Pursuit of Truthiness

my gut tells me I know economics

I time-traveled here from 1987 to say: You future people like weird things

with one comment

(Continuing from my previous post, Does the  idea of sustainability survive sustained inquiry?)

Sustainability means preserving good things for future generations.  But as Bob Solow notes, we have no idea what the preferences of future generations are; we are likely to think they are weird.  After all, if someone in 1800 were trying to make people in 2009 better off, what would they do?  Burn less coal?  Would these 2009 people prefer to have more cities, or farms, or picturesque villages, or wilderness (but who likes wilderness? We haven’t had a romantic movement yet, and Thoreau hasn’t even been born)? Certainly we would leave them better off by exterminating dangerous and destructive animals like tigers and wolves.  And we are going a great service to future generations by spreading Christianity and civilization to the backward tribes of the world!

Clearly, it would be pretty hard for a well-meaning person in 1800 to do the right thing from our perspective.  Presumably, the future is also pretty hard for us to figure out.  Solow wisely notes this, then promptly ignores his own advice.

Most blatantly, he says that “control of population growth would probably be the best available policy on behalf of sustainability.”  If he is considering the average utility of the members of future generations then this is at least plausible, although I would not bet on it as the best policy to please weird future people.  But if he is considering the total utility of future people (as I think is proper), then then this is probably nonsense.  A future with 10 billion people will have more happiness than a future with 9 billion people unless those additional people push the world over into famine and resource exhaustion, which seems to me at least highly implausible.  And total utility is the right measure, because considering average utility leads to even more serious moral problems than utilitarianism generally; for instance, it implies that we should euthanize depressed people, or taken to its logical extreme we should euthanize everyone but the happiest person on earth.

But this is an isolated case of Solow being wrong.  Now for the more general theory of his wrongness.  He notes rightly that it is hard to know whether future generations would prefer for us to invest or to preserve the environment, since both are likely to benefit them.   The problem is that he then asserts that both should be categorically superior to present consumption, which can only benefit the current generation.

This disdain for current consumption is at best an oversimplification.  First, we need to distinguish the consumption of non-renewable resources from all other consumption.  In general, this is the consumption that actually makes future generations worse off (by eliminating resources they could have used), and Solow’s idea to count it is a good one (we could subtract the consumption of nonrenewable resources from total GDP to get a measure of “sustainable GDP”, just as economists have sometimes tried to separate out GDP generated from the depreciation of the capital stock).  In some special cases, of course, this consumption could still benefit future generations: the technologies developed for mining are applied more generally, or if today’s resource becomes tomorrow’s nuisance (invasive species?), or if the byproducts of consumption are actually beneficial (say, if future people like a warmer earth then they would appreciate that our consumption lead to CO2 emissions [there is probably a better example of this idea]).

But most consumption does not involve (at least directly) the use of nonrenewable resources.  If I consume a lot of perishable, rival goods like corn or trees, people in the future could simply grow more.  This sort of consumption is something people in 100 years would, in most cases view neutrally.

Most interestingly, there is the consumption of non-rival goods.  Will people in 100 years be worse off because I read too many books, or watched too many movies, saw too many plays, listened to too many concerts?  Not at all.  In fact, to the extent that such consumption encourages the creation and preservation of such non-rival, not-very-perishable goods, it actually benefits future generations! Again of course there are exceptions, many people in the 20th century would have been better off if Lenin et al hadn’t bought Karl Marx’s books, and it is hard to imagine much current music being of any benefit to future generations.  But in general the consumption of art and writing can be of great benefit to future generations.

Back to the general theory.  Think of someone living in Athens in the golden age of Greece.  What could they do to be of most benefit to future generations?  Solow suggests that we would value their environmental protection and their investment.  Well, I certainly don’t mind that they invested; I’m sure they enjoyed operating capital-intensive olive oil businesses.  I suppose it is good that they protected their environment, though I might enjoy Greece more if they had turned more non-renewable marble into buildings and statues.  But what I, weird future-person, value most from average ancient Greeks is their consumption- the fact that there was a market for Plato’s dialogues, Aristophanes’ plays, and Herodotus’ histories.  This same applies to Renaissance patrons of the arts, classical concert-goers, the book-buying public of the Enlightenment and the modern era.

In a way, I suppose this blind spot for the incredible power of ideas, information, and other non-rival goods should be expected from Solow, whose namesake growth model sees technology as exogenous!  But given that the development of ideas and technology really does depend partly on the knowledge that people will pay to consume them, I am glad that people in the past undertook that consumption and left us with the treasure trove of ideas we have.

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Written by James Bailey

September 4, 2009 at 8:59 pm

One Response

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  1. […] pollution and consumption can be sustainable because future generations will probably be richer and we aren’t sure how much they will value our actions.  In finance terms, this is like taking out loans instead of saving because you think your income […]


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