Some Bad and Better Reasons why Time Preference Must Always be Positive
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Igor Wysocki
Abstract
The purpose of the present paper is to ground the alleged universal law of (positive) time preference. Thus, we take the said positivity of individual time preference rates for granted. However, we also take pains to show that some other time preference rates (even negative ones) are conceivable only providing that ceteris paribus clause is not satisfied. All in all, we cannot but admit that the intuition standing behind the apparently necessary positivity of time-preference rates is quite robust. However, little effort has been made to justify it. For example, in Austrian economics, it is said that positive rate of time preference is somehow implied in the concept of human action. Yet, no demonstration to that effect is forthcoming. In this essay, we are trying to approximate what could serve as a best reason to believe that individual time preference rates are indeed positive. We first consider whether a phenomenon of social interest rates is able to ground the positivity of time preference. Having rejected this apparent solution as circular, we analyse whether a case can be made against non-positive rates of time preference as unjustified under any set of relevant beliefs. This attempt is also rejected, as there seems to exist a relevant belief under which a rate of time preference can rationally be zero. Finally, we appeal to the Parfitian reductionist view on personal identity as allegedly capturing necessarily positive rates of time preference. Here we note the crucial fact that psychological connectedness (something at least partially constitutive of personal identity) between person P at some time and the same person at some other time diminishes as the interval between these two times increases. Finally, this very fact appears to neatly explain the positivity of time preference.
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