The agricultural origins of time preference

Here is a new paper by Galor and Özak, highly speculative of course:

This research explores the origins of the distribution of time preference across regions. It advances the hypothesis and establishes empirically, that geographical variations in natural land productivity and their impact on the return to agricultural investment have had a persistent effect on the distribution of long-term orientation across societies. In particular, exploiting a natural experiment associated with the expansion of suitable crops for cultivation in the course of the Columbian Exchange, the research establishes that agro-climatic characteristics in the pre-industrial era that were conducive to higher return to agricultural investment, triggered selection and learning processes that had a persistent positive effect on the prevalence of long-term orientation in the contemporary era.

Didn’t Irving Fisher once say something like this?  My view in contrast is that virtually everyone has a high rate of time preference, but some (wise) people can act like low time preference individuals by choosing the proper perceived rewards and benefits, for instance by courting approval from others for saving or waiting.  It may just be pretense, but who cares?  It is not unusual to see the same person switch rapidly from high time preference to low time preference modes of thought and behavior, and this to me suggests it is all about perceptions, environment, expectations, peer effects, and other social factors, rather than genes.  In other words, choose your framing wisely.

More broadly, there is a “brute fact” that one bunch of societies have a lot of correlated positive features, and another group of societies do not.  I don’t think we’ve gotten very far beyond that brute fact in terms of what we can infer from that distribution.

The original pointer to the article is from www.bookforum.com.

Comments

The usual theory down through history has been that the need to survive upcoming harsh winters has inculcated the urge to plan ahead and to sacrifice now so you have enough food to get through late winter.

But a lot of warm areas have dry seasons that might be somewhat similar in effects.

The Maine hermit dude is a data point here.

And the Into the Wild guy an interesting counterpoint. Still, it's striking for how many Western countries the south has the reputation for being the "lazy" area. True for the US, France, Italy. The UK may be an exception. So too Germany but there south means cold, which is a confounding factor.

I'm not sure how common this pattern is in the rest of the world. The south of China is exceptionally enterprising and southern India seems (Bangalore) more enterprising at present, although Bangalore benefits from a little bit of altitude to take some of the edge off the heat.

As far as India is concerned , there are probably cultural and historical factors at play also. The south had less invasions , relatively less violent history was more insular etc. As one from South India , who has worked 13 years in the South and also a total of 4 countries on 3 continents including the US , I never contemplated working in North India. Would certainly consider the South ( Bangalore, Hyderabad, Chennai) and West (Gujarat, maharashtra including Mumbai) more enterprising but its also better in terms of land fertility and climate.

The North and South China dynamic is the same as the North and South Indian dynamic. Historically, northern China was much more "enterprising", however you measure that, but just got invaded by barbarians too many times. When things got bad in northern China, which happened regularly every few hundred years, the more enterprising people literally went south.

The south of Germany is not colder than the north. The opposite is true, although the differences are not large.

Northern and southern Germany have menial climate disparities. Here I guess topography plays the bigger role. Making a living in the Black Forest might demand more hardships from you. But as was mentioned about India before, all the achievements of a climate-/topgraphy-triumphing culture will go down in flames, if the barbarians next doors choose to do so. And such events shape cultures as well. And to complete the circuit: Culture, unconsciuosly can have an effect on culture as well: Swabian-Germans tended to equally split their heirtage among heirs, northern Germans tended to give it all to the first born. As a result Swabian farmers had to become more industrious on ever smaller farmland.

The usual comparison has been between temperate agricultural zones where a big killer was late winter starvation and sub-Saharan African agricultural zones, where a big killer was falciparum malaria spread by mosquitos. The theory has been that the sheer randomness of insect-borne killer diseases in sub-Saharan Africa reduced the correlation between purposeful effort and not dying, with consequent cultural impacts.

William McNeill in Plagues and Peoples is a good example of such a theorist. I wrote about his theorizing of that here. I would note that Steve's friend Greg Cochran has a very different theory, which is more concerned with mutations than competing dimensions of selection, although he could well believe both factors applied.

Malaria was hardly unknown in non-tropical climates: historically, there were outbreaks as far north as St Petersburg (Russia). The disease only seems to be tropical today due to economic factors: non-tropical countries are richer, windows tend to be screened, most work is indoor work, and anyone who does fall seriously ill ends up in a hospital where they are isolated from vectors that might transmit the disease to others.
Africa of course had and has deadly diseases that are endemic. But so did Europe and Asia. For sheer lethality nothing (except maybe smallpox in the New World) compares to the two Plague pandemics of the 6th and 14th centuries. Add in TB, smallpox, influenza, typhoid, typhus, dysentery, and plain old pneumonia and Europe was a horribly unhealthy place until very recent times.

Falciparum malaria spread by anopheles mosquitoes is likely the worst killer of all diseases today, and probably for most of history: sickle cell anemia is a brutal byproduct of the evolution of a defense against Falciparum malaria over just the last few thousand years.

Sub-Saharan Africans had a hard time living together in cities because the disease burden was so high. That's why sub-Saharan Africa was so much less urbanized than other agricultural cultures. Cities were always disease ridden, but south of Timbuktu or so, you could barely have cities at all.

