Components Inflation – After correct, is real interest Default Risk – Stolen, taxed, not repaid Existential Risk – No one is there Risk-Adjust – Want $ more in bad times Increasing Income – $ helps less if richer Discount Rate – care less for future folk Care less as future creatures differ more
Interest Rate History Land rent, secured loans: Sumer/Babylon 20-25% 3000-1900BC, 10-25% 1900-700BC, 16-20% 600BC Greece 9-10% 600-200BC Roman Egypt 9-12% 0-300AD Ottoman Empire 10-20% 600AD South India 15%, 900AD, >10%,1540 England, Flanders, France, Germany, Italy 9.5- 11%, 1200-1350 England 5-6%, 1400-1650, 4-5% 1650-1850, 2- 4% 1850-2000
Investment Security Wealth buildups long a tempting target At 5%: 1.05 500 = 4x10 9, 1.05 5000 = 10 105 ! E.g., Jewish Jubilee institutionalized grab But England property secure since 1200 Risk there was kids refuse to save Law prevents trusts instructed to save! Distaste for dead hands control living Discourages trade of helping future for ancestor respect/remember
Evolved Discount Rates Any sexual species that can save ½ per generation (~2.5%/yr) Nomadic forager humans (~4M-10Kya) Little physical capital could accumulate Norms hate dominance, material inequalities Norms to help, but for complex context Change since farming More: accept, inequality, secure property Longer time horizon?
If Care, Then Help 1. If many people act morally 2. And if many of them believe: A.Moral people care nearly-equally about distant-future folks (all else equal) B.If care, then help if (utility) cost low, help big C.Investing now to give later helps lots D.Investments dont hurt others in meanwhile 3. Then many will donate to future folk No donors => no one acts moral and think future counts same?
No-Donate Excuses Lack idea, law, infrastructure; money offends Franklin showed how We help in other ways, e.g., clean planet Why not both? If not other, really think more donate? Funds might get stolen Even so, good mean return, gains to thief count They might be richer than us All of them? Sure? Huge lever helps even rich Eventually old funds dominate, lower interest Yes this sets limit, but why so far from limit?
Other Ways To Help Kind act that influences future insufficient Strong temptation to wishful thinking Aid someone today, they might aid future But they usually dont help this much Imagine you wanted to help someone on Earth today, but knew little about them Cash is robust answer We know little about distant descendants
Also Problem For Economists Economic welfare moral good Time-translate invariant rel. wt. => exp(±r*t) Infer what folks want from their acts What they want can include morality Scale to cash, add to get total cash equiv. Max welfare even if not win-win in each case Approx. way to find total win-win deals Positive interest => help past is huge gain Can satisfy their prefs even if they dead Sign of fail to enforce deals across time
An Instructive Analogy Big fraction of new college students want to major in international business, development, or politics, to help poor Give less time to charities than in classes Give less value in $ than in time Most $ to governments, projects, vs. cash directly to poor Humans built to fake far concern while really develop skills, network, keep control, be seen?
Two Minds Near: few, detail Far: many, sparse Categorize, analogize See Liberman & Trope Science 21Nov 08 Abstract/concrete; distinct brain hardware? Differing emphasis of decide vs. impress Far more for impress, & these decisions: Talk, lead, control, moral/norm NEAR FAR
Near Far here, now, me, us; pictures; sex, temptation; means; careful analysis; uncertain, theory/trend-breaking atypical likely real local events; concrete, context- dependent, detailed, incidental features; feasible safe acts; secondary local practical concerns; socially close folks with unstable traits in small groups; follower, under power; there, then, them; words; love, self-control, endurance; ends; creative analogy; over- confident; theory/trend- following typical unlikely unreal global events; abstract, schematic, context-free, core, coarse, goal-related features; desirable risk-taking acts, central global symbolic ideal moral concerns; socially distant folks with stable traits in big groups; leader, in power;
Summary Market interest rates give huge leverage to help distant future If we cared in the slightest, wed donate We think we care, but we dont donate Franklin did, but to affirm US optimism Explain?: like Africa, future in far mode Feel moral, think we care Diverted to talk, network, control, large orgs. Away from give cash directly to individuals