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Thoughts prompted by HBO’s Rome

March 11, 2010

Despite being a pinnacle of ancient civilization, Rome was poor. The very few aristocratic families scraped out an existence comparable to a middle-class American. (Bonus: slaves.  Downside: no medicine.) The vast majority of Romans, from the mercantile class downward, were arguably materially poorer than inhabitants of third-world countries today. If ancient Rome were transported to the present, it would be one of the worst-off countries in the world. Slave labor is nice for non-slaves but it cannot get you past primitive technology and (at the time of the series) poor governance.

More broadly, what this implies is that if you’re really concerned about income inequality, you should be just as concerned about temporal inequality as with inequalities in a static time frame, such as between rich and poor in the present-day USA. (This is forgetting about concerns about redistributing from the rich US to the global poor, which no serious politician places as a high priority). Transferring goods those poor blokes in the past is, of course, impossible. But this line of thought also implies that we should really be worried about is improving our own lot at the expense of those lucky bastards who live in the future, where technological progress makes material goods increasingly cheap, and who will probably look at our living conditions as backwards savagery.

Now this we can do.  How?  Higher consumption, and lower investment. Spending more money today will make us better-off today. The downside is that we don’t get the payoff of investment in the future – but they don’t need it, what with their Playstation 10,000s and flying cars. Yes, at some level, underinvestment will decrease the total welfare of humanity, but this is a tradeoff that plain-vanilla redistributionists are already willing to make to some extent. (Again, the people who lose from this policy are those well-off far-future people.)  And given the current rate of technological growth, you could reduce investment by a significant amount without creating a futurity that’s worse off than us, which would defeat the whole point.

You could argue that we already do this tradeoff to some extent, by saving below the welfare-optimal amount. But I think that we naturally care about our children and descendants, more so than we care about our poor neighbors, and more so than would be welfare optimizing. Given this powerful emotion I think it’s safe to say that we aren’t consuming anywhere near what intertemporal redistribution would imply. So, next time you hear criticism of Americans spending too much and saving too little, just remember that we’re not being selfish; we’re just ensuring equality!

(If you buy that, by the way, another consequence of this belief is that we shouldn’t do that much about global warming. People in the future will be better-off and will be better able to deal with the problems; inaction on the global-warming front is a form of disinvestment in the future.)

Crossposted from Facebook.  Contents may be flippant.


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