What economists call “time preference” is an underappreciated factor in the moral decay of society.
A stubborn paradox puzzled me when I was a kid: I wondered whether one could legitimately call Big Macs “good”. On one hand, I had been told again and again that they were unhealthy, designed to be addictive and environmentally suspect. Nevertheless, they tasted delicious and people flocked to buy them. At least according to the market, I concluded, Big Macs had to be “good”. But was that the whole story? After the issues shown in movies like “Super Size Me”, was it not best to see them as more ambiguous, a kind of “guilty indulgence”?
I gradually realized that a vast variety of similar products existed on the market, and the list grew to include everything from cigarettes to Facebook. In college, it became clear that the paradox had much to do with what economists call “time preference”.
It is a truism that people smoke cigarettes despite knowing that they cause a considerable decrease in life expectancy. At first consideration, this behavior seems illogical. But if you care much more about the “now you” versus the “you in twenty years”, then the behavior actually starts to make sense. Even more striking is if you don’t know what the cost of consuming a service will be in the future, for that ignorance will have you discount the future threat even more radically, leading to short-sighted decisions (just think of Facebook, where for now it’s fun, tomorrow you may realize what the cost of having been “the product” was).
The problem is that McDonald’s hamburgers, Facebook and cigarettes aren’t some strange anomaly. Instead, products exploiting our “temporal ignorance” are the norm, a “low-hanging fruit” for any business, a type of economic “externality” that they can have us, the consumers, pay for.
But this is just the tip of the iceberg; it becomes more ominous when you dig deeper. Ultimately, capitalism provides an ideal vehicle for selling off your future in exchange for the present. Consumption instead of education, entertainment instead of news and insight, the superficial instead of the difficult and profound, gradual resource depletion instead of conservation — seen through this lens, we recognize many of the issues plaguing contemporary society. Companies are selling us an “easy way out”, namely what we want in the “hedonistic”, “dopamine rush” short term, and we are addicted to buying.
What is the price of this Faustian bargain? Environmental degradation, unhealthy lifestyles, a decline in education and a worship of questionable idols (people who deliver our “fixes”: hedge fund managers, venture capitalists, programmers of socially problematic, but addictive apps) are just a few. The greatest cost, however, is a personal one, in the form of an “unexplored life”. We are born, we are entertained, we die. This, in my opinion, is the ultimate cost of the nearsightedness of our current system: by buying our cheap, prepackaged thrills while failing to grow as people, we become hedonistic, sick and powerless and we may not even realize why.
So what could be done to help this situation? The answer is not, in my opinion, to jump on the bandwagon and call for “the end of capitalism”. But regulation certainly helped with cigarettes, and it should be considered for Facebook as well. Pleading for government regulation may sound ominous to the libertarian in us, but really , it’s just finding consensus on what we as a society believe is an acceptable degree of control over our data by a corporation, and unfortunately, such decisions cannot be made on a solely individual level, because of the network effects (i.e. in some contexts, we cannot avoid using Facebook, if all our friends are using it to communicate and organize). Ultimately, however, government can’t solve the entire issue. Indeed, it is up to each of us to be aware of the transience and “cheap high” of many of the products on offer, and to get better at passing what psychologists call the “marshmallow test”, or “delayed gratification”.
Understanding the concept of “time preference” and building a resilience against dependency on short-sighted goods and services is a more profoundly moral exercise than it may first seem. In many ways, it is akin to the disciplining force of some religions, with a hell or heaven, informing our actions today through the threat of damnation, or promise of redemption, in a not-too-distant future.