Time as a Moral Illusion
Dear Friends!
Do you believe in…..?
It was reaffirming to get comments and reactions to the concept of belief and how it can shape so much in our lives. Being the gardener of our mind is certainly one of our most important jobs. Pruning, watering, nurturing (and yes talking to) our inner ideas, and setting the right conditions for a productive attitude, is not easy – but it is truly life-changing.
This week, I am returning to another theme that is a pivotal landmark in my own geography of beliefs. And, I guess, in all of ours. TIME.
Time is a complex and yet absolutely central dimension of our lives. First, and perhaps not always considered, it is the most democratically distributed of all resources. Every human gets 24 hours each day. And the outcomes of our lives, for most people, depend on how we choose to spend them. Even, or perhaps particularly, in the face of adversity and tragedy.
Second, one of the few things we know with absolute certainty is that each of our human lives is finite. No one is getting out of this life alive. And the impermanence of our experience gives it a frame and therefore creates meaning. It has boundaries. It adds definition and context. It instructs us to make something out of this limited time we get.
There are of course many complicated aspects of time that I am not capable of fully understanding and therefore can't explain. Like the space-time continuum and the relativity of time, black holes, etc. I will leave that to others. However, what I want to dive into today is the moral illusion of time.
Morality is, of course, complicated in and of itself. But it is always worth reflecting on since it is at the core of so much of the tension in our public discourse. For today’s purposes, I am referring generally to the distinction between right and wrong. Doing what is right. Living according to the golden rule "Do unto others as you would have them do unto you."
So, what does time have to do with it?
It turns out. Quite a lot.
Most of us discount problems far away from us. Problems that exist in time and in space. We are not as concerned about things happening to people we don't know or things happening many years from now. Perhaps this type of compartmentalization is a survival or coping mechanism. And it is, of course, understandable. We can’t concern ourselves with every conceivable problem out there. Can we?
But let’s return back to time and the urgency (or lack thereof) that it can summon. Why does a problem forecasted in 20 years feel less daunting than if that same thing happened today?
If 100 people are dying or suffering, whether you know them or not, today or in 20 years, what difference does time make? Isn’t that the same type of pain? Shouldn’t we “value” that the same? Well, I would argue we don't. Stay with me.
I was trained in economics and finance. In the late 80s, modern finance theory took root, and discounted cash flow models became the new norm. The way we value cash flow streams is that we “discount” them with some form or return measure. That return measure is supposed to take into account two main “considerations,” or opportunity costs as we think of them. One is the time value of money. Meaning, if we didn’t invest our money in this particular asset, we could put them in a bank account or buy some other asset earning some other type of return. The other opportunity cost is an expression of risk. If the future cash flow streams are uncertain, we should discount them to "compensate" for the possibility that we won’t be getting them at all.
So, in light of this, my question is really whether or not the idea of 'discounting' the future is a good way to allocate our present resources for achieving the best possible future. I have some doubts and hence the moral illusion of time.
The meta-theme of these newsletters and the benefit of “elevating” your perspective is that we can learn how to embrace opposing truths concurrently. And in the case of allocating present resources to future expectations, I think we can do a better job balancing the short and the long term.
In the case of discounting the future, there are many reasons to do so. Primarily because anything in the future is uncertain, and the farther we forecast, the more uncertain the outcome becomes. Therefore, when we allocate resources today with an expectation for a future outcome, it is sensible to discount some of those future outcomes so we don't "overcommit" our resources.
But there are areas of life where almost the opposite is true? Where we ought to be more willing to invest for many years simply because the future rewards should be well worth the wait? Or where it is actually less costly to invest earlier rather than later? In many such situations, it's less about probabilities and more about capabilities.
Fortunately, there are good examples across the board in our individual lives and decisions. Most parents happily invest both time and money into their children. We invest in education confident that this investment will reap many rewards later in life. Some bring their cars to service regularly to avoid future bigger problems. Most also buy fire insurance. We pay small premiums every year in the unlikely scenario that something bad will happen. The list is long and somewhat encouraging when I think about it.
