Can someone explain/point me to useful resources to understand the idea of time preference as expresed in this post? In particular, I’m struggling to understand these sentences:
This suggests that near the center time preference has increased to the point where we’re creating scarcity faster than we’re alleviating it, while at the periphery scarcity is still actually being alleviated because there’s enough scarcity to go around, or perhaps marginal areas do not suffer so much from total mobilization.
I also don’t understand why having an internal rate of return of 10% is evidence that we’re in an emergency state of mobilization (relative to the hypothesis that managers are poorly incentivized to do long-term planning for other reasons).
IRR, discount rate, and effective time preference are really the same thing as expressed in related domains.
That makes sense to me, but unfortunately I’m no closer to understanding the quoted passage. Some specific confusions:
What’s the link between death rate and time preference? My best guess is that declining life expectancy implies scarcity, but I also don’t get....
the link between scarcity and time preference? My best guess is that high time preference means people don’t put the work in to ensure sufficient future productive capacity, but that doesn’t help me understand the quote so I think I’m missing something.
I get why emergency mobilization increases time preference, but not why high time preference is strong evidence of emergency mobilization (as opposed to other possible explanations)
Declining life expectancy suggests a general increase in scarcity. If the processes around you are trying to make things more scarce for you rather than less, then you’re in something more like a conflict relation than a trade relation to them, and delayed gratification is much less feasible in wartime or other emergencies where you’re likely to die if you don’t get something done NOW.
What are the competing explanations for high time preference?
A better way to phrase my confusion: How do we know the current time preference is higher than what we would see in a society that was genuinely at peace?
The competing explanations I was thinking of were along the lines of “we instinctively prefer having stuff now to having stuff later”