The Case for Discounting the Future

Abstract

Though economists appear to discount future well-being when evaluating the costs of climate change, plausible justifications of this practice have not been forthcoming. The methods of economists thus seem to contravene the requirements of justice by discounting the moral importance of future well-being simply because it exists in the future. I defend the practice of discounting the future against the charge of injustice on grounds that moral theorists of different stripes can accept. I argue that, because public policy choices are ‘identity-affecting’, the probability that some policy choice will constitute a harm for members of a population diminishes the further we look into the future. This constitutes a plausible justification of discounting the future.

Acknowledgement

I thank Ryan Jenkins, David Boonin, and Simo Kyllönen for helpful written comments on earlier drafts of this paper. I also thank the participants and the Ethical Underpinnings of Climate Economics Workshop at the University of Helsinki for helpful discussion of the themes related to this paper.

Notes

1. Solomon, Qin, and Manning (2007).

2. Field et al. (2014, p. 12).

3. Carbon emissions stay in the atmosphere, on average, for one hundred years (Houghton, 2004, pp. 30–31).

4. Ramsey, ‘A Mathematical Theory of Saving,’ The Economic Journal, 38 (1928), pp. 543–559.

5. Dietz, Hope, Stern, and Zenghelis (2007, p. 134).

6. Dietz et al. (2007, p. 135).

7. Stern (2007, pp. 35–60). Dietz et al. (2007) includes an extensive defense of the Stern Review’s treatment of discounting.

8. The complaint of Dietz et al is likely directed at economists such as William Nordhaus (2008b), for example, who assign a higher value of 1.5 to δ.

9. Pigou (1920, pp. 24–30), Ramsey (1928, p. 543), Sidgwick (1981, p. 414).

10. Arrow (1999: 14).

11. Sunstein (2005, pp. 378–380) discusses this and other costs associated with abandoning the discount rate. Dasgupta (2014, pp. 394–416) echoes this view of Arrow’s.

12. Arrow (1999. p. 16).

13. Scheffler, The Rejection of Consequentialism (Oxford: Oxford University Press, 1994), p. 14.

14. Arrow, ‘Intergenerational Equity and the Rate of Discount in Long-Term Social Investment,’ IEA World Congress (1995), p. 17. Available online at: http://www-siepr.stanford.edu/workp/swp97005.pdf

15. Caney (2009a) and Parfit (1984).

16. Parfit (2011).

17. Dasgupta discusses these other considerations in Dasgupta (2008).

18. Broome (2012) and Kelleher (2012) offer clear discussions and critiques of existing justifications of discounting.

19. Gardner (2015).

20. Boonin (2008 and forthcoming) has argued for the conclusion that there is nothing at all morally objectionable about Wilma’s action.

21. Parfit calls this ‘The Origin View’ (1984, p. 352). I am sympathetic to a weaker version of The Origin View according to which our egg but not our sperm is essential to our identity at a possible world.

22. A number of contemporary ethicists have defended the counterfactual comparative account of harm in one version or another. See, for example, Feinberg (1974, 1984), Boonin (2008, 2014), Bradley (2009), Heyd (2009), Klocksiem (2012), Feit (2013), and Purves (2014).

23. Some will object to the use of judgments about cases in reaching normative conclusions on the grounds that work in experimental philosophy has established that our judgments about such cases are sensitive to social and cultural factors as well as ordering effects (e.g., Buckwalter & Stich, 2014; Machery, Mallon, Nichols, & Stich, 2004; Sinnott-Armstrong, 2008; Sinnott-Armstrong, Mallon, McCoy, & Hull, 2008; Weinberg, Nichols, & Stich, 2001). In other words, people from different cultural and social backgrounds have different moral judgments about some cases. If this is right, say philosophers engaged in the program of ‘negative experimental philosophy,’ then we cannot assume that the prevalence of a particular moral judgment entails that it is correct—it may be the product of our idiosyncratic social or cultural experiences. I am not assuming, however, that the fact that most will have a certain judgment about a case entails that the judgment is correct. I am making a prima facie argument in favor of the conclusions that I draw, and the fact that most will have a certain judgment about a particular case is a prima facie reason for those who have the judgment to believe that the judgment is correct, in the same way that our visual perceptions are prima facie evidence of facts about the external world. I am not attempting to convince those who do not have the relevant judgment about the case in question; that would be a fool’s errand. A prima facie reason can of course be defeated, given the presence of new or overriding evidence, but the existing literature in experimental philosophy offers no overriding evidence that would count against the prevailing judgments that most will have about the cases I discuss in this paper. In order to offer overriding evidence, one would need to do more than point to existing literature, which shows that judgments about some cases are sensitive to social and cultural factors. One would need to show that the judgments about the cases in question are sensitive to such factors. As long as our judgments about the cases in question are evidence in favor of a particular conclusion, then their use in my argument is warranted. It is also worth mentioning that I am using the well-established method of reflective equilibrium, whereby general moral principles are tested in light of our specific moral judgments. Defending the dominant method of moral theorizing is beyond the scope of my paper. Furthermore, the method employed by experimental philosophers seeking to undermine the use of judgments about cases in ethical theorizing might be self-defeating (Liao, 2008).