You completely ignore the point I made that the disease burden was also high in European and Asian cities as well-- to the point that urban death rates exceeded urban birth rates right up until the 19th century and cities survived because of continual in-migration from rural areas.
A more likely reason why Africa never coasted large cities before the modern era is that before the Columbian Exchange (when maize and cassava were introduced) Africa lacked food crops like European wheat and Asian rice that could support large populations. Village agriculture was about all native African crops could support.

Here's a classic statement of the theory of time preference diversity in regard to onrushing winter:

https://www.youtube.com/watch?v=wM1DgihKHVI

So some kids can defer marshmallows for social reasons? Sounds thin.

Thanks to organized religion some teenagers can defer sex for social reasons. Waiting to fulfill desires is a social value in some circles.

From the Wikipedia page on the marshmallow experiment:

"A 2012 study at the University of Rochester (with a smaller N= 28) altered the experiment by dividing children into two groups: one group was given a broken promise before the marshmallow test was conducted (the unreliable tester group), and the second group had a fulfilled promise before their marshmallow test (the reliable tester group). The reliable tester group waited up to four times longer (12 min) than the unreliable tester group for the second marshmallow to appear."

There have also been experiments that tested the role of absent fathers on a preference for immediate gratification and found a relationships in young children. So yeah, looks like social reasons do affect kids time preferences.

No. It's not their time preferences that changed

OK. Let's be pedantic and change that to:

So yeah, looks like social reasons do affect kids' ability to act or not act on their time preferences.

Interesting. Maybe not so thin after all.

@jr

"There have also been experiments that tested the role of absent fathers on a preference for immediate gratification and found a relationships in young children. So yeah, looks like social reasons do affect kids time preferences."

Inheriting the genetics of their absentee fathers and the genetics of their mothers who are into potentially absentee fathers also affects kids' time preferences... and intelligences.

Even in our advanced economy, the fall remains the busiest time of the year, with semi-arbitrary seasonal events (Thanksgiving, Christmas, end of the budget year for many businesses) serving to increase the time pressure in a fashion our agricultural ancestors would have been familiar with.

Interesting: The big splash about Christmas is a 19th century phenomenon, i.e. relatively recent, and we all know when Thanksgiving became official. I speculate that the remnants of true time pressure can be seen in Lent, Yom Kippur, and Ramadan, festivalizing times when there was no food around anyway [though the lunar calendar makes this somewhat tricky]! My wife and I feel much better now that our children are out of the house and we can ignore Thanksgiving, Christmas, and yes, the end of the budget year. :-)

And, speaking of late year stress, how about college applications being due on January 1st?

I've always found spring to be the busiest time of the year with spring cleaning and garden prepping and planning.

Traditional societies would have known two "rush" times of the year-- spring for planting and autumn for harvesting. In Christendom of course early spring was also Lent with lots of extra church services and then the intensity of Holy Week (much of this is preserved in Orthodox Christianity still, and to a lesser extent in Catholicism; Protestants have largely eliminated it).

Malcom Gladwell had some useful insights on this comparing the Chinese rice paddy farmer who must "wake before dawn 360 days a year to make his family rich" to the Russian wheat farming serf who fatalistically accepts whatever the world throws at him because he has no control over crop yields.

The type of crops grown in your region have a direct impact on the type of early social structure that would develop. This, in turn, should impact your cultural values and time preferences.

Geography Matters.

Malcolm's knowledge of agricultural history and sociology is, shall we say, stylized.

Ah but I'll bet he's sound on Irish cattle thieves.

Rather stylised history, yes, but perhaps there would be a cultural divide between cultures who work smarter and harder with what they're given, and can cope with dry spells, versus ones that blindly increase production.

I'd think the willingness and ability of a society to protect property rights would have a great deal to do with time preference. How value is destroyed (confiscatory taxation, banditry, monetary inflation, war, natural disasters such as bad weather, etc.) wouldn't much matter. Whatever the cause, few will be willing to wait unless the payoff is reasonably secure.

Nice point well put.

Every society has gone through periods where disasters both natural and man-made have destroyed assets.

'I don’t think we’ve gotten very far beyond that brute fact in terms of what we can infer from that distribution.'

Well, one could compare forest management in Germany or Japan (both countries which essentially clear cut their forests several centuries ago) and that in Lebanon, of still notable fame for its cedars.

Why even post a comment like this? Obviously no one is going to do that. If you want to make a point, make it.

Why? To troll for replies like yours (and now mine). Dude's a classic attention whore. Or rather, I guess, an Aufmerksamkeit Hure

Don't be insulting to prostitutes. They're engaged in a business with tangible value. He's an obsessive troll.

Comparative forest management is an interesting and not unimportant subject.

Are you thinking Jared Diamond on Haiti vs the Dominican Republic.

Good point. But, in general, humanity's relationship with trees is pretty interesting. We like trees, but I'm not sure if we like forests.

How the Lebanese have managed to preserve some of their magnificent cedars after all these millennia is the kind of thing I might be interested in learning more about.

