Disincentivizing High Time-Preference Behavior is Key to a Libertarian Social Order

As aggression against private property rights within a society increases, private or institutional (i.e. theft by private citizens and theft by government agencies), so does everyone’s time preferences. Conversely, a decrease in aggression marks a decrease in time preference.

A high time-preference means you prefer present goods to future goods, even if waiting for future goods could mean a profit. This means consuming goods in the present. And a low time preference is preferring future goods to present goods, which requires the saving of present goods.




Both of these preferences are contagious, meaning that foregoing the consumption of present goods for the benefit of more highly desired future goods requires some amount of confidence about the future (i.e. a general expectation of security). As security increases, so does everyone’s expectations about the future.

Rampant crime disincentives saving and increases that society’s overall rate of time preference. This fundamental axiom of time preference does not change whether that crime is private, or institutional.

To be clear, institutional aggression against private property rights is when a government engages in wealth redistribution – the taking of wealth from one individual and using it for alternative uses against the consent of that individual.

In this way, it can be said that an increase in a society’s overall rate of time preference has a decivilizing effect on that society. Conversely, a lowering of a society’s overall rate of time preference has a civilizing effect.

From this, it can be reasoned that respect for the property rights of others is an overall benefit to everyone. If this can be justified by reason alone, there’s no reason to think that absent a territorial monopolist, that people’s ability to reason disappears. And from this it can be shown that respect for property rights was and is a naturally occurring social phenomenon.

If it can be said that an abundance of high time-preference individuals within a society is decivilizing, then any society that wishes to endure, must disincentive this tendency. It’s not enough to just be a proponent of property rights. You must also be wary of high time-preference behavior, that if increased, would lead to a diminishing of those rights.