Bill Butler says that, because of Keynes, the winners in our crony-socialist society are the politically connected insiders, rather than the patient, prudent capitalists:
Time preference is an economic concept that compares time in relation to an individual’s need for material gratification. Time preference is a comparison, not a measurement. Time preference is immeasurable because it is, by definition, subjective. That is, each individual has a different time preference and each individual’s time preference can change over time. Individuals with a “high time preference,” e.g. newborns, prefer immediate material gratification to time. If these individuals have a need or desire, they do not like to wait. Feed me now or I will cry. People with a “low time preference,” e.g. capitalist lenders, have developed the immaterial virtue of patience, and accordingly have cultivated the ability to choose “time” over material gratification. Even the most patient capitalist at one time was an impatient, bawling newborn. That is the miracle of evolution. People are capable of change.
In one respect, the interaction of people with high and low time preference drives capitalism. People with liquid capital (lenders) agree to give up the immediate gratification that comes from enjoying that capital (spending it on cool stuff) to individuals who need it (cash-poor entrepreneurs and businesses) in exchange for either: (a) a piece of the business (equity) or (b) a loan, which really is a money-lease agreement where the high-time preference individual gets liquid capital (money) now and agrees to pay the low-time preference individual both the amount borrowed (principal) and rent on the borrowed money (interest) over a period of “time.” The borrower chooses money, the investor or lender chooses time (and interest).
It is no surprise that our current system was the spawn of a John Maynard Keynes, the born-on-third-base-and-acts-like-he-just-hit-a-triple English mathematician and lavender secret society aristocrat whose most famous quote, made in response to criticism of prudent, patient low-time preference economists who pointed to “long run” bankruptcy of his economic system, was:
“In the long run, we’re all dead.”
It is now the long run and we are not all dead. Although his followers are moribund, only Keynes is dead. The rest of the West is, as Keynes’ low-time preference critics predicted, bankrupt, a direct consequence of following Keynes’ bankrupt ideology for nearly 70 years.
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