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Tyler Cowen’s new book, Stubborn Attachments, says many things. But his main claims are, roughly, 1) we should care much more about people who will live in the distant future, and 2) promoting long-run economic growth is a robust way to achieve that end. As a result, we should try much harder to promote long-run economic growth.
Now I don’t actually think his arguments are that persuasive to those inclined to disagree. On 1), the actions of most people suggest that they don’t actually care much about the distant future, and there exist quite consistent preferences (including moral preferences) to represent this position. (Also, I have to wonder how much Tyler cares, as in the 20 years I’ve known him I’ve often worked on distant future issues, and he’s shown almost no interest in such things.)
On 2), while Tyler mainly argues for econ growth by pointing to good trends over the last few centuries, many people see bad trends as outweighing the good, and many others see recent trends as temporary historical deviations. Tyler also doesn’t consider that future techs which speed population growth could cut the connection observed recently between total and per-capita growth; I describe such a scenario in my book Age of Em.
Tyler being Tyler, he is generally vague and gives himself many outs to avoid criticism. For example, he says that rights should take priority over growth, but he doesn’t specify those rights. He says he only advocates growing “wealth plus” which includes any good thing you could want, so don’t complain that growth will hurt a good thing. He notes that the priority on growth can justify the usual intuition excusing limited redistribution, but doesn’t mention that this won’t at all excuse not doing everything possible to promote growth. He says he isn’t committed to econ growth being possible forever, but only to a finite chance of eternal growth. Yet focusing all policy on trying to increase growth within some tiny-chance eternal growth scenario is overwhelmingly likely to seem a huge mistake later.
However, as I personally happen to agree with his main claims, at least the way I phrased them, I’d rather focus on their implications, which Tyler severely neglects. The following are the only “concrete” things he says about how exactly to promote long term econ growth:
For some more concrete recommendations, I’ll suggest the following: a) Policy should be more forward-looking and more concerned about the more distant future. b) Governments should place a much higher priority on investment than is currently the case, in both the private sector and the public sector. … c) Policy should be more concerned with economic growth, properly specified, and policy discussion should pay less heed to other values. … d) We should be more concerned with the fragility of our civilization. … e) We should be more charitable on the whole, but we are not obliged to give away all of our wealth. … f) We can embrace much of common sense morality with the knowledge that it is not inconsistent with a deeper ethical theory. … g) When it comes to most “small” policies affecting the present and the near-present only, we should be agnostic.
More “investment” and “growth”, that’s it?! We actually know of many more specific ways to encourage choices that promote long term growth, but they mostly come at substantial costs. I don’t how much you actually support faster long-term growth until I hear which such policies you’ll support.
Simple options include moving taxes away from investment and toward consumption. For example, eliminate taxes on bequests. We might even subsidize investment. If successful, such policies will naturally result in much more wealth inequality; are you okay with that?
We might also more strongly promote innovation. For example, we could subsidize it or more directly pay for it. We might less protect dying industries and firms against newcomers, and make it easier for all firms to fire failing workers. We could impose fewer complex regulations that make it hard to change business practices. We could make international treaties to better coordinate our promotion of innovation across nations, such as perhaps via stronger intellectual property rights.
Today in the US, the House takes a shorter view than the Senate, as House members are elected every two years while Senators are elected every six years. And they all take shorter views just before an election. So to promote longer term political views, we could give elected representatives longer terms. Maybe twenty year Congress terms. Would presidents for life actually be a good idea?
As Tyler notes, most people discount the future much less when comparing one distant future date to another. And so one way to get more future oriented choices is to let people commit more way ahead of time, while they still have long views. That is, have law enforce more longterm commitments. This can include stronger marriages wherein divorce is harder, and non-compete clauses and other terms that make it harder to leave jobs. We might even revive ancient practices like oaths of fealty, letting parents commit their kids to particular life choices, and letting people sell themselves into slavery. Are you okay with these?
Tyler says free markets naturally neglect future people:
When it comes to non-tradable and storable assets, markets do not reflect the preferences of currently unborn individuals. The branch of economics known as welfare economics holds up perfect markets as a normative ideal, yet future generations cannot contract in today’s markets. If we were to imagine future generations engaging in such contracting, current decisions might run more in their favor. Circa 2018, the future people of 2068 can’t express their preferences across a lot of the choices we are making today, such as how rapidly to boost future wealth or how much to mitigate the risk of serious catastrophes.
This is wrong, and is like saying that car firms neglect car customers because they don’t consult each one when designing new cars. It is enough that car firms can roughly anticipate the distribution of customer preferences, even if they don’t consult each one ahead of time. Similarly, one can make deals with future people by creating organizations today that will be empowered to offer deals later to future people. For example, you might give money to an organization to invest and then later pay people to hold an event wherein they celebrate your life. This deal can work even if you and they are never alive at the same time.
The main problem is that law has placed many obstacles explicitly designed to prevent the “dead hand of the past” from controlling current choices. For example, the terms in wills are greatly limited. Many advocate adding even more obstacles. Which greatly limits the kinds of deals that people today can make with future people. People today would save more to support deals with future people if they were more free to set the terms of such deals. And that would make future people matter more today.
An important special case is the possibility of creating very long lived organizations that spend little and mostly reinvest the returns on their assets. If we let people create such organizations and didn’t severely steal from or tax them, the fact that investment rates of return can typically exceed economic growth rates implies that their assets held could grow as a faction of world assets, up until they came to own most world assets, and controlled the allocation of most world investment. From that point on their holdings would continue to grow and drive down market rates of return, in effect making the future matter more to investors.
Anticipating this sort of scenario, laws have created things like the “rule against perpetuities”, to make it hard for organizations to grow by reinvesting most of their asset returns. Law has thus gone out of its way to prevent the natural tendency of free markets over the long run to create lots of capital and low rates of return on capital, which would make future people matter a lot more. Are you willing to let such long-lived autonomous investment organizations grow and come to dominate and control most world investment, including most real estate, inducing housing, and most firms, including most jobs? Even if they are not accountable to anyone else and yet their preferences also carry a lot of weight in political systems?
So who is persuaded to adopt these many policies to create longer views, to make distant future people matter more? Will you endorse no taxes on savings including bequests, no protection of out-of-date firms and jobs, only simple and flexible regulation, strong worldwide intellectual property, presidents for life, parents committing kids, selling yourself into slavery, and complete freedom of the terms of wills, including allowing long-lived investment orgs that control most world asset use? Or will you declare that all these options somehow violate someone’s rights? Or will you admit that while it sounded good to talk about caring for future people, once you realize the costs you’d rather keep the usual policies, and toss those future folk under the proverbial bus? After all, what have future folk done for us lately?
Added 10:30p: Radical life extension would also be a way promote a longer view, if it were feasible. I’m skeptical about feasibility for bio-humans anytime soon, but eventually when ems are feasible they automatically allow very long lifespans, and give long views for sufficiently slow ems.
Added 26Nov: Tyler responds on Twitter saying, “Much of your list I am already on record as endorsing” though “President for life, lots of evidence that would be bad.” But he won’t say more because “One purpose of the book is to get readers away from obsessing over particular policies and to think at broader levels.”
Added 27Nov: To be clear, I’m not claiming that application of wills, perpetuities, commitments, or long-lived orgs will immediately promote the long run on average. It is more than allowing search in these larger spaces has a much better chance of finding ways to promote the long run, and that eventually such things will be found and used.