Running is an odd activity. To non-enthusiasts, it is a mix of monotony and self-inflicted pain. Yet, in Canada, many adults list running as their favourite participation sport – more than soccer, softball, hunting, fishing, aerobics, or tennis. Strange pleasures, it seems, are found on the trails and treadmills of this country.
I run – sometimes. To be honest, my pace is much closer to a plod. On top of the soreness and stiffness, I can recount incidents of slipping on ice, blisters, dog bites, overheating, and freezing. Oh joy. This is the gift of experience: a long list of excuses for not lacing up the shoes. Not today.
I’ve also discovered something more detestable than running: Not running. Indeed, many of us have mixed feelings about exercising and other personal resolutions. Think of our good intentions for healthy eating, giving up smoking, doing homework, or saving for retirement. Time is the nub of the problem. Workout or diet, anyone? The discomfort is assured, obvious, and immediate. The upside, if any, appears somewhere down a long and uncertain road. The pains, the gains are doled out at different times – weeks, months, even years apart.
For many, this calculation is way too easy. Impulse wins out. But when the time horizon reaches decades or centuries, the computations become prickly. What is the value of something distant? The answer is pivotal to the future – and not just your future. Especially not yours.
ENTER DISCOUNT WORLD
A choice experiment is one way to get a handle on people’s preferences and how they change with time. Start with a straightforward question.
Q1. Which do you choose: $100 now OR $100 one year from now?
That’s a snap. Almost everybody would pocket the instant cash for some very simple reasons. We are mortal beings and there’s some doubt about that future payment. Even though $100 hasn’t changed, what has changed is our perception of $100, coloured by time. A benefit delayed is a benefit diminished.
Let’s change up the numbers. Another question.
Q2. Which do you choose: $100 today OR $200 one year from today?
Smaller sooner or larger later? Studies show that most respondents still go for the fast cash – an inclination to snatch the immediate reward, even at the expense of a bigger, future reward. This behaviour also reveals the rate at which people devalue a future reward. Economists call it the discount rate. A high discount rate seriously diminishes the future value; a low discount rate places the future value on par with a current one.
Welcome to Discount World. More than just dollars are at stake here. Many species – the passenger pigeon is the most famous example – have been harvested to extinction. Today, around the world, over-exploitation remains the third most common reason for the decline of wildlife. Consider the blue whale, the largest animal ever to roam the globe. An adult blue can stretch to one-third of a football field, weigh the equivalent of 13 city buses, accelerate to 50 kilometres per hour, and live for more than a century. Here is a fascinating creature – bigger than a yacht, faster than a yacht, more durable than a yacht.
And, in the past, more valuable than a yacht. During the 20th century, 369,000 blue whales were taken in the Southern Ocean – the most stunning case of wildlife exploitation in history. Propelled by steam engines, explosive harpoons and shortsightedness, harvesters pushed these whales to the brink, to less than 1% of their original numbers. Whaling is now banned. Ethics aside, this brush with extinction seems bizarre. Surely a more measured pace – a sustainable harvest – would have been more profitable?
EXPRESS TAKE-OUT LINE
Think of blue whales as offshore banknotes, cashable at any time. Choose one of the following options: (A) Harvest these whales sustainably and indefinitely or (B) promptly liquidate the stock and re-invest elsewhere. While a sustainable harvest looks sensible (roughly 5% annual return), a larger payoff comes from aggressively harvesting to extinction and re-investing in a higher yield, dot-com or other stock. This is a stark and sobering conclusion. Extinction is entirely rational from a dispassionate, economic standpoint.
A blue whale kite soars at a festival in Sydney, Australia – a life-size replica of the largest animal that has ever existed. The other species in this photo has decoded its own origins, understands the plight of the blue whale, and can foresee far-future events. Mark Metcalfe, Getty Images
A blue whale kite soars at a festival in Sydney, Australia – a life-size replica of the largest animal that has ever existed. The other species in this photo has decoded its own origins, understands the plight of the blue whale, and can foresee far-future events.
A blue whale kite soars at a festival in Sydney, Australia – a life-size replica of the largest animal that has ever existed. The other species in this photo has decoded its own origins, understands the plight of the blue whale, and can foresee far-future events.
Not surprisingly, some creatures cannot thrive in Discount World. Large-bodied animals, like blue whales, have a “slow” lifestyle. They are late to mature and slow to reproduce; an average mother is more than 30 years old and she gives birth to a single calf only every 2-3 years. The financial return – how quickly the species can reproduce in the face of harvesting – is no better than 7% per year. These biological traits are shared by countless plants and animals: sharks, tigers, parrots, rhinoceros, elephants, chimpanzees, sturgeon, white pine and many other timber trees. Little wonder these species are vulnerable to over-exploitation. They are simply too slow to be included in our portfolio.
In Discount World, the economic value of wildlife in the long run can fade to zero. It is a faulty telescope. The tale of the blue whale is also a reminder that discounting cannot be divorced from ethics. It is not merely a question of dollars, but sense.
OUR FUTURE SELVES
Given the choice between $100 now and $200 one year from now, many people preferred the instant reward. Let’s introduce a subtle twist – with a surprising result.
Q3. Which do you choose: $100 in five years OR $200 in six years?
You see the change. The situation has shifted to the future. And with it, most people accept the delay and favour the larger, $200 payoff. This answer is telling. When we visualize our better selves, our future selves, we stress the long term. We are more patient. We discount less. Time changes our perceptions of time.
Humans are intriguing creatures. Among animals, our species is unrivalled in its capacity for language, for manufacturing and using tools – and for anticipating long-term future events. With little effort, we can picture succeeding generations. Answers become vivid. Ponder some of the masterpieces of nature – the Great Barrier Reef, Great Lakes, and Great Blue Heron. Won’t these natural treasures be as important to your great-grandchildren as they are to you? The virologist Jonas Salk posed the key question: Are we being good ancestors?
To be good and fair ancestors, we will need a variety of tools, including financial levers, applied with care and foresight. These days, a growing chorus of economists and scientists is calling for a price on carbon – a simple economic instrument to reduce greenhouse gas emissions, encourage alternate energy technologies, and lessen the hazards of climate change. A new tax, even revenue neutral, may not be warmly welcomed. But we might listen to the future – and realize there’s something far worse than a carbon tax: No carbon tax.
Decisions, from planetary to personal, are a feature of modern life. I’m working on a new philosophy to continue lacing up the shoes and keep running. It’s one stride at a time, eyes firmly fixed on the horizon.
James Schaefer is Director of the Environmental & Life Sciences Graduate Program at Trent.
