From "The Fiat Standard" :
"Time preference refers to the ratio at which individuals value the present compared to the future."
You think it's a bogus idea ?
Discussion
Sorry , "The Bitcoin Standard" , your name distracted me lol.
Time preference is a useful concept in economics, but not the way Saifedean misuses it, which #Cryptoeconomics debunks.
https://github.com/libbitcoin/libbitcoin-system/wiki/Speculative-Consumption
https://github.com/libbitcoin/libbitcoin-system/wiki/Time-Preference-Fallacy
From the chapter on speculative consumption:
Cheers man , trying to wrap my skull around this ...
The time preference thing seems like it’s splitting hairs. What exactly does Saif say about time preference that’s so wrong?
I don't know, I didn't read the book.
Imo having a word for this is incredibly valuable because it describes a very important concept that fundamentally comes down to: we can choose to build or destroy civilization with our actions. There are rare exceptions where high time preference makes sense such as emergencies.
I’m not so sure what Saif said that was wrong? I’ve heard him basically say high time preference in wartime makes sense but generally is not preferable. That seems aligned with nostr:npub1cpstx8lzhwctunfe80rugz5qsj9ztw8surec9j6mf8phha68dj6qhm8j5e’s links.
In the scope of Austrian economics subjectivism which he claims to adopt there is no such thing as cardinal valuation of things ("X is worth 10 to me"), only ordinal ("I value X more than Y"), so the idea of a "ratio" is nonsensical.
Worse than that, there is no way to even perform any comparison between valuations from different actors. The same person in the past and in the future are different actors, therefore there can be no comparison or "ratio".
Cheers man , you've given me something to chew on for a while.
Also I think there is no decent answer for the fact that one might prefer an ice cream in the summer over one in the winter and that would imply negative time preference in the winter and positive time preference in the summer.
I had never thought of that , that's insightful , thanks.
I always took time preference to be linked with value. Isn’t an ice cream available right now more valuable than an ice cream you have to wait for in the summer?
Is it? I don't know. Imagine that you can eat an ice cream anytime you want, and it's free, but only get to eat one in your entire life.
Every time you ask yourself this question do you always choose to eat it "exactly right now"? Or is there any situation in which you would prefer to wait until tomorrow?
It’s an interesting topic with so many variables. If you take out any reference to value or price then it really changes the perspective. To be honest I haven’t thought about it in any great depth until now 🙂
Did you know that in Italy people are used to get ice cream all year round?! Because of that there are many ice cream shops, some are really famous and on the books advising places to visit.
Now for ya nostr:npub180cvv07tjdrrgpa0j7j7tmnyl2yr6yr7l8j4s3evf6u64th6gkwsyjh6w6, put that in your pipe and smoke it smartypants !
XD
That explains why all ice cream shops close here during the winter: they must be relocating temporarily to Italy!