Posterity Review Comes Cheap

Compared to most people, academics care more about what posterity will think of them.  And academics tend to be overconfident, believing posterity will remember them better than most.  Also, the magic of compound interest rates makes the current price to get posterity to review current academic work remarkably low.  For example, at a real interest rate of five percent, one hour of work today will buy 130 hours of equally productive work in a century, and over 17,000 hours of such work in two centuries.   

Combining these observations, a relatively cheap way to improve the incentives of academics today could be pay to have posterity publish a careful historical review of today’s research.  Imagine that for each academic paper written today, we paid one minute of time now to buy 300 hours of evaluation at a future date (e.g., two centuries later at five percent interest).  Looking at all available records, including web, email, and voice records, and looking together at groups of related papers, this future evaluation would estimate the relative accuracy and valued added of each contribution relative to resources used, carefully tracing out where these insights came from and where they led.

Posterity review would seem to have a much better chance than peer review of figuring out who stole what ideas from who, who contributed real useful insight instead of showing impressive ability with words or math, and so on.  And once we knew that such review would take place, we could create many interesting forecasting mechanisms and reward schemes today, tied to those future evaluations. 

Of course there are crucial problems to work out regarding how to organize these future historians and give them the proper incentives.  But these seem like problems well worth thinking about. 

GD Star Rating
Tagged as: ,
Trackback URL:
  • michael vassar

    Well, real risk-free rates of return seem to be closer to 1% than to 5%, while long-term real GDP growth rates are about 2.1%, so a “risk free” investment, even assuming that it was really risk free, would buy fewer hours in the future than today. Any expectation of a 5% return over 200 years seems to rely upon the equity premium remaining at it’s historical level, which implies, strictly speaking, that equities are still very under-priced. Do you believe that the SNP should rationally be trading at >10x it’s current price? An alternative hypothesis is surely that the one hour today buys an expected utility equal to one hour in the future but with much uncertainty. What fraction of large fortunes from 200 years ago are still intact? What fraction of companies still exist? How about from 100 years ago? 300?

  • I see no reason to ask for risk-free returns. It is all right if there is some chance that the investment will not get sufficient returns to pay for the posterity review, as long that chance is not correlated too much with the quality of the research being reviewed.

  • michael vassar

    Yes, but is it all right if there is only a very small chance that the investment will be able to pay for posterity review. The size of the market risk premium can be interpreted as a Bayesian estimate that the probability of an investment paying-off in the long term is surprisingly low.
    Alternatively, one might rationally assert that the market is likely to return at a positive rate but that the market risk premium and therefore expected return in the future is likely to be low.
    The third option is to assert that markets are simply very irrational with respect to long-term prediction, and to prefer crude induction from a single data point (market returns over the last century) over the market’s implicit prediction when estimating future returns.

    This discussion fairly closely parallels aspects of the debate over investing social security in index funds. Either the markets are riskier than history indicates or their expected return is lower than historically typical returns. All of this also obviously ignores the risks associated with any foundations of this sort simply not fulfilling their nominal function due to conflicts of interest, for instance, by paying high fees to their managers.

  • Many people are motivated to do good work in this life because they believe that after they die God will judge them. You are trying to create a motivating afterlife judgement mechanism that academics will believe in.

    • gwern

      It’s a better afterlife, actually. Contemporary academics could observe the posterity reviews of past academics. Would-be martyrs and saints cannot observe the heavenly rewards of dead believers.

  • Michael, many academic institutions, such as universities, have survived for many centuries. Of course future returns could possibly be lower than past returns, but I’d be pleased if that was the worst problem with my proposal.

  • Telnar

    The market risk premium considers the needs of many participants who are predominantly investing for the short or medium term. I think that there is every reason to expect that an investor with a time horizon of 2 centuries (and the ability to set up a diversification strategy which will run automatically, so that he isn’t forced to commit to a view about what the world economy will look like over 200 years) will be able to have an expected return far better than the risk free return.

  • michael vassar

    It seems clear that no organizations have increased their savings by 17,000-fold where value is measured in terms of wages for a given level of education via a “buy and hold diversified investments” strategy.

    It also seems clear that both US returns and 1807-2007 returns are non-representative of global and historical returns respectively.

  • michael vassar

    As far as I can tell, the first six paragraphs of this
    still hold.

  • billswift

    With technological growth as it can reasonably be expected in the near future, anyone who projects anything past about fifty years is grabbing the short end of the cattle prod.

  • Tyler Cowen

    This, of course, is Bentham’s Auto-Icon proposal, writ small. He wanted to preserve and prop up and publicly display corpses, so we would know that people in the future are always thinking of us…

  • Tyler, perhaps it is Brin’s transparent society, writ academic. 🙂

  • Stuart Armstrong

    There is a sort of posterity review going on for the moment: species are being renamed and re-classified as DNA evidence reveals how reliable or unreliable the previous classifications were.

    Since a lot of these species are named after their discoverers, their names are being banished from posterity if the specie isn’t well defined. So (current) posterity is reveiwing the classification work, and banishing those whose results don’t stand up.

    This sort of reclassification has been going constantly on for centuries now. So the scientists naming critters after themselves would be aware that their names would survive only if they did their jobs properly.

    Has this had a beneficial or detrimental effect in the field? I’m not sure I can say, but this is an example Posterity Review, so should be looked into.