Economist Channel

Derek Parfit's 1984 work, Reasons and Persons, is one of the most important works on moral philosophy. It put forward an account of ethical decision making rooted in a philosophical conception of rationality, identity, and time. It has had a substantial impact on discussions of morals and ethics across a wide range of domains. It is also highly relevant to behavioural economics, in particular in understanding inter-temporal choice. 

The book is divided into 4 sections: the first "Self-defeating theories" deals with rational choice in the context of interconnected decisions; the second "Rationality and Time" develops an account of inter-temporal choice that questions our received notions of time; the third "Personal Identity" develops an account of identity based not on continuity but rather on mental connectedness; the fourth section discusses the nature of obligation to future generations. The book consists of 20 chapters as well as appendices, totalling 154 subsections each containing important ideas. The four parts of the book also interconnect and build to a startling set of ideas on how we should ethically behave towards others, our future selves, and future generations. The book's concepts have substantial relevance for economists. One example is his well-known "repugnant conclusion" and "non-identity problem", one potential consequence being that future generations should not be factored into policy considerations as different courses of action will simply create different future generations who, providing their existence is preferable to them than non-existence, will be grateful to have been born. Most relevant to the type of work we discuss on this blog, Shane Frederick has developed Parfit's ideas on psychological connectedness to future selves in order to examine inter-temporal choice.

Rather than attempt the task of summarising the relevance of Reasons and Persons for behavioural economics, I provide here one example for the purpose of illustration. Chapter 8 "Different Attitudes to Time" examines whether we are neutral with regard to time. If we are valuing a reward or punishment should it matter to us whether we receive it now, in the future, or in the past? A large part of behavioural economics is based on the idea that people will value present rewards more highly than future rewards, and that this will be accentuated when the time horizon is nearer. However, the idea of valuing past rewards is not something that is often discussed. 

At first glance, it seems like a very odd idea. For example, take the choice below (which is my clumsy construction): 

A: You will receive 100 pounds in a week, which you must spend on something you really enjoy. 

B: You will learn that you received 100 pounds last week, which you spent on something you really enjoyed and subsequently forgot about. 

Assuming that both experiences are equally enjoyable, it seems unlikely that anyone would prefer to have had that experience in the past rather than to have it available as a future option. Arguably, this is because we experience time as moving forward from our present state. An experience that happens to us in the past can only be valuable if it provides us with some element of present or future enjoyment. For example, if B led to us meeting someone that we became friends with, it may be rational to prefer B over the prospect of A. But the key point is that we do not place a value on the experience of B in itself because it is a past event that we no longer remember. 

Can we imagine conditions where we value past experiences without regard for any present or future benefits deriving from them? Parfit gives the example of someone learning that their mother had died. Should it matter to the person how she died? Given any information about this refers to something that is in the past, should the person then be indifferent? Consider the case where the person learns that their mother had endured many months of intense pain prior to death and compare this to the case where the person learns that their mother had died painlessly, surrounded by loved ones, after a brief illness. There are many objections one could raise about the precise set-up and I would certainly encourage people to read the very detailed passage by Parfit to fully appreciate the thought experiment. But it seems clear that the valuation of past experience is not just due to future utility considerations, such as the effect on family members and so on. We feel bad that our mother would have suffered and we want to avoid this, even if the event is in the past. Puzzlingly, this probably does not apply to our own past experiences. For example, Parfit discusses the case where you are conscious during a medical operation but then given a drug to make you sleep and forget the experience. On waking up, would it matter to you whether the operation had been painful or not? Compare this to your preferences immediately before the operation. 

The above examples are contained in one chapter that makes a far more wide-ranging point about the nature of time attitudes. This chapter itself is nested in a section that outlines a theory of temporal decision-making and this, in turn, is nested into a full theory of ethical decision making. But, even in isolation, the idea already makes us think about a number of assumptions we rarely question including how we experience time and whether our valuations are necessarily just related to future and present experiences, as opposed to past experiences. Questioning the assumption that we only value present and future experiences can then lead to us to question how we incorporate time into valuation more generally. Parfit goes on to do this in an ingenious way in the rest of the book.