I write these posts in order to explore how systems work, especially the unintuitive, unseen parts of them. One commonly experienced cause of unintended consequences in systems comes from when actors pursue immediate interests, or short-term thinking.
Short-term interest is one of the causes of unintended consequences listed by Robert Merton in his paper on “Unanticipated Consequences of Purposive Social Action” that I’ve referred to in the past (the other causes being error, ignorance, basic values, and the self-defeating prophecy). Merton actually called it the “imperious immediacy of interest,” but I’m sticking with “short-term interest” in this post.
Let’s look at what short-term vs long-term interests are, why we have them, and how they impact us in unexpected ways.
Whose timescale is our ruler?
How should we measure short-term (or immediate) vs long-term interests? Do we use metrics from our human lifespan, longer than that when thinking of the immediate next generation, or timescales measured in centuries or millennia, the longest humans can probably appreciate personally? Do we more often think of immediate as being as short-term as possible and measured in seconds, the time it takes to bring a coffee cup to our lips (after we’ve quit caffeine), the time to drive home vs walk, the time to ?
Which projects today tend to be mentally budgeted along the longest timelines? Infrastructure projects (sometimes government led, sometime private sector led), tax benefits (arguing that tax cuts will pay for themselves in so many years), environmental issues (climate change measured in decades or longer, species protection measured in generations). The list goes on. We find that decisions from centuries ago still impact the economic health of countries and peoples, such as colonial powers Spain, Portugal, Britain, France, and Holland.
How much confusion has the term “short-term” caused in disciplines that otherwise strive for precision? Short-term as I always knew it was something that you just felt, not something that you measured. That’s why I was surprised to learn that in economics there is a definition.
Short-term: The period during which at least one input is fixed — say a lease contract that forces the business to pay for a full year even if they should really abandon the location.
Long-term: The point at which there are no constraints — the period at which you can start to modify all inputs.
This is a little different from what Merton had in mind, I think (he wasn’t necessarily writing about economics either). Was he just writing about the personal feeling of short-term vs long-term? On a human scale, short-term can be a sliding scale ranging from right now, today, this budget cycle, this election. Apart from the short human-scale time, short-term always seems connected to an immediate goal, whether measured in hours or years.
That’s why, even without precision, I take short-term as defined by getting the actor through just one iteration of impact from their decision. Do X in order to get Y, but don’t consider Z or beyond.
Merton mentions the following types of short-term interest
“Physiological needs” – choosing what feels good in the short-term (sex, spending money, eating and drinking, entertainment) even when there are known long-term consequences. Many find it difficult to choose differently because of these cravings and their immediate benefits.
“Classical economics” – where individuals act in their own best interest without considering the whole system (Adam Smith’s Invisible Hand) and end up producing other outcomes for society which were outside of anyone’s intent. These decisions can be better — are often known to be better — than what planned economies do.
“Psychological generator of emotional bias” – or, we do things that feel good now rather than things that might be better later. Because of that, we avoid calculating long-term outcomes. Or even if we do the calculation we can’t fight the emotional bias.
Trade-offs – “irrational, in the sense that it may defeat the pursuit… of other values which are not, at the moment, paramount….” Short-term interests have immediate (or close to immediate) pay-offs. They often feel better. Short-term is easier to choose because the pay-off is seen more directly. Long-term is not.
Connectedness – an action “is not carried out in a psychological or social vacuum, its effects will ramify into other spheres of value and interest.” Change one thing and the effect ripples out elsewhere.
I’ll add a few more
They are missed. In many cases, we do not see that our actions come from prioritizing immediate interest. If it’s true that on average adults make 35,000 decisions a day (which includes big, thoughtful infrequent ones to ones so frequent we don’t think about them, like how large of a sip of coffee to take), It’s part error, part ignorance, part being overwhelmed. We can only thoughtfully choose on a small percentage of actions. The short-term interests are easier to judge than the long-term.
Your interests vs mine. Part of this problem comes from the diversity of interests expressed. One person’s short-term interests are not another person’s. The “short-term” factor can be different, as seen above and the “interests” can be different also. What results is a cacophony of different models for choosing.
This is where anything at scale can make a big difference. You do what’s best for you, I do what’s best for me, but when there are thousands or millions of “you,” my interests get swamped by yours. We saw this in the earlier post in everything from travel to home rentals.
They are unavoidable. There are many examples where people know that they are choosing only a temporary solution that will likely cause problems in the future. Yet they go ahead. This is not necessarily illogical. Different from the trade-off decision above, some decisions come where there are no better alternatives and the person choosing knows that eventually they will suffer consequences of their choice. In the short-term though, they know that they will benefit.
Some of the clear examples come from the world of work. People in jobs that are largely repetitive physical labor (underground mining, non-mechanized farming, parts of manufacturing, deliveries) suffer work-related injuries. In the past more than today, these injuries required that they eventually retire. With injuries and with age, they just couldn’t keep up the pace of work required. At that point, what do they do except rely on the generosity of family and neighbors (maybe the government in some cases)?
In knowledge work and with the fewer injuries and longer lifespans, what do people do if they cannot keep their lifestyle going after retirement? What keeps them stimulated for what might be decades to come? Or, if age-related health issues grow, does their insurance or their savings cover their needs? Would they have been better off making less money in jobs that provided longer-term health care options?
Once you start to look, you see the short-term / long-term trade-off everywhere.
Related to this, I’m making a prediction for the way aging baby boomers in the US and their lack of savings and access to health services will impact long-term outcomes. As this population ages and needs services for which they can’t provide, at scale, I expect some policy changes. It’s an uncomfortable thought, but with that generations’ problems of aging, retirement, savings, and health looming and their collective voting power, I predict that the legal option for assisted suicide will become mainstreamed in the next couple decades. It’s a way to handle choices made over the previous decades (without solving them). That option will in turn impact the way future generations choose to live.
Considerations
- Choose where to spend effort thinking long-term.
- Hedge against the collected consequences of others’ short-term choices.
- The prospect of anything at scale from others impacts your own long-term choices.