Thursday, February 14, 2008

Time Constraints

I recently read an article by Kevin Kelly that seems to have relevance to my previous post "Perpetual Welfare and the Value of a Life". Here is the link:

I really respect Kevin Kelly and am currently sifting through one of his books Out of Control.

The point Kelly raises is that humans are bound by time. We don't have enough time to let evolutionary, bottom-up processes run their course. These evolutionary algorimths have a remarkable ability to find workable solutions to problems (maybe optimal but I don't want to go there). However, this process works over biological time. A human life is much too short to bear the fruits of the evolutionary process, therefore, some shortcuts and editing need take place.

The connection to welfare programs is the following. Sure, if we let the economy run with little or no regulation, no redistribution programs, and well-defined rights (such as property) the proper incentives should be in place. And eventually would expect a beautifully adaptive outcome to the incentives. But maybe we are working on different time scales here. Waiting for the "long run" does little good to current human populations.

So maybe a redistribution is necessary on some levels. For the poorest people may die without such distributions. Although, I really don't know. In the US it may be less dramatic. But nevertheless, those who are the result of poor luck in the lottery of birth will be subject to severe risks in comparison to those born wealthy. A system of no redistributions would provide the correct incentives and allow consequences for negative economic behavior to be fully felt. Also with no expectations of future redistributions individuals would be required to plan for the future. The economic pie would grow more quickly and diversely; wealth creating choices would be fully rewarded, wealth destroying choices fully punished. But to reach these optimal future conditions, significant current pain may be felt. Indeed, the current generation may be dead before we can fully grasp the benefits of such pure incentives.

I value the current generation more than future generations. Our lives seem to be more important than those that will come after us, perhaps due in part to the uncertainty of their eventual existence. And why should our society suffer for future society's benefit? Or more properly stated, why should some individuals' lives suffer in order to bring happiness to unknown and uncertain future individuals' lives? Its not just that the people are unknown, but on some level it is unknown and uncertain whether they will ever be born.

Usually, current and future generation's interests coincide. Pursuing wealth creation helps us now and creates a better world for future generations to be born into. But in this hypothetical case, current generation's interests suffer for greater future wealth creation.

However, the term "current generation's interests" is very misleading. It is really millions of individuals with unique interests. All these individuals are of different ages. None are really in the same "generation", where generation means that they share common interests. Therefore, it seems I am agruing out of a sense of justice more than anything. Just as I don't deserve to be born into luxury, other's don't deserve to be born into poverty.

Therefore, some level of redistribution seems valuable. Our human society would be better in the long-run if no redistribution exists, but an individual's life should not be sacrificed for future lives. In some ways there may need to be some accounting for the distributions in the lottery of birth.

That being said, intentions are different from effects. One may have the good intention to correct this unfair distribution, but the effects of trying to solve the problem may only worsen it. The specific methods should be subject to empirical testing. Specifically, public vs. private methods of redistribution remain debatable. Private alternatives may hold greater utility.

No comments: