Ancestor Worship is Efficient
Maybe not “worship” exactly, but at least great respect and deference. By “efficient” I mean that it increases economists’ standard “cost-benefit” concept of welfare. That is: as usually estimated, the benefits of deferring greatly to distant ancestors far outweigh its costs. And while this does suggest that we should defer more to ancestors, it also shows just how much distorted prices can break economists’ favorite tools.
The economic welfare of a proposed change is the benefits minus the costs of that change, translated into cash terms, though of course changes don’t have to actually be cash transactions. When available, market prices are commonly accepted as estimates of the benefits and costs of things gained and lost. Economic welfare is a powerful heuristic for finding win-win deals: in many kinds of situations, the strategy of consistently making the changes that increase economic welfare tends to be usefully close to an actual win-win deal that gives most everyone more of what they want.
The efficient ancestor worship problem arises from two key facts:
Economic welfare cares not about giving people experiences but about satisfying their preferences, i.e., giving them what they want. And even long dead people still have (or “had” if you prefer) preferences that we could now better satisfy. If we do something a dead person would have wanted, that counts as a benefit.
At standard market interest rates, the magic of compound interest quickly gives astronomical priority to the preferences of folks who lived long ago. For example, in historical records near risk-free interest rates (e.g., land rents over prices) consistently exceeded 9%/yr from 3000BC to 1350AD, for a total factor of over 10162.
Together, these facts suggest we would increase economic welfare if we spent less than 10162 dollars today to do anything for which a 3000BC ancestor would have been willing to pay a dollar (equivalent in their currency).
Clearly we would quickly bankrupt ourselves if we tried to implement such “efficient” changes, and doing so would not be remotely close to a win-win deal with our ancestors. What goes wrong here?
Our contract law system refuses to enforce many win-win deals between distant generations. Many folks would be willing to create trusts that accumulated funds long after their death and then paid distant descendants (perhaps indirectly) to do things like remember their ancestor’s name, pray to his gods, etc. Unless stolen, such funds would eventually come to dominate the world economy and dramatically lower interest rates. With lower interest rates, economic efficiency would count the preferences of distant ancestors as far less valuable, and as a bonus businesses and governments would have far stronger incentives to attend to the interests of distant future folks, such as via global warming policies.
But we in fact refuse to enforce a great many such long term deals. For example:
The rule against perpetuities at common law … prevents a person from putting qualifications and criteria in his will that will continue to control or affect the distribution of assets long after he has died, a concept often referred to as control by the “dead hand.”
Our unthinkingly repugnance at being controlled by the dead, and our eagerness to grab their resources, prevents us from enforcing long-term win-win deals. This refusal to enforce deals increases interest rates, which distorts all our trade-offs across time, bringing economic welfare estimates into stark conflict with intuitive moral judgments about time trades (as in global warming), which then encourages people to turn to non-economic frameworks for policy analysis.
When policy distorts prices, it distorts calculation of economic welfare, which encourages people to ignore economic welfare when choosing policy, which reduces their reluctance to intervene to further distort prices, which leads to a sad spiral of increasing confusion. Please, let’s enforce long-term win-win deals!
Added: A fascinating alternate history might start from a year 1300 English legal precedent enabling flexible growing long term trusts. By 1800 early trusts grew a billion-fold, and trusts dominate the economy. What else changed?!
For those curious:
> "As recently as 1903, Pope Pius X was still able to tabulate the number of days' remission from purgatory that each rank in the hierarchy was entitled to grant: cardinals two hundred days, archbishops a hundred days, bishops a mere fifty days. By his time, however, indulgences were no longer sold directly for money. Even in the Middle Ages, money was not the only currency in which you could buy parole from purgatory. You could pay in prayers too, either your own before death or the prayers of others on your behalf, after your death. And money could buy prayers. If you were rich, you could lay down provision for your soul in perpetuity. My own Oxford College, New College, was founded in 1379 (it was new then) by one of that century's great philanthropists, William of Wykeham, Bishop of Winchester. A medieval bishop could become the Bill Gates of the age, controlling the equivalent of the information highway (to God), and amassing huge riches. His diocese was exceptionally large, and Wykeham used his wealth and influence to found two great educational establishments, one in Winchester and one in Oxford. Education was important to Wykeham, but, in the words of the official New College history, published in 1979 to mark the sixth centenary, the fundamental purpose of the college was 'as a great chantry to make intercession for the repose of his soul. He provided for the service of the chapel by ten chaplains, three clerks and sixteen choristers, and he ordered that they alone were to be retained if the college's income failed.' Wykeham left New College in the hands of the Fellowship, a self-electing body which has been continuously in existence like a single organism for more than six hundred years. Presumably he trusted us to continue to pray for his soul through the centuries.>> Today the college has only one chaplain* and no clerks, and the steady century-by-century torrent of prayers for Wykeham in purgatory has dwindled to a trickle of two prayers per year. The choristers alone go from strength to strength and their music is, indeed, magical. Even I feel a twinge of guilt, as a member of that Fellowship, for a trust betrayed. In the understanding of his own time, Wykeham was doing the equivalent of a rich man today making a large down payment to a cryogenics company which guarantees to freeze your body and keep it insulated from earthquakes, civil disorder, nuclear war and other hazards, until some future time when medical science has learned how to unfreeze it and cure whatever disease it was dying of. Are we later Fellows of New College reneging on a contract with our Founder? If so, we are in good company. Hundreds of medieval benefactors died trusting that their heirs, well paid to do so, would pray for them in purgatory. I can't help wondering what proportion of Europe's medieval treasures of art and architecture started out as down payments on eternity, in trusts now betrayed."
The cryonics comparison is disquieting; it's one thing when we're ripping off those stupid gullible theists...
Looks like Dynasty Trusts are back on the menu!https://www.nolo.com/legal-...