Re: Market failure to sufficently weigh the future

From: Robin Hanson (
Date: Wed Nov 01 2000 - 15:56:40 MST

At 01:17 PM 11/1/2000 -0800, you wrote:
> > >But isn't it relevant that changing society's discount rates may be
> > >harmful? Or is that simply off topic for this paper?
> >
> > Harmful in what sense? Making people choose actions that are less adaptive
> > means making them choose actions that lead to fewer descendants. The paper
> > is about what actions better satisfy the preferences of the people
> involved,
> > whether that leads to more or fewer descendants.
>All an evolutionary argument tells us is that changes in the discount
>rate would ultimate lead to less survival and, yes, fewer descendants.
>This may be due to increases in the death rate or decreases in the birth
>rate. Do we want to ignore the fact that a policy prescription may lead
>to increases in the death rate? Even if it acted through decrease in
>birth rate, that may be due to poorer health.
>I keep asking the same question, which is, why is it OK for the paper
>to ignore these effects?

I think you are missing the fundamental point that standard policy analysis
is a lot more libertarian than you expect. It doesn't ask what policies
are good for people in some absolute sense, it asks what policies will give
people the things that they want. If people are willing to suffer risks
of death to get, say, fun, then standard policy analysis wants them to
take such risks.

>Isn't it possible that the society which results from making all these
>changes, even though they are intended to satisfy people's preferences,
>is one in which people are less happy than they would have been without

As Nick emphasized, standard policy analysis isn't about what makes
people happy, its about giving people what they want. And the fact is
that people don't just want to be happy. They are willing to give up
happiness to get other things.

Robin Hanson
Asst. Prof. Economics, George Mason University
MSN 1D3, Carow Hall, Fairfax VA 22030-4444
703-993-2326 FAX: 703-993-2323

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