Although time preference is usually utilized to help qualify habits of saving and borrowing, it can also be used in regards to other human behavior. For instance, exercising and eating a balanced diet is indicative low time preference; binge drinking and chain smoking is more in line with high time preference. In short, if the benefits of a particular action are likely to be experienced in the long term, the action is low time preference. In economics, we don't pass judgment on such behaviors, but sociologically and ethically considered, low time preference is preferable.
This generalization holds true in the sexual marketplace as well. Those who imbibe in short-term thinking, either by coupling with undesirable partners, or, setting aside the Catholic position on the morality of birth control, practicing unsafe sex, are exhibiting high time preference. The result of which is bastard spawn who will grow up without a father figure. Such an environment is poisonous for the child. Moreover, since, as Aristotle observed, humans accrue habits in part by observation--and practice--the child will likely exhibit the same time preference as his mother. Hence the vicious cycle of human poverty.
Two things seem clear to me. First, what is needed to be done is simple, if not especially easy. Those who wish to avoid the vicious cycle of poverty must adapt low time preference behavior. In the middle and upper class, this is easy enough to do, both because one's friends, family and neighbors are more likely to practice low time preference behaviors, but also because, for the women, there are more desirable men available, with whom to marry. For the underclass, such men are far less available; this formed one of the themes of Charles Murray's recent book, Coming Apart. Women's time preferences may change if the pool of desirable men becomes larger. Just how one achieves this is an entirely different, and possibly even larger, problem.
Second, the Government can do very little about this sort of thing, and actually adds slightly to the problem by offering short-term incentives to the poor. Welfare benefits single mothers, which is another way of saying that it incentivizes them. This is not to say that assisting single mothers is ethically unsound, or that the Government is trying to create as many single mothers as possible as part of some diabolical plot to further undermine the underclass. Neither is it my intention to argue that destroying the Welfare State will fix the problem; it won't. It is nonetheless clear that if single motherhood is to be discouraged, the State would be wise to offer incentives to men and women alike to marry and remain together until the child reaches adulthood.
It might seem odd that a libertarian would be agitating for a Government program. In truth, I'm not particularly keen on the idea of subsidizing marriage, myself. However, if the State is to do something along this front, it would resemble this idea. So even if it's not worth implementing, it's worth examining. Even if it's a difficult goal to achieve, altering the time preference of Americans is a valuable goal if we wish to reverse the decivilizing trends of recent decades.
Monday, May 28, 2012
Saturday, May 26, 2012
Time preference and civilization
One of the more fruitful observations made by the Austrian school of economics is the role played by time preference in the market. As Wikipedia puts it: " Someone with a high time preference is focused substantially on
his well-being in the present and the immediate future relative to the
average person, while someone with low time preference places more emphasis than average on their well-being in the further future."
Time preference intersects in economics in this fashion: a high time preference economy will have few savers, hence, interest rates will be higher than in a low time preference economy. This is because borrowers compete to obtain loans at the lowest possible rate of interest, while lenders try to obtain the highest rate of interest for their money. True, in our economy, the Federal Reserve tries to set the interest rate, but in a free economy, the rate of interest would be coordinated like any other good and service, through competition. And even in the mismanaged economy in which we live, the market rate of interest emerges eventually.
Ludwig von Mises covers the topic in much more detail for those interested. But I'd like to borrow the Austrian terminology to examine the role played by time preference in civilization, a point I first considered while reading Democracy: The God That Failed by the Austrian economist Hans-Hermann Hoppe.
In general civilization tends to be characterized by low time preference. Indeed, the ability to even consider future well-being may mark the transition to civilization; whereas the prehistoric hunter-gatherer tribes were entirely preoccupied with seeking food and shelter--and trying to avoid death at the paws of wild creatures-- the advent of farming ensured that at least some members of the tribe could concern themselves with other matters. Only then was low time preference a possibility.
Here's Carroll Quigley in Tragedy in Hope:
"It has been said that in 1700 the agricultural labor of twenty persons was required in order to produce enough food for twenty-one persons, while in some areas, by 1900, three persons could produce enough food for twenty-one persons, thus releasing seventeen persons for nonagricultural activities." (p. 16)
What was true of what Quigley calls the Agricultural Revolution was true, albeit to a much lesser extent, of earlier Agrarian societies. The meager advances of primitive peoples, and the technological innovations of later times, to say nothing of its art and science, were made possible by a surplus of food; but it was only when societies began to value future time periods that such developments took place.