And indeed I might if any details were provided, but I am hardly likely to do a research project on timber at prior_approval's suggestion

I would be very surprised too, as Lebanon was already deforested in antiquity. The Epic of Gilagmesh, dating from 2000+ years BC or thereabouts, has a colourful allusion to the deforestation of the great cedar forests.

All I know is the U2 song. I would start with "Greening the Desert" on YouTube.

"Didn’t Irving Fisher once say something like this?" made me laugh. The propensity of economists to claim credit for their trade for any commonplace observation about society never fails to tickle.

As usual, it seems economists equate "agriculture" to growing field crops which are harvested once a year. There's also animal agriculture, where one harvests milk or eggs every day. Do the effects differ?

There's also a difference between settled animal husbandry (Swedish dairy farmers with barns, fenced yards, etc.) and nomadic animal husbandry (Syrian goat herders traveling the land in search of water for their flocks).

I imagine the first group would have a different conception of property rights than the second group.

Wait a minute. (No pun intended.) prior_approval got me thinking about something. The USA now has vast tracts of timberlands allocated for harvest, conservation or both. Yet Americans have hilariously low savings and high debts. How does that square with the authors' hypothesized "selection and learning processes that had a persistent positive effect on the prevalence of long-term orientation in the contemporary era"?

Corporate-Americans are pretty good at economically optimizing.

Because cultural evolution doesn't work that fast.

Fisher published a table of time preferences by race and nationality. It would probably not advance one's career to do that today. I don't have a citation, but I remember it well.

It seems to me that we should distinguish time preferences for consumption from time preferences for money (etc). Any sane person in a stable, prosperous society would prefer money now to money in the future because they can invest the money now and get more in the future, so there's no advantage to waiting. So there is plainly a time-value of money. Consumption, though, is a different matter. One might well prefer things like participating in athletics sooner but going on cruises later. Frank Knight thought there was no such thing as a "time value of consumption," at least across the board. His example was eating: Nobody would prefer consuming a lifetime supply of food today over spreading it out over one's lifetime. But anyone would prefer getting all one's expected lifetime income today over having it deferred (tax consequences aside, of course).

When a friend of mine was a child, he left on a two week vacation. He carefully provided his pet guinea pig with two weeks worth of food and water. But after an hour on the road, his parents realized they had forgotten something crucial so they returned home. He found that in those two hours, his guinea pig had not only eaten two weeks worth of food but drunk all two weeks worth of water.

Did he get IRB approval for that animal model?

I did nearly all the traveling I wanted to do before I turned forty on the grounds that I would enjoy it more and get more out of it when I was in better shape. I also would put up better than roughing it. Old age is for pottering around at home. The prospects of energy prices steadily increasing as I aged was also a consideration.

Bizarre that you would even mention genes in this context. Methinks Tyler is harboring some very unscientific neo-racist ideology.

he's a white libertarian intellectual and he pals around with Steve Sailer. it's not like this should come as a surprise.

How does Tyler "pal around with" Sailer? I don't think the two have even met, and the latter frequently mocks the former over his support for more immigration.

Read the post again, including the paper abstract.

The "unscientific neo-racist idelogy of gene(etics)" must be stamped out.

@ Tom
"Bizarre that you would even mention genes in this context. Methinks Tyler is harboring some very unscientific neo-racist ideology."

Yes, it is crime-think to imagine that different populations that have been genetically separated for millenia could possibly have different cognitive profiles.

It is fortunate for us that evolution stops at the neck.

'that different populations that have been genetically separated for millenia could possibly have different cognitive profiles'

Millenia? So the people living in southern England when the Romans conquered the area were as equally distinct from the Romans were from the Germans and the Gauls.

I think most serious racialists? human biodiversity devotees? these days reject such a simplistic reading, as they generally refuse to accept the idea that today's Italians, English, Germans and Gauls are as distinct as your claim would indicate. (Though it must be noted that just a century or two ago, members of all four of those groups did often say they belonged to different races.)

People who actually know something about biology are laughing in derision, but then, they aren't the ones creating imaginary categories in such a Kiplingesque just so story fashion.

Has Tyler been reading MPC? This "brute fact" analysis seems inspired by the conclusion reached on this video posted a few days back http://mpcdot.com/forums/topic/7218-a-compendium-of-shitlib-inanities/page__st__1040#entry182124

"It is not unusual to see the same person switch rapidly from high time preference to low time preference modes of thought and behavior" No, it is not unusual in our day and age. What is unusual down the centuries though is that we now have compulsory schooling in many countries and in other de-facto compulsory schooling. And that since then a lot of "values" are imbued into the working population that might have turned out differently if a child had been raised, reared and trained solely with his/her family up to adulthood or, respectively, given into apprenticeship of a quite similar family (like carpenter to carpenter etc.). I think we live in a transient society and all such studies, encouraged often by another time preference issue, namely who publishes how much how fast and gets it cited most, are better down a hundred years from now.

Can a Nation's Soil Explain Its Economic Fortunes? - The Atlantic

http://www.theatlantic.com/business/archive/2014/09/can-a-nations-soil-explain-its-economic-fortunes/379733/

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