The Size of the Social Unit: Time Preference

#economics #democracy #monarchy

An actor prefers goods sooner than later. Every action requires some amount of time to achieve any goal. Time is scarce. It must be economized. Time must be used to accomplish the highest value first. Therefore, goods are preferred sooner than later. It is impossible that it is any other way. If man were not constrained by time, Crusoe would build a fishing trawler right away. Or, man would choose the most productive process first, but this can’t be done without prior saving.

Crusoe cannot have a high time preference. If he ate all of his fish right away, he may never build a fishing pole or net. He must have a lower time preference. Otherwise, he will not last long. Now, Crusoe knows he needs a lower time preference to survive. He must consume less than he catches, or engage in saving. What do you suppose is the time preference for a democratic politician? Or, any who will be in office for a term?

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