Now then, how stands are time preference today, in American society? We have become a high time preference society, characterized by massive indebtedness and other present-oriented behavior. Taking on any debt is probably evidence of high time preference, but much of our behavior is indicative of something beyond this, for which the Austrian school has provided no such terminology.
There is a chasm between a young person who buys a house on credit and an older person who retires without having paid off his mortgage. The former may be acting with his future in mind; he desires to build equity quickly so that he may devote future income to saving for his retirement. The latter is simply foolish, and far too common among the soon to be retired boomers. In fact, high teen unemployment has much to do with the fact that boomers are not retiring, because they are still in debt. Hence the time preference of the boomers has led to the prospect of a generational breakdown.
That our government rewards such foolishness is another indication of the time preference of our society. Since savings provide the liquidity for capital advancement, and, therefore, increased productivity and technological advancement, savers should be rewarded, i.e. through higher rates of interest. Instead, because our own government is in such massive debt, it seeks to keep interest rates low so as to allow it to borrow money less expensively. This debt is evidence that, sometime in the last century, we shifted from a society that saved money so as to care for its elderly, to one which went into debt to care for all and sundry. Although the motives are similar, the end result is very much different. The former is the mark of a stable and functioning society, the latter marks one which is only delaying defaulting on its profligate promises.
In a future post, I'd like to examine the role played by time preference when it comes to dating, (not?) marrying, and (not?) having children, but for now, I'll just leave you with this and this.
Time preference intersects in economics in this fashion: a high time preference economy will have few savers, hence, interest rates will be higher than in a low time preference economy. This is because borrowers compete to obtain loans at the lowest possible rate of interest, while lenders try to obtain the highest rate of interest for their money. True, in our economy, the Federal Reserve tries to set the interest rate, but in a free economy, the rate of interest would be coordinated like any other good and service, through competition. And even in the mismanaged economy in which we live, the market rate of interest emerges eventually.
Ludwig von Mises covers the topic in much more detail for those interested. But I'd like to borrow the Austrian terminology to examine the role played by time preference in civilization, a point I first considered while reading Democracy: The God That Failed by the Austrian economist Hans-Hermann Hoppe.
In general civilization tends to be characterized by low time preference. Indeed, the ability to even consider future well-being may mark the transition to civilization; whereas the prehistoric hunter-gatherer tribes were entirely preoccupied with seeking food and shelter--and trying to avoid death at the paws of wild creatures-- the advent of farming ensured that at least some members of the tribe could concern themselves with other matters. Only then was low time preference a possibility.
Here's Carroll Quigley in Tragedy in Hope:
"It has been said that in 1700 the agricultural labor of twenty persons was required in order to produce enough food for twenty-one persons, while in some areas, by 1900, three persons could produce enough food for twenty-one persons, thus releasing seventeen persons for nonagricultural activities." (p. 16)
What was true of what Quigley calls the Agricultural Revolution was true, albeit to a much lesser extent, of earlier Agrarian societies. The meager advances of primitive peoples, and the technological innovations of later times, to say nothing of its art and science, were made possible by a surplus of food; but it was only when societies began to value future time periods that such developments took place.
Now then, how stands are time preference today, in American society? We have become a high time preference society, characterized by massive indebtedness and other present-oriented behavior. Taking on any debt is probably evidence of high time preference, but much of our behavior is indicative of something beyond this, for which the Austrian school has provided no such terminology.
There is a chasm between a young person who buys a house on credit and an older person who retires without having paid off his mortgage. The former may be acting with his future in mind; he desires to build equity quickly so that he may devote future income to saving for his retirement. The latter is simply foolish, and far too common among the soon to be retired boomers. In fact, high teen unemployment has much to do with the fact that boomers are not retiring, because they are still in debt. Hence the time preference of the boomers has led to the prospect of a generational breakdown.
That our government rewards such foolishness is another indication of the time preference of our society. Since savings provide the liquidity for capital advancement, and, therefore, increased productivity and technological advancement, savers should be rewarded, i.e. through higher rates of interest. Instead, because our own government is in such massive debt, it seeks to keep interest rates low so as to allow it to borrow money less expensively. This debt is evidence that, sometime in the last century, we shifted from a society that saved money so as to care for its elderly, to one which went into debt to care for all and sundry. Although the motives are similar, the end result is very much different. The former is the mark of a stable and functioning society, the latter marks one which is only delaying defaulting on its profligate promises.