But where moral illusions seem most pertinent is in regards to investments in collective capabilities. An ounce of prevention is worth a pound of cure. Health care is such a great example of one of our moral illusions clouding our investment. We don't invest sufficiently in avoiding disease, and yet seem to be willing to spend unlimited funds to fix things that can be avoided. It’s difficult to convince people to invest in something preventative because a successful outcome means an event doesn’t occur. But preventative healthcare makes tremendous financial sense. Last time I checked, 3% of our overall massive healthcare spending goes towards preventing disease, when so much of our overall health care cost and suffering could be avoided altogether. I won't go into the experience of the pandemic, but I feel strongly that we revealed our short-term instincts in the past 18 months. We quickly spent trillions to avoid acute disease (understandably), while we remain unwilling to invest in the long-term health of our population. It's moral asymmetry at best and stupidity at worst!
And onto the world of business – my favorite arena. The average hold times for a public stock have fallen from 8 years when I was born to around 3 months today. Too many business decisions are taken with a short-term time horizon. Climate change is perhaps the most glaringly obvious example of what happens when we don't factor in long-term effects. We are all going to pay a VERY high price for not acting sooner.
Our food system is the place where this all comes together. We love cheap food here. We chase efficiency in food systems to the detriment of our health and our planet. We love the taste, but somehow never talk about the aftertaste – the effects on our health and future wellbeing. If we were willing to pay a bit more for what we eat, we would live longer, healthier, and happier lives, while at the same time mitigating a significant part of our climate change challenges. Please buy organic or, even better, from a local regenerative farm!
Fortunately, there are important organizations and leaders that are voicing similar opinions today. From Larry Fink at Blackrock to Business Roundtable, and growing areas of the economy such as ESG and impact investing. I do believe change is finally coming. However, I would love to see more discussion and debate on our relationship with TIME as the real problem.
How do we extend time horizons? How do we practice patience and trust? How do we increase our willingness to sow today and happily and eagerly wait for the harvest several years later?
My answer is trying to live life more in reverse. Thinking hard about where I want to be when it is all over, and therefore, how I want my movie to end. It sounds perhaps a bit dark. Even morbid. But I think we can't really build anything sustainable and beautiful unless we build it beyond ourselves.
One of my mentors and sources of inspiration on ethics in business is Charles Handy. He wrote this thoughtful commentary in Financial Times in 1998
“Set your sights on immortality, or as close to it as you can get, and most of the ethical dilemmas sort themselves out. But that requires leaders to think beyond their own demise. The men who designed and laid the first stones of the great cathedrals of the middle ages knew that they would never see them finished, yet they built them to last forever as the symbols of their belief. Today the skyscrapers of business tower over the old cathedrals. We must hope that those who build the enterprises within them are cathedral builders in their turn, for if they fail us then we all fail. Sadly, or perhaps not, we cannot legislate for cathedral thinking. It has, like all ethics, to be a matter of belief.”
— CHARLES HANDY, FROM FINANCIAL TIMES ON ETHICAL BUSINESS , 1998
I will for sure return to the issue of time and long-term thinking in future posts. I have not yet found the best and most compelling way to argue for a long-term world but I believe with enormous conviction that many ethical and moral dilemmas and challenges we face would be reduced if we placed our gaze further out. If you have ideas and suggestions that would help get there, PLEASE send them my way. It's a very important conversation to be had.
When I think about places, buildings, people, and things I love I often find that time is a factor in shaping the depth of those feelings. The best things in life have a patina to them. There is an attractive quality to anything or anyone that has been through the test of time. You can almost feel and smell the effort of the journey itself.
Here are some sources of inspiration on the subject:
Here is Ezra Klein's interview with Tyler Cowen where I was reminded of the role time plays in moral illusions. This is a great example of the kind of public discourse we should have more of. A very thoughtful discussion covering a lot of ground and quite a breadth of political opinions. It's refreshing.
This is a good article by Steven Pinker on the Moral Instinct.
This is a good piece in the Financial Times on short-term thinking in business.
This is from Fortune this week about the fact that the world of business is changing in this regard.
This was a great article, shared by my friend Anders Söderlund, about why we might not want to live forever?
Of course, my friend Dov Seidman founded LRN and The How Institue for Society to inspire the world towards principled performance and educate tomorrow's leaders around Moral Leadership.
Have a great week! Use your time wisely!
