Guest Post by Eric Winsberg: Discounting the Future in Pandemic Mitigation Ethics

[This is an invited Guest Post by Eric Winsberg [The University of South Florida]--ES]

“I would gladly pay you Tuesday for a hamburger today.” J. Wellington Wimpy

Much of the political debate about how strict our measures to mitigate the spread of SARS-CoV-2 ought to be has fallen along partisan political lines. People who generally favor strong climate mitigation practices also favor strict legally-mandated social distancing practices and the closure of segments of the economy. This alignment has been natural for a number of reasons. First, both climate mitigation and disease mitigation arguably involve personal sacrifice for the common good and a healthy respect for the advice of experts. Second, Donald Trump, who says climate change is a hoax, appeared to downplay the seriousness of the virus early on. This surely played a role in solidifying, among the people who take climate mitigation seriously, the view that the ethically correct response to the oncoming pandemic was to suppress it at almost any cost.

I would argue that this alignment is far more superficial than it seems. Never mind that the science, and the advice of experts, with regard to the basic parameters of the Covid-19 pandemic, has been far more mixed than the science of climate change. This is to be expected since the problem of climate change has been studied extensively for over thirty years, while the pandemic is only 4 months old. And we still remain ignorant of basic facts about the virus and its degree of spread. The greater strain on the alignment between climate mitigation and pandemic mitigation lies at the heart of a fundamental ethical quandary: how much should we value our present interests against our future interests and the interests of our children? 

In climate ethics, this is often framed in terms of the question of how much we should ‘discount the future.’ Like J. Wellington Wimpy, most of us, at least in our less reflective moments, will gladly sacrifice goods for our future selves in order to receive goods of equal value today.  That’s why people who lend or invest their money expect a positive return in exchange for deferring their consumption until the future. Economists call the rate of return that we ought to use to determine the present value of future cash flows the “discount rate”.  The idea is that I should discount, by a certain amount, the value of the dollar J. Wellington Wimpy is going to give me Tuesday, even if I am morally certain he is going to pay that dollar promptly and in full when Tuesday comes.

Debates about the discount rate loom large in climate ethics. Those who oppose expensive climate mitigation measures, or argue for a very low carbon tax (those, that is, who do not simply deny the existence of anthropogenic climate change) often argue that the discount rate ought to be high.  For such people, even if climate change is going to cost us 20% of GDP in 2120, we should only be willing to pay a small amount for mitigation efforts today to prevent that damage, just as we might expect to have to pay $1.10 on Tuesday for a $1 hamburger today.  Arguments about climate mitigation are sometimes arguments about what the best science says, and sometimes about how much we can trust governments to enact useful regulations, but mostly, they reflect profound disagreements about just how much we ought to discount the future.

Even though it is an observable sociological fact that proponents of climate change mitigation overlap considerably with people who support the current aggressive suppression strategies for SARS-CoV-2, it’s also undeniable that with respect to the question of how much we should discount the future, these two political positions are at odds with each other.  Current Covid-19 mitigation measures massively discount the future. They are diminishing our civil liberties for an unforeseeable length of time, severely damaging the economy, and burning through debt in a way that will cost the younger generations a great deal for a long time. The benefits, in places where the hospital systems are not over-taxed, are to postpone infections for what can at best be a very short period of time--almost surely not long enough to get us to a vaccine. 

Why think that the primary costs of Covid-19 mitigation are born by our future selves?  Many seem to think that there is no cost to shutting down if we simply compensate those who lose their economic opportunities. Or they complain that people who bring this up are only worried about spending money to make up for the loss of economic output. That such people are arguting for austerity. But this is mistaken. The worry here is about the loss of economic output and the loss of the opportunity for young people to participate in it. When you take on debt to compensate those who are locked out of their jobs and businesses, you are giving the people you borrow from a claim on your future economic output.   You are promising them a hamburger Tuesday in exchange for giving you a hamburger today. We can hope that political action will help to direct economic losses so that they will disproportionately fall on those who can bear them best, but this is optimistic.  The US Federal Reserve has just done a study that said that 40% of households with less than $40k/year in income have lost at least one job. And there are wide reports of the stimulus money being raided by the best-positioned and largest American companies.

The point here is completely independent of what you think about the wisdom of the federal government taking on more debt.  $2 trillion (or much more) that we borrow today to offset that loss of economic output is money that could have been spent on new hospitals, schools, green energy, public transportation, etc. So if you believe in modern monetary theory (MMT), or are a Keynesian, then good for you. You think we can absorb the debt. I'm not arguing about that here. I'm simply pointing out that this is consumption being pulled forward from the future in exchange for forcing people to sit idle rather than in exchange for investment in schools, roads, green energy, etc that could benefit the future. And no economic theory, Keynesian, MMT, or otherwise, denies this. 

Spending trillions of dollars mitigating the economic fallout from the shutdowns means not spending trillions in fighting climate change. At some point, we are going to have to spend trillions on climate change, but Covid mitigation means it is not going to happen now or anytime soon. The further we delay climate mitigation in order to address Covid mitigation, the closer the climate gets to points of no return.

There are also many children whose schooling will be disrupted for a long time; and this is something that will meaningfully diminish life prospects for children from disadvantaged backgrounds.  Students who are putting off college for financial reasons are students who may never be able to attend college again. Graduating seniors whose internships and jobs have disappeared will start their working lives later and at a financial deficit.  This leaves aside costs that will be difficult to measure:  children who grow up with inadequate socialization, lack of outlet from domestic abuse, late immunizations, etc. 

And all of this is only looking at things from the point of view of the impact of decisions by states with developed economies on their own states of affairs.  When developed economies go into deep recessions, it causes large harms at home, but it also causes massive harms in developing economies.  In the US, it means people lining up in foodbanks.  In India and the rest of the global south, it means starvation, death from preventable diseases, missed immunizations of children on a mass scale, and so on.

In climate ethics, it is well understood that a frank discussion of how much to discount the future is vital to making good policy choices.  It is time to bring that awareness to pandemic mitigation ethics.

Comments

[Greg Morgan]

Isn't it possible that the short term cost of the pandemic would be much higher if we did not try to mitigate the transmission of the virus? If this is a real possibility, then the debate is not really about how much to discount the future, but rather about which approach will have the lowest cost in the short term. Winsberg seems to assume that we are choosing a more costly option in the short term by keeping people home, but I am not sure we are. Without state mandated social distancing, it is quite possible that demand for many services would collapse anyway and depress the economy even more than the lockdown has.

[Deanna Kreisel]

Your essay contains the following errors of reasoning: 1. It compares two "costs" by abstracting out the main reason we are shutting down to begin with: to save human lives. If the saving of lives is not part of your "calculus," then of course the current measures will seem draconian. 2. It assumes that we must accept that bailouts will benefit the rich and corporations as opposed to paying a UBE or supporting small businesses, as if this were some sort of unavoidable natural truth. 3. It also assumes at the same time that we would spend all the lost trillions on climate change in the future, which at least in practice contradicts the previous unstated premise. 4. It also, as the first commenter points out, assumes that the (economic) costs of shutting down are greater than the economic costs of not shutting down, essentially begging its own question.