Pun Salad

A short book, a mere $9.99 for the Kindle version at Amazon, and there's a nice feature: the author, Tyler Cowen, pledges to donate the receipts from the book to "Yonas", an Ethiopian tour guide he befriended during a visit. That was enough for me to cough up for the Kindle version instead of raiding the UNH library.

Tyler's pitch is for making economic growth, constrained by a healthy respect for individual liberty, our primary social goal. There are a few asterisks on that: he's really talking about the growth of "Wealth Plus", which factors in the values of sustainability, environmental quality, and leisure. Given that, though, he notes that the difference between (say) sustained 1% annual growth vs. 3% may seem trivial over the course of a year: $100 becomes $101 instead of $103. But after 100 years, it's $270 vs. $1921. (Assuming I can still do the math correctly.) Can you really deny your ancestors the benefit of that additional wealth?

Well, maybe. There's a possible counterargument: would you rather have $100 today or $100 next year? Obviously, today, amirite? Time value of money. So future-money is worth less than today-money. Doesn't that say we should be optimizing the here-and-now rather than the hazy future? Tyler makes a meticulous argument that it's not relevant; carrying things to their logical conclusions quickly run afoul of common-sense morality. (Similar arguments apply to running the thought experiments backwards in time; a $100 wrong done to someone in the past rapidly grows to vast sums today. Again, common-sense morality rejects the conclusion.)

Finally, how do we incorporate uncertainty into the mix? How can we take any actions today that will (almost certainly) have unforeseen consequences in the near or far future?

Tyler's book is a fine example of mixing philosophical and economic arguments. I was probably not as skeptical as I should have been; when it comes to arguments for prosperity, responsibility, and rights, those arguments are pretty much pushing on an open door.