In a future post, I'd like to examine the role played by time preference when it comes to dating, (not?) marrying, and (not?) having children, but for now, I'll just leave you with this and this.
Wednesday, May 09, 2012
Gay marriage?
Today, President Obama came out, er, decided that gay marriage is okay by him. In the interest of full disclosure, I'll offer my take on gay marriage, before examining the political ramifications of his pronouncement.
I'm opposed to gay marriage for the same reason I'm opposed to four-sided triangles; it's a contradiction in terms. It might be socially desirable to allow gays to couple for life--although, given the state of marriage under our no fault divorce laws, this may only amount to a handful of years--but that does not make a marriage. This ruffles the feathers of fascist Americans, which is to say, almost all Americans, for whom the State decides all, but it shouldn't be a hard point to comprehend. Marriage antedates the State and will continue to exist once our present form of government has crumbled. The State cannot alter that which is outside it. It may say whatever it wishes, but allowing gays to get "married" makes no more sense than allowing triangles to have four sides.
The common rejoinder here is that homosexuality is a part of history. Yet, while this is undoubtedly true, one searches in vain for a record of gay marriage. There was ample romance between two men, or two women, but nothing like gay marriage. I will go further and note that in my research--spotty and haphazard--I can find no indications that gays defined themselves according to their homosexuality as they now do. Almost all were bisexual. Think of the Spartan soldiers, or Eveyln Waugh at Oxford. Until recently, a predilection for buggery was something one grew out of.
That said, as a libertarian, I have no problem with gays wishing that their partners be allowed to visit them in the hospital, covered under the same healthcare plans, and so forth. These disputes are not a matter for the State. Let hospitals liberalize visitation rules, let insurance companies write policies for gay couples; in short, let the market meet consumer demand.
Now then, what are the political implications? Support for gay marriage is less a right-left issue than it is an old-young one. True, progressives are more likely to support gay marriage, and conservatives are more likely to oppose it, but gay marriage referendums have been soundly defeated each and every time the voters have had their say. Despite the fact that the country is moving left, the populace as a whole still opposes gay marriage. That said, few American younger than thirty seem to care enough to oppose it. My sample is distorted; most of my companions are college graduates, but I think my supposition is largely correct.
Years of being told of the magical powers of gays have caused our youth to refuse to man the Christian defenses. It's tempting to blame them, but it's really the fault of the idiot boomers for sending their children to public schools. What on earth did they expect to happen?
Barry is either misreading the tea leaves or hoping to secure the youth vote without frittering away oldsters who might otherwise deflect to Romney. I suspect he has misjudged, though, based on the jubilant Facebook posts of my contemporaries, gay marriage is the greatest thing since sliced bread--locally grown of course. Unless Barry is simply bored and wishes to lose, we'll know how his move polled based on whether he draws attention to his position or backs away from it like a Reverend Wright sermon.
One last point. I see that my contemporaries cannot even fathom why gays might not be allowed to marry. I encourage them to think on the matter for a little while before insisting that every earlier generation was bigoted and wrongheaded to fail to grant something so obvious.
The reason functional States seek to sanction marriage is because it's an exceedingly valuable institution. It may prove similarly valuable to allow gays to marry; we simply do not know. But it's worth remembering that the health of our society is far more bound up with the vast majority of heterosexuals and the success--or failure--of their marriages than it is with the tiny percentage of homosexuals and their couplings. Even if every gay in America gets married and remains in that state, it won't make up for the horrors divorce and cohabitation have wrought on the American family.
I'm opposed to gay marriage for the same reason I'm opposed to four-sided triangles; it's a contradiction in terms. It might be socially desirable to allow gays to couple for life--although, given the state of marriage under our no fault divorce laws, this may only amount to a handful of years--but that does not make a marriage. This ruffles the feathers of fascist Americans, which is to say, almost all Americans, for whom the State decides all, but it shouldn't be a hard point to comprehend. Marriage antedates the State and will continue to exist once our present form of government has crumbled. The State cannot alter that which is outside it. It may say whatever it wishes, but allowing gays to get "married" makes no more sense than allowing triangles to have four sides.
