Time Preference and Evolution
July 10, 2013 § 5 Comments
I’ve come to the sobering conclusion that the evolutionary process favors the proliferation of the inferior ranks of humankind. If it is agreed that “intelligence level” is an inherited trait, then some conclusions can be drawn.
First, generally speaking, the poor tend to have more children than the rich. Thus, if wealth is a good indicator of intelligence, the less intelligent will proliferate at a much faster pace. It may be argued that wealth is not a strong indicator of intelligence. For instance, an American making minimum wage and living in low income housing is magnitudes wealthier than a peasant in some third world country. Perhaps wealth comparisons are only fair when comparing individuals living within the same country. But even within the same country, certain restrictions and regulations create barriers to entry such that wealth tends to concentrate into a few hands. Thus, it’s impossible to say that wealth is perfectly correlated with intelligence.
It’s clear that simply associating increased wealth with higher levels of intelligence will not suffice. Still, there has to be some explanation for the varying levels of success experienced by individuals with almost identical socioeconomic backgrounds. Almost everyone knows someone from their childhood that “made it”. Perhaps they moved out of the ghetto into a nice suburban neighborhood. Or perhaps they moved from a modest suburban neighborhood to a more upscale neighborhood. Whatever the case, we all have anecdotal evidence of some individuals bettering themselves. If intelligence is not the root cause, then what?
This question sort of nagged at me for a while. My intuition told me that there had to be some overarching trend – a sort of universal trait – which is associated with increased wealth. Then the other night I was listening to my dad ramble after having one too many glasses of bourbon. He was going on about how I “did it the right way” and how, to paraphrase, I was much less impulsive and short-sighted than he was at my age. Then it hit me. Without realizing it, my dad was trying to explain an age old economic term: time preference. Time preference is a term generally used to describe an individuals valuation of a good now versus their valuation of the same good in the future. For example, someone with a very high time preference is focused more so on the here and now. Someone with a very low time preference could be described as “future oriented”. They are willing to put off immediate satisfaction in order to make even larger gains in the future. Thus, an individual with high time preference would live a much more impulsive lifestyle. An individual with a low time preference would live life in a much more planned and responsible fashion.
It is my hunch that, ceteris paribus, a lower time preference leads to increased individual wealth over a lifetime. Sure, there are many instances wherein some of the most impulsive people become wealthy. But these people almost always obtain their wealth via luck or some genetic advantage (athleticism, intelligence, vocal abilities, etc.).
Yet, there is no way to prove that time preference is genetic. In fact, I highly doubt that to be the case. To the contrary, a low time preference is almost certainly a learned trait. Perhaps there is a link between intelligence and time preference. In any case, the world’s most powerful families are those who have managed to make a fortune and pass on the said fortune as well as the personal habits which led to its creation. Wealthy families which fail to teach their children about the importance of frugality, thrift, and whatever other traits helped build their fortune will quickly lose their wealth. Depending on the size of the fortune, this may take generations. Regardless, these learned traits are essential ingredients for prolonged, multi-generational wealth. Without them, only some form of state instituted/supported controls or regulations can preserve their wealth.
Generally speaking, it’s impossible to know exactly how evolution will affect the time preference of society as a whole. How strongly is a low time preference correlated with intelligence? Does the fact that poor families generally have more children than wealthier families mean that evolution rewards a high time preference?
This post was more rambling than I expected. In the end, I feel like I have more questions than answers. Story of my life.