The Price of Trading Future Obligations for Today’s Benefits

I’ve been listening to Mark Spitznagel’s The Dao of Capital, which is three parts philosophy, two parts history, and one part investing advice, so if you’re into that sort of thing and don’t mind the same concept hammered home in a dozen different examples across multiple categories, you will love this book. In the chapter about the concept of “time preference,” he uses a striking turn of phrase when talking about the reality of our future selves and distant descendants.

The symptoms of this affliction [referring to our culture’s extreme focus on the now, at the expense of the future] can be found in the chronically low savings rate in our culture, ranging from financial to even fresh water, soil, and of course forests. And analogously and most incredibly, governmental fiscal deficits that deviously and increasingly rob future generations, our helpless intergenerational forward selves.

A Moral Duty for Financial Responsibility

The first time I ran into this concept of a human being as a continuous being, simultaneously real across the span of his lifetime, was when reading about Kurt Vonnegut’s Tralfamadorians in Slaughterhouse-Five. They perceive time as existing all at once. In the book this produced a kind of passive, fatalistic philosophy. Since all that will be already is, there was no room for the idea of free will.

I don’t take that view, but the image from the book, of viewing time and the people in it the way you might look at a stretch of the Rocky Mountains, their past and future selves just as real as the present one, stopped me in my tracks. It puts the present, which always dominates our perceptions and emotions, into a new perspective. It echoes something Einstein used to say about looking at past and future as equally and simultaneously real with the present.

This is in a section where Spitznagel credits Austrian economist Eugen von Böhm-Bawerk with noticing this truth and applying it to economics, and his choice of the word “helpless” really leaped out at me. It is a word that for me instantly conjures images of the downtrodden people who it is our moral duty to help.

Suddenly the ideas of saving, investing wisely, delaying gratification, sacrificing in the now for something better later, becomes more than just a strategy for self-gratification for the far-sighted. It is a moral duty to a future self and to future others, people every bit as real as you are right now, but whose condition is completely at your mercy.

This idea is not so foreign to those who speak a language like Japanese or Chinese, where the verbs make no distinction between past, present and future. But for those of us raised on English, focusing more on the canoe than the river when thinking about time, this might be a jarring insight!

Studying Tradeoffs

Anyone wishing to change the world through politics has a duty to understand economics. As arcane as some try to make it, economics is really just the study of naturally occurring tradeoffs. It is a pair of binoculars we can use to survey the landscape of humanity's struggle against the material world to grow and thrive. The better we can see, the better we can navigate in that realm. Those who don’t will often do what seems right, but actually leads to destruction.

Böhm-Bawerk was right about the importance of time. Would-be reformers like some of the Democratic 2020 hopefuls would do well to pay attention to it. The systems we create today need to avoid creating crises later. Human affairs are unpredictable, but not hopelessly so. Through economics we actually can spot errors, learn from them, and plan to avoid them.

We today are the children of generations that traded future obligations for present benefits: borrowing to make finance payments, instituting a monetary system that slowly bleeds the value out of cash savings in order to boost the present buying power of the state, the list goes on. We live in a time of incomprehensible abundance and yet the young feel as if they have to build their lives on very thin margins.

Part of this, according to Robert Kiyosaki, is a failure to pass down financial wisdom, but there has also been a failure to respect the sanctity of our future selves and our distant descendants, all of whom are every bit as real as you are right now, even if they are not yet visible.

We cannot reach back to the past to ask for the guilty to restore what they took, but we can decide what to do with the world that we now have. According to Albert and Eugen, the future already exists. The people in it depend on us in the here and now to act in their interest.

No one else can.

This article is republished with permission from Rabid Quill. 

Benjamin J. Thompson

Benjamin Thompson is a software developer living in South Bend, Indiana. He ran a grassroots Ron Paul 2008 group and is currently the Indiana coordinator for the Libertarian Party Mises Caucus. You can also find posts by him at the AustroLibertarian.com blog.

This article was originally published on FEE.org. Read the original article.