The common rejoinder here is that homosexuality is a part of history. Yet, while this is undoubtedly true, one searches in vain for a record of gay marriage. There was ample romance between two men, or two women, but nothing like gay marriage. I will go further and note that in my research--spotty and haphazard--I can find no indications that gays defined themselves according to their homosexuality as they now do. Almost all were bisexual. Think of the Spartan soldiers, or Eveyln Waugh at Oxford. Until recently, a predilection for buggery was something one grew out of.
That said, as a libertarian, I have no problem with gays wishing that their partners be allowed to visit them in the hospital, covered under the same healthcare plans, and so forth. These disputes are not a matter for the State. Let hospitals liberalize visitation rules, let insurance companies write policies for gay couples; in short, let the market meet consumer demand.
Now then, what are the political implications? Support for gay marriage is less a right-left issue than it is an old-young one. True, progressives are more likely to support gay marriage, and conservatives are more likely to oppose it, but gay marriage referendums have been soundly defeated each and every time the voters have had their say. Despite the fact that the country is moving left, the populace as a whole still opposes gay marriage. That said, few American younger than thirty seem to care enough to oppose it. My sample is distorted; most of my companions are college graduates, but I think my supposition is largely correct.
Years of being told of the magical powers of gays have caused our youth to refuse to man the Christian defenses. It's tempting to blame them, but it's really the fault of the idiot boomers for sending their children to public schools. What on earth did they expect to happen?
Barry is either misreading the tea leaves or hoping to secure the youth vote without frittering away oldsters who might otherwise deflect to Romney. I suspect he has misjudged, though, based on the jubilant Facebook posts of my contemporaries, gay marriage is the greatest thing since sliced bread--locally grown of course. Unless Barry is simply bored and wishes to lose, we'll know how his move polled based on whether he draws attention to his position or backs away from it like a Reverend Wright sermon.
One last point. I see that my contemporaries cannot even fathom why gays might not be allowed to marry. I encourage them to think on the matter for a little while before insisting that every earlier generation was bigoted and wrongheaded to fail to grant something so obvious.
The reason functional States seek to sanction marriage is because it's an exceedingly valuable institution. It may prove similarly valuable to allow gays to marry; we simply do not know. But it's worth remembering that the health of our society is far more bound up with the vast majority of heterosexuals and the success--or failure--of their marriages than it is with the tiny percentage of homosexuals and their couplings. Even if every gay in America gets married and remains in that state, it won't make up for the horrors divorce and cohabitation have wrought on the American family.
Saturday, May 05, 2012
Strategic error
Talk radio is awash with blowhards who seen to believe that one wins arguments by shouting more loudly than one's opponents. Dennis Prager is a noble exception to this general rule. I don't often listen to his program anymore, but I still read his pieces from time to time. In his latest, he explains why the 2012 election is "the most important in our lifetime." Sadly, this is not the case.
He writes:
If Americans re-elect the Democrat, Barack Obama, they will have announced that America should be like Western European countries -- governed by left-wing values. Americans will have decided that America's value system -- "Liberty," "In God We Trust," "E Pluribus Unum" -- should be replaced...
The right, on the other hand, seeks to maintain America's values. Conservatives want to improve America, but, as its name implies, conservatism seeks to conserve, not transform.
There are two problems with this argument. The first is that while the left's rhetoric is not consistent with the values enshrined in our Constitution, the right governs within the same progressive tradition as their ostensible opponents. If Obamacare transformed our medical system--and I'm not certain it does, since so much of our healthcare system was Statist even before that incomprehensible bill was passed--then did not Bush's Medicare Part D Act similarly transform America? At best, Republicans accept and defend the amount of Statism we presently endure; more frequently, they increase the power of government while preaching the value of limiting its scope.
The second problem is related to the first. Defense is not an effective political strategy, and, at its best, conservatism is merely defensive. The strategy does not work because our present course is unsustainable. We cannot allow the State to continue to spend far more money than it collects in taxes--not that raising taxes would do much to solve the problem. Balancing the budget--to say nothing of paying down our debt--is politically impossible. The wonkish solution proposed by Paul Ryan, and endorsed by Mitt Romney, doesn't balance the budget for more than thirty years. Tinkering with the budget is simply not enough, yet this is all the right is advocating.
