I agree that a choice of discount rate is fundamentally important in this context. If you did the standard thing of choosing a constant discount rate (e.g. 5%) and used that for all downstream benefits, even ones millions of years into the future, that would make helping future generations substantially less important. By emphasizing the distinction between pure discounting and discounting as a computational convenience, I did not mean to suggest that views about how to discount future benefits were unimportant.
I was distinguishing between two possible motives for discounting that I think clarifies what the purpose of discounting should be. The two purposes are hard to disentangle because they overlap in practice, but I think they diverge when it comes to distant future generations. I can try to explain more if you haven’t understood what the distinction I’m intending is. It’s the difference between “Benefits now are better just because that’s what people prefer” and “benefits now are better because they cause compounding growth, future people will be richer, the future is uncertain, etc”. If you go for the second answer, the conclusion isn’t something like “use a 5% discount rate for all benefits, even ones a million years out”, but instead “use a discount rate that accurately reflects your beliefs about growth, uncertainty, marginal value of consumption, etc.” in the the distant future. For reasons I linked to in Hanson and Weitzman, that’s not what I expect. Briefly, constant exponential growth over million-year timescales is hard (but not impossible) to square with physics-imposed constraints on the resources we could have access to. And, as Weitzman argues, I believe uncertainty about future growth results in a form of discounting that looks more hyperbolic and less exponential in the long run. These differences are not very consequential over the next 50 years or something, but I believe they are very consequential when you consider the entire possible future of our species.
That last sentence would take more explaining than I have done in any work I’ve publicly written up, and it’s something I would like to get to in the future. I haven’t run into many people for whom this was the major sticking point for whether they accept the long-run perspective I defend. But if this is your sticking point and you think it would be for many economists, do let me know and I’ll consider prioritizing a better explanation.
Let me explain my position—first, I agree with rejecting a pure time preference, and instead doing discounting based primarily on expected growth in incomes.
For me, the expectation that in 50 years the average person could easily be twice as wealthy, leads to quite heavy discounting of investment to improve their welfare vs spending to alleviate suffering from extreme poverty right now.
It’s possible I haven’t thought this through thoroughly, and am explaining away my lack of enthusiasm for your choice of 5 causes to the neglect of the classic Givewell/GWWC choices. Perhaps there is something to do with efficacy there—that I’m unsure of the likely impact of funding immigration advocacy, forecasting, and more research.
I agree that a choice of discount rate is fundamentally important in this context. If you did the standard thing of choosing a constant discount rate (e.g. 5%) and used that for all downstream benefits, even ones millions of years into the future, that would make helping future generations substantially less important. By emphasizing the distinction between pure discounting and discounting as a computational convenience, I did not mean to suggest that views about how to discount future benefits were unimportant.
I was distinguishing between two possible motives for discounting that I think clarifies what the purpose of discounting should be. The two purposes are hard to disentangle because they overlap in practice, but I think they diverge when it comes to distant future generations. I can try to explain more if you haven’t understood what the distinction I’m intending is. It’s the difference between “Benefits now are better just because that’s what people prefer” and “benefits now are better because they cause compounding growth, future people will be richer, the future is uncertain, etc”. If you go for the second answer, the conclusion isn’t something like “use a 5% discount rate for all benefits, even ones a million years out”, but instead “use a discount rate that accurately reflects your beliefs about growth, uncertainty, marginal value of consumption, etc.” in the the distant future. For reasons I linked to in Hanson and Weitzman, that’s not what I expect. Briefly, constant exponential growth over million-year timescales is hard (but not impossible) to square with physics-imposed constraints on the resources we could have access to. And, as Weitzman argues, I believe uncertainty about future growth results in a form of discounting that looks more hyperbolic and less exponential in the long run. These differences are not very consequential over the next 50 years or something, but I believe they are very consequential when you consider the entire possible future of our species.
That last sentence would take more explaining than I have done in any work I’ve publicly written up, and it’s something I would like to get to in the future. I haven’t run into many people for whom this was the major sticking point for whether they accept the long-run perspective I defend. But if this is your sticking point and you think it would be for many economists, do let me know and I’ll consider prioritizing a better explanation.
Let me explain my position—first, I agree with rejecting a pure time preference, and instead doing discounting based primarily on expected growth in incomes.
For me, the expectation that in 50 years the average person could easily be twice as wealthy, leads to quite heavy discounting of investment to improve their welfare vs spending to alleviate suffering from extreme poverty right now.
It’s possible I haven’t thought this through thoroughly, and am explaining away my lack of enthusiasm for your choice of 5 causes to the neglect of the classic Givewell/GWWC choices. Perhaps there is something to do with efficacy there—that I’m unsure of the likely impact of funding immigration advocacy, forecasting, and more research.