[Quotes and Insights #17]
This quote is particularly telling because the author is trying save capitalism from itself.
Nowhere is capitalism’s time horizon problem more acute than in the area of global environmentalism …
What should a capitalistic society do about longrun environmental problems such as global warming or ozone depletion? …
Using capitalist decision rules, the answer to what should be done today to prevent such problems is very clear-do nothing. However large the negative effects fifty to one hundred years from now might be, their current discounted net present value is zero.
If the current value of the future negative consequences are zero, then nothing should be spent today to prevent those distant problems from emerging. But if the negative effects are very large fifty to one hundred years from now, by then it will be too late to do anything to make the situation any better, since anything done at that time could only improve the situation another fifty to one hundred years into the future. So being good capitalists, those who live in the future, no matter how bad their problems are, will also decide to do nothing.
Eventually a generation will arrive which cannot survive in the earth’s altered environment, but by then it will be too late for them to do anything to prevent their own extinction. Each generation makes good capitalist decisions, yet the net effect is collective social suicide.
From The Future of Capitalism, by Lester Thurow