Tuesday, 13 August 2013
Time Preference and Civilisation.
Two men live in a jungle. One has a low time-preference, the other a high time-preference. Both men require ten apples a day in order to survive, which they spend the whole of a day picking.
One day, both men independently come to the conclusion that if they could craft a special stick, that would make apple-picking so much easier, allowing them to pick twenty apples a day. However, the stick will take a whole day to craft, time they need to spend picking apples. Survival on nine apples a day is possible, but not without some discomfiture.
The high time-preferenced man, by definition, elects to avoid hunger and continues as he is. He spends the rest of his life solely engaged with picking and eating apples.
The low time-preferenced man endures a diet of nine apples a day for the next ten days, then spends the gathered ten apples on the day he crafts the stick. He now only needs to pick apples every two days to meet his apple needs. Then he realises he could do better with a shelter to keep the rain off, and spends every other day designing and building a shelter. With the shelter complete, he sleeps more soundly and feels more alert and inspired in the mornings. To express this inspiration, he whittles a flute...
The high time-preferenced man may desire and know how to build a shelter, or he may feel the need to express himself artistically, but regardless of his intelligence or innovation, he will never have the spare time or resources to build anything past his ten apples a day.