Over the past twelve months, Stuart Kirk – former editor of the FT’s famous Lex column and former head of responsible investment at HSBC Asset Management – have become famous for calling out what he says is a racket in which vested interests are riding the ESG investing bandwagon and lining their pockets. In this piece has calls out another fad – long termism: “The ethical view that people living decades, centuries and millennia from now are as important as those plodding around today is called “long-termism”. It is also a crucial tenet of effective altruism, the newish philosophy that has been thrust into the news recently thanks to a follower named Sam Bankman-Fried, of FTX infamy. This so-called impartiality across generations is why the likes of Professor William MacAskill argue that “influencing the long-term future is a key moral priority of our time.”
Is it though? As Groucho Marx is often attributed with saying. “Why should I care about future generations. What have they ever done for me?” But even to pose this question more seriously these days is heretical — imagine doing so at the recent COP27 climate conference.”
Kirk then cites a real-world example of a government which eschewed long termism for (what Kirk calls) the right reasons: “I was working on a consulting project for one of the world’s largest sovereign wealth funds. It was in a small country, so the role of the fund was hotly debated, both in government and on the streets. Naturally there were the usual appeals to children’s grandchildren and a golden forever devoid of want. But to my surprise several parliamentarians said, hang on a minute. We have holes in our roads, now. We have underfunded hospitals, now. We have slums with no sewage, now. Why are we hoarding money for the year 2100?
They might have added: “Besides, our country may not even be around then.” We were in a volatile part of the world. But uncertainty is universal. Why do we devote so much effort to an unrealised future with a massive deviation in possible outcomes when events with a 100 per cent probability of occurring exist today? When I value a company, distant earnings are worth less than the same profits made in the near term.
Or imagine we incurred huge costs in 2019 worrying about the welfare of the 11bn people the UN predicted would be alive in 2100. The latest estimate from the University of Washington now has the global population at 8.8bn in that year. Oops! More than 2bn future people have just vanished.”
Kirk then goes on to explain that even if he agrees with you that the long-term matters just as much as the here and now, you will have to do math on how to balance long term wellbeing with short term wellbeing. Kirk then says that the smartest minds in the world have thought about this question for decades and not been able to reach any rational solution. Conclusion: focus on improving the world as it stands today.
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