Stubborn Attachments: A Vision for a Society of Free, Prosperous, and Responsible Individuals

by Tyler Cowen

Robert E. Lucas, Nobel Laureate in Economics, put the point succinctly: “The consequences for human welfare involved in questions like these are staggering: once one starts to think about [exponential growth], it is hard to think about anything else.”16

Extra wealth also serves as a cushion against very bad events, or at least against later declines in wealth. Ten or fifteen years ago, it was common to hear the claim that once a nation reaches the level of material wealth found in Greece, happiness more or less flatlines. Indeed, this was more or less where the flatlining point seemed to be. Yet since the Greek economic crisis, dating from 2009, no one uses the Greek example to make a point about the flatlining of the happiness-income relationship. The country lost almost a quarter of its economic output, unemployment has risen to over twenty percent, there have been riots in the streets, a neo-Nazi party was elected to the legislature, and at times basic medicines have been unavailable. Having some additional reserves of wealth prior to the crisis would have helped the country a good deal, and might have prevented the troubles altogether by easing debt repayment.

Why should costs and benefits receive less weight, simply because they are further in the future? When the future comes, these benefits and costs will be no less real. Imagine finding out that you, having just reached your twenty-first birthday, must soon die of cancer because one evening Cleopatra wanted an extra helping of dessert. How could this be justified?

For one thing, a lot of individuals, even in the future, probably won’t be wealthy at all, or at least they won’t be wealthy unless we do the right thing. In essence we are choosing their wealth through current policies (if we choose properly), so we should not assume their wealth as a justification for neglecting them.

Most of us should work hard, be creative, be loyal to our civilization, build healthy institutions, save for the future, contribute to an atmosphere of social trust, be critical when necessary, and love our families. Our strongest obligations are to contribute to sustainable economic growth and to support the general spread of civilization, rather than to engage in massive charitable redistribution in the narrower sense. In the longer run, greater economic growth and a more stable civilization will help the poor most of all.

The current political opinions of social scientists do not always match up with these conclusions. Many advocates of greater state spending—especially non-economists—seem to like the idea of a very low discount rate. Many of these individuals would like our government to devote more resources to education, to infrastructure, and to improving the environment, all positions associated with the political left overall, at least in the United States. They see a lower discount rate as supporting all of these policies. Yet they also tend to favor redistribution, even when such policies conflict with economic growth. In this sense the political left does not have a consistent attitude toward the importance of the future. Many thinkers on the right suffer from the opposite inconsistency. They often favor market-based discount rates, which are relatively high, but when the topic is redistribution, they worry much more about the longer-term consequences.6

It would be fair to say that King did the right thing in choosing to pursue higher ideals rather than playing golf all day, even though he lost his life in doing so. The same can be said of Gandhi. Nonetheless, such obligations to sacrifice cannot be universal or near-universal. If we all went around sacrificing our own individualistic pursuits to an extreme degree, there would be no civilization left to advance. As we saw earlier, it is more sensible to reject collective sacrificial recommendations that will lower the rate of sustainable economic growth.