Let us suppose that Romney wins this election, and that the Republicans take back power in the Senate and retain it in the House--a best case scenario for Prager. And let us further suppose that they use this power, not to start a war with Iran, but to trim the deficit. Does any of this make it less likely that the next Democratic candidate will be able to transform America? In other words, does electing a Republican help in any way, save to buy us some additional time before we are again confronted with another Most Important Election Ever(TM)?
The answer is plainly, no. Conservatism may keep the wolves at bay, but it can not make it any less likely that they will attack at a later date. If things are as dire as Prager believes; if we are really this close to a progressive precipice, then a bolder strategy should be adopted. In order to make America secure against the forces of progressivism, all semblances of leftist governance must be extirpated. So long as a large number of Americans benefit from government largesse, Republicans will be winning battles to lose the war. The other advantage to eliminating a program in its entirety is that it is much more difficult to establish a program than to expand it. That said, the infernal Republicans had no trouble using hysteria over 9/11 to create another bureaucracy, the Department of Homeland Security, whose main goal, it seems, is to allow the TSA to frisk children and grandmas so as to provide security theater.
Returning to Prager:
Instead of asking, "Are you better off than you were three years ago?" Every Republican needs to ask, every day, "Do you want to fundamentally transform America?" If they do, Barack Obama is their man. If they don't, Mitt Romney is.
The reality is that American has been transformed already. Hence the better question to ask is: "How quickly do you wish the transformation to continue?" If you prefer that things proceed slower, Romney is probably your man. But do not confuse delay with prevention. The transformation continues apace.
He writes:
If Americans re-elect the Democrat, Barack Obama, they will have announced that America should be like Western European countries -- governed by left-wing values. Americans will have decided that America's value system -- "Liberty," "In God We Trust," "E Pluribus Unum" -- should be replaced...
The right, on the other hand, seeks to maintain America's values. Conservatives want to improve America, but, as its name implies, conservatism seeks to conserve, not transform.
There are two problems with this argument. The first is that while the left's rhetoric is not consistent with the values enshrined in our Constitution, the right governs within the same progressive tradition as their ostensible opponents. If Obamacare transformed our medical system--and I'm not certain it does, since so much of our healthcare system was Statist even before that incomprehensible bill was passed--then did not Bush's Medicare Part D Act similarly transform America? At best, Republicans accept and defend the amount of Statism we presently endure; more frequently, they increase the power of government while preaching the value of limiting its scope.
The second problem is related to the first. Defense is not an effective political strategy, and, at its best, conservatism is merely defensive. The strategy does not work because our present course is unsustainable. We cannot allow the State to continue to spend far more money than it collects in taxes--not that raising taxes would do much to solve the problem. Balancing the budget--to say nothing of paying down our debt--is politically impossible. The wonkish solution proposed by Paul Ryan, and endorsed by Mitt Romney, doesn't balance the budget for more than thirty years. Tinkering with the budget is simply not enough, yet this is all the right is advocating.
Let us suppose that Romney wins this election, and that the Republicans take back power in the Senate and retain it in the House--a best case scenario for Prager. And let us further suppose that they use this power, not to start a war with Iran, but to trim the deficit. Does any of this make it less likely that the next Democratic candidate will be able to transform America? In other words, does electing a Republican help in any way, save to buy us some additional time before we are again confronted with another Most Important Election Ever(TM)?
The answer is plainly, no. Conservatism may keep the wolves at bay, but it can not make it any less likely that they will attack at a later date. If things are as dire as Prager believes; if we are really this close to a progressive precipice, then a bolder strategy should be adopted. In order to make America secure against the forces of progressivism, all semblances of leftist governance must be extirpated. So long as a large number of Americans benefit from government largesse, Republicans will be winning battles to lose the war. The other advantage to eliminating a program in its entirety is that it is much more difficult to establish a program than to expand it. That said, the infernal Republicans had no trouble using hysteria over 9/11 to create another bureaucracy, the Department of Homeland Security, whose main goal, it seems, is to allow the TSA to frisk children and grandmas so as to provide security theater.
Returning to Prager:
Instead of asking, "Are you better off than you were three years ago?" Every Republican needs to ask, every day, "Do you want to fundamentally transform America?" If they do, Barack Obama is their man. If they don't, Mitt Romney is.
The reality is that American has been transformed already. Hence the better question to ask is: "How quickly do you wish the transformation to continue?" If you prefer that things proceed slower, Romney is probably your man. But do not confuse delay with prevention. The transformation continues apace.
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