We Dont Donate To The Distant Future; Do We Care? Robin Hanson George Mason University.

We Don’t Donate To The We Don’t Donate To The Distant Future; Do We Distant Future; Do We Care?Care?

Robin HansonGeorge Mason University

Global Warming Discount DebateEconomists:

◦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 Franklin’s 200 year Ben Franklin’s 200 year giftgiftMost famous of US, Poor Richard’s Almanac1785 French satire mocked US optimism:

“Fortunate Richard” will left $ to pay in 500yr

Franklin left £1000 ea. to Philly, BostonD

ied 1790, funds grew, in 1990 paid 2.3,5M$, x

35, 76 inflation-adjusted gains1

.8, 2.2%/yr return, below market ratesNo known copy-cats – why, if we care?

Supply & Demand Of Supply & Demand Of InvestmentInvestment

Demand Supply

P

Q

amountinvested

interestrate

= projects could

invest in

= folks willingto save

Interest Rates ComponentsInflation – After correct, is “real” interest Default Risk – Stolen, taxed, not repaid Existential Risk – No one is thereRisk-Adjust – Want $ more in bad timesIncreasing Income – $ helps less if richerDiscount Rate – care less for future

folk◦Care less as future creatures differ more

Interest Rate HistoryLand rent, secured loans:Sumer/Babylon 20-25% 3000-1900BC,

10-25% 1900-700BC, 16-20% 600BCGreece 9-10% 600-200BCRoman Egypt 9-12% 0-300ADOttoman Empire 10-20% 600ADSouth India 15%, 900AD, >10%,1540England, Flanders, France, Germany,

Italy 9.5-11%, 1200-1350England 5-6%, 1400-1650, 4-5% 1650-

1850, 2-4% 1850-2000

Investment SecurityWealth buildups long a tempting target

◦At 5%: 1.05500 = 4x109, 1.055000 = 10105 !◦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 RatesAny 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 Help1. If many people act morally2. And if many of them believe:

1. Moral people care nearly-equally about distant-future folks (all else equal)

2. If care, then help if (utility) cost low, help big

3. Investing now to give later helps lots4. Investments don’t hurt others in

meanwhile3. Then many will donate to future

folkNo donors => no one acts moral and think future counts same?

Cost To Help Falls (e.g., 2%/yr)

No-Donate ExcusesLack idea, law, infrastructure; money offends

◦ Franklin showed howWe 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 HelpOther Ways To HelpKind act that influences future

insufficient◦Strong temptation to wishful thinking

Aid someone today, they might aid future◦But they usually don’t 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 EconomistsEconomic welfare ≠ moral good

◦Time-translate invariant rel. wt. => exp(±r*t)Infer what folks want from their acts

◦What they want can include moralityScale 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

Ancestor Whorship?

An Instructive AnalogyBig 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 timeMost $ to governments, projects, vs.

cash directly to poorHumans built to fake far concern while

really develop skills, network, keep control, be seen?

Two MindsTwo Minds

Near: few, detailFar: many, sparse

◦Categorize, analogizeSee Liberman & Trope Science 21Nov

‘08◦“Abstract/concrete”; distinct brain hardware?

Differing emphasis of decide vs. impressFar more for impress, & these decisions:

◦Talk, lead, control, moral/norm

NEAR

FAR

Near FarNear Farhere, 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;

SummarySummaryMarket interest rates give huge leverage

to help distant futureIf we cared in the slightest, we’d donateWe think we care, but we don’t donate

◦Franklin did, but to affirm US optimismExplain?: 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