24. This case is inspired by Parfit’s own (1984, p. 71). See also Woollard (2012, p. 685) for a discussion of this point.

25. The example supports the counterfactual comparative analysis even though it may be the case that George acts wrongly by jumping either on Jane or Leroy. All that is needed to support the counterfactual comparative analysis is that George’s act would have been morally worse had he landed on the person with more good life to live.

26. Note that I am not claiming that non-counterfactual analyses of harm cannot yield the verdict that death is a harm. My point here is simply that any explanation of the harmfulness of death that does not appeal to the goods of which death deprives its victim will be incomplete. Because deprivation is a counterfactual comparative notion, a complete explanation of the harmfulness of death must appeal to counterfactual comparative harm. This implies that counterfactual comparative harm is indispensable, if we are to provide a full explanation of the harm of death.

27. Pebbles may have some legitimate complaint against Wilma, but the basis of this complaint cannot be that Wilma harmed Pebbles in a counterfactual comparative sense.

28. See Holtug (2001, 2010) for arguments that coming to exist can be worse or better than non-existence.

29. I have in mind accounts put forward by Matthew Hanser (1990, 2008, 2011), Elizabeth Harman (2004, 2009), Caspar Hare (2007), and Lukas Meyer (2003).

30. Parfit (2001, p. 290).

31. Broome (2012, pp. 61–62)

32. Dasgupta (2008) notes that a prioritarian justification of intergenerational discounting implies that we should also discount costs to wealthy members of the current generation compared with its poorest members. This implication is likely to be at odds with the attitudes of the world’s well-off individuals. My justification of intergenerational discounting notably avoids this unappealing implication of prioritarianism for intragenerational discounting.

33. See Parfit (1984, pp. 357–366 and 480–486); Broome (2012, pp. 61–62 and 144–153); and Hartzell-Nichols (2012, pp. 937–940 and 949–953).

34. Original emphasis. Parfit (1984, p. 486).

35. Minor changes in the mineral content of a municipal water supply are unlikely to affect most individuals’ reproductive behavior in a major way. Requiring citizens to use public transportation when commuting, on the other hand, may affect the timing of conceptions significantly.

36. Caney (2009a, p. 167).

37. Caney (2009a, p. 177–179).

38. Ibid: 177-179. The benefits enjoyed by future people will be non-comparative. Non-comparative benefits are simply those that it is good to have. They contribute non-comparative intrinsic value to one’s life. See Jeff McMahan (2009) for a helpful discussion of the distinction between comparative and non-comparative benefits.

39. See McMahan (2009, pp. 50–51) for an excellent discussion of the distinction between ‘impersonal value’, on the one hand, and ‘individual-affecting’ value on the other. One might think that Utilitarians are committed to counting the interests of present and future people equally, because they care only about impersonal value, but Jan Narveson (1967) and Boonin (2014) show that this commitment does not follow from standard Utilitarian principles. Classical formulations of Utilitarianism are ambiguous between (i) demanding that moral agents make people happy and (ii) demanding that moral agents make happy people. See also Rachels (1998) for discussion of this issue.

40. Parfit (1984, p. 367; 2011, p. 219).

41. Parfit (2011, p. vol. 2, 228).

42. Assigning the numbers this way assumes that harm is given equal weight to impersonal value. Of course, one might adopt a weighted version of the Two Tier View, according to which h

43. Parfit (2011, p. 230).

44. Parfit (2011, p. 230)