Economics & Sociology

ISSN: 2071-789X eISSN: 2306-3459 DOI: 10.14254/2071-789X
Index PUBMS: f5512f57-a601-11e7-8f0e-080027f4daa0
Article information
Title: Time Preference, Growth and Civilization: Economic Insights into the Workings of Society
Issue: Vol. 5, No 2a, 2012
Published date: 20-07-2012 (print) / 20-07-2012 (online)
Journal: Economics & Sociology
ISSN: 2071-789X, eISSN: 2306-3459
Authors: Alexandru Pătruti
Mihai Vladimir Topan
Keywords: time preference, social time preference, the interest rate, savings, growth, present-orientation, future-orientation
DOI: 10.14254/2071-789X.2012/5-2a/4
Index PUBMS: 20af3aeb-aa13-11e7-8eae-080027f4daa0
Language: English
Pages: 45-56 (12)
JEL classification: B53, D90, E21, E43, O10, O16
Website: https://www.economics-sociology.eu/?198,en_time-preference-growth-and-civilization-economic-insights-into-the-workings-of-society
Abstract

Economic concepts are not mere ivory tower abstractions disconnected from reality. To a certain extent they can help interdisciplinary endeavours at explaining various non-economic realities (the family, education, charity, civilization, etc.). Following the insights of Hoppe (2001), we argue that the economic concept of social time preference can provide insights – when interpreted in the proper context – into the degree of civilization of a nation/region/city/group of people. More specifically, growth and prosperity backed by the proper institutional context lead, ceteris paribus, to a diminishing of the social rate of time preference, and therefore to more future-oriented behaviours compatible with a more ambitious, capital intensive structure of production, and with the accumulation of sustainable cultural patterns; on the other hand, improper institutional arrangements which hamper growth and prosperity lead to an increase in the social rate of time preference, to more present-oriented behaviours and, ultimately, to the erosion of culture.