Alex Imas: belief

Transcript context

…I guess this is a historical question, but it does seem to me that in a lot of cases what is happening is that as they near the end of their life, they either hand it off to their children, who are worse stewards of capital than they are. They don’t even manage to grow their wealth at the rate the economy grows, much less faster than the economy grows, which their parents were doing. They’re like, “Well, I care less about my children having it than me playing this game of accumulating wealth. So I’m just going to give it to some trust.” If people are living longer or if they can figure out some way to align their trust to this wealth accumulation process… It just feels like the evolution here is so strong. You just need a couple of agents that think this way for this to be the dominant thing determining the preferences of the whole economy, because this part is growing much faster than the other parts of the economy. The part about satiation and diminishing marginal utility keeps coming up, I think it’s really important. If a person has an intrinsic preference for accumulation, that’s just what they want, then I think your story is totally right. But that’s just not how preferences usually work. You have enough hedonics in your life, and then the social status… Rousseau wrote about this, St. Augustine wrote about this. This is a basic part of preferences. Now, you guys are arguing about something else, where you could have such high concentration that you could just have a couple of exceptions to the rule, and that’s going to be enough. I have nothing to say about that. I think the claim is a little stronger, not just that you could have some exceptions, but that historically and today we see the exceptions. They just haven’t really taken over the economy historically because there have been these dissipation shocks, as they’re called. They’ve given it to their kids who squandered it, or they put it in foundations which spent it. It’s not really a shock, but… People might have liked to fill the universe with monuments to themselves and live forever, very wealthy. It’s a weird preference, but it’s not a hypothetical preference. I think that’s the claim. But who knows what’s going on in their heads? Even without the intrinsic preference for accumulation, there are some instrumental reasons why some people might value accumulation, which is also worth bringing up. There’s a desire for political, philosophical, or religious influence. People get into an arms race over what society looks like and what people believe. Similarly but differently, because it’s not an arms race, there’s just total utilitarian philanthropy. When I think about why it might be good to have a lot of wealth in the future as a good classical utilitarian, to me, the value—or at least one way you could have an almost unsatiating utility function in having wealth in the future—is to create new happy beings. They just add to the total welfare of the world. This idea goes at least as far back as Bostrom’s astronomical waste point, that we could put Dyson spheres around the stars and turn all the energy into really happy simulations and whatnot.…

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