What Can Economics Teach You About God? (Sunday Meditation 5/1/2022)
This meditation can be read as secularly or religiously as you prefer. I am not formally educated in theology, or anything else for that matter. My opinions are more than likely heretical and lacking important context. Feel free to correct me in the comment section, I enjoy it. I am reading the Bible with an open mind and the aim of extracting whatever wisdom I can. This is a personal interpretation and nothing more.
Religion and economics are seemingly incompatible and yet intertwined with one another. Religion tries to tell us how we should act. Economics tries to explain why we act the way we do. You can attempt to reject religion or economics, but you can’t dodge their influence over your life.
Learning about both makes the world appear a bit less chaotic.
I’ve been reading “The Bitcoin Standard” by Saifedean Ammous in an attempt to understand the most recent developments in economics. In the book, Ammous puts heavy emphasis on the concept of “time preference.”
What is time preference?
“Time preference” is most easily understood as the discount that each individual places on the future. Would you rather have $1,000 dollars today, or $1,000 dollars next week? Obviously you would prefer to have the money today.
How much money would I have to offer you next week for you to refuse the $1,000 dollars today? The ratio of future-value required for you to refuse present-value is your personal time preference.
People with high time preference place more value on the present. People with low time preference place more value on the future.
We all aspire to have a low time preference, whether we know it or not.
Impulsive people with high time preference tend to squander their resources in the present and make very little progress across their lifetimes. People with low time preference tend to save money and make investments that aggregate into valuable resources in the future.
Low time preference is the virtue that enables us to expend effort on any long-term outcome. This includes education, saving money, going to bed early even though we don’t want to, and even avoiding junk food because we want to remain healthy.
Low time preference sounds great in theory, but it isn’t always possible.
Time preference exists for a variety of reasons, but I want to focus on the most basic: the future is uncertain, because you might die. “The future” is theoretically infinite. But since the future is not guaranteed to arrive, we would be foolish to assign it infinite value.
Today we are lucky to be able to trust the stability of the future. We (generally) don’t need to fear marauding raiders, the black death, or starvation. Standing at the high-water mark of peace and prosperity, the main hurdle we must overcome to properly invest in the future is our internal self.
But for most of human history, “the future” has been a far riskier bet. Poor diets, nonexistent medicine and regular violence made death a constant threat rather than a distant fear. Why would people invest in long-term projects like hospitals, clean water, or education when they will likely die before those projects are completed?
When people invent penicillin, breed high-yield grains or build water treatment plants, everyone else is provided with a rationale to place a higher value on the future. Our odds of reaching the future just went up! But why would anyone tackle those projects to begin with?
Innovators, savers, and investors all have faith in the future.
Faith is an important word. It seems to mean, “belief in absence of hard evidence.” Human beings from the beginning have placed some degree of faith in the future. People not only invest in their own uncertain future but go so far as to invest in other people’s futures. Mostly for our own children, but also for society at large.
Why should we do that?
Investing in our own future can be explained rationally: we hope to enjoy the fruit of our efforts. But human beings regularly invest into a future that we are guaranteed not to be a part of. We arbitrarily assign moral, transcendent value to the future of our descendants and their society.
Religion is obsessed with time preference.
I’ll use Christianity as my example simply because I’m most familiar with it.
The Bible is with deeply concerned with delayed gratification. In Old Testament, God makes promises to Abraham that will literally take generations to be fulfilled. The pattern continues throughout the entire story.
Biblical characters attempt to do “the right thing” not just for their own direct gain, but for the future gain of their people. In the New Testament, Jesus spoke of the Kingdom of Heaven. A place of infinite reward for those who dedicate themselves to “the right thing.”
I said before that the future is theoretically infinite, but we would be foolish to place infinite value on it since we won’t last that long individually. Jesus would strongly disagree.
One of Jesus’ core messages is that we should put our faith in the infinite future, precisely because it is so much larger than us.
He further defines proper investment not as material gain or hedonistic pleasure, but merely doing the right thing. Jesus explicitly states that doing the right thing will often cost you in the present, but in “the Kingdom of Heaven” you will be rewarded.
Christianity not only insists on having a low time preference, but also claims that moral value is of greater worth than material value. These are things that most Westerners attempt to believe, Christian or not. The execution of that belief is where we all stumble.
We can scoff at “the Kingdom of Heaven” as simplistic bribery to incentivize good behavior, but I’m not so sure. Spirituality in general requires us to reconsider the arbitrary distinctions we draw between concepts.
How different is the group from the individual? How distinct is the child from the parent? When we die do we truly vanish, or simply reabsorb into the larger fabric of reality? Do our actions fizzle away, or ripple on for all eternity?
Most religion seems to ask us to view ourselves as part of the world, and the world as part of us. When we accept that precept, the future becomes a guarantee.
We may not be around in our usual mortal sense, but some version of us will continue to exist. Religion asks us to place a higher value on that indefinable version of “us” that will live on until the end of time. We are still making economic choices. Our subjective values and time preferences just need to shift.
Obviously, there is no silver bullet for the flaws of man. We all fail to live up the impossible standard of moral perfection. Even so, I like to believe that the act of considering what moral perfection might look like can help us inch closer to the mark.
I’ll close out with a Bible verse from the Sermon on the Mount:
“Do not store up for yourselves treasures on earth, where moth and rust consume and where thieves break in and steal; but store up for yourselves treasures in heaven, where neither moth nor rust consumes and where thieves do not break in and steal. For where your treasure is, there your heart will be also.”
I’m writing a meditation on scripture and other wisdom literature every Sunday. If you enjoy them and would like me to continue publishing in this format, consider following, and let me know what you think in the comment section.