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Maya Eden discusses two normative questions: (1) how should policymakers approach tradeoffs that involve different age groups, and (2) at what rate should policymakers discount the consumption of future generations? finding that these two questions are equivalent: caring more about the future means caring less about the elderly.

Image courtesy of interviewee. April 18, 2024

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This video video discusses the ethical considerations of intergenerational trade-offs that policymakers face, specifically focusing on how to balance the interests of current and future generations. It outlines two types of intergenerational trade-offs:

1. **Temporal Trade-offs**: These involve policies whose costs are incurred today, but benefits are realized in the future, such as climate change mitigation efforts. Policymakers must weigh immediate costs against long-term benefits to future generations.

2. **Cross-sectional Trade-offs**: These consider the interests of different age groups within the current generation. For example, during the COVID-19 pandemic, there was a debate about how to prioritize resources for younger versus older individuals, given that older individuals faced greater risks.

This video video highlights significant ethical debates around social discounting—the practice of placing less value on future benefits. A substantial body of literature suggests that it is unethical to discount future generations’ well-being, arguing for equality in the treatment of interests across generations. Notably, the paper also critiques implications of this stance, presenting the argument that prioritizing younger individuals' needs may be necessary if policymakers are to treat futures as equal to present-day costs.

Furthermore, the author reviews varying perspectives on social objectives, suggesting a need for policymakers to apply a contextual approach rather than adhering to a rigid framework. This video video concludes with a call for reevaluation of normative criteria guiding policymakers in navigating intergenerational trade-offs, encouraging the exploration of alternative frameworks that could yield more equitable outcomes.

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X-TIMESTAMP-MAP:LOCAL=00:00:00.000,MPEGTS=900000

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Great.

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Thank you so much for taking the time to talk to me. Yeah.

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So, I guess the main motivation is this, ethical

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or normative question of how policymakers should approach,

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intergenerational tradeoffs, right?

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And we can think of sort of two kinds

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of intergenerational trade-offs.

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Um, one that involves, sort of policies that have,

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cost and benefits that occur in very different

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time periods, right?

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So here's sort of a astic example is one

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of climate change, right?

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Where climate change mitigation is maybe costly today,

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but it will benefit future generation generations.

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And so there's, this normative question of, well,

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how do we weigh these benefits

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to future generations against the cost to people today?

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Um, now this of course comes up,

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in many other context as well.

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So any government investment program that sort

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of has benefits in the future,

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and also in the context of, well, currently since,

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we're now, in this war, with Kaza.

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I mean, you can also think of there as being some,

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intertemporal trade-offs there as well, right?

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So, I mean, there's,

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many people hold a sensible view

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that removing Hamas is going to be something

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that will benefit future generations,

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and that is going to lead to sort of fewer casualties,

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on both sides in the future.

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However, there's also obvious costs today to this war,

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both in terms of civilian costs,

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civilian casualties in Gaza,

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and in terms of, the risk to the lives

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of the 134 hostages, that are still held by Hamas.

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Um, and so even there, there's this question of

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how we trade off, these future benefits, which

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with these, very large costs today.

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Um, and so that's one type of,

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intergenerational trade-offs, that policy makers,

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face all the time.

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Um, there's also intergenerational trade-offs pertaining

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to sort of how do we, weigh the interests

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of different generations, in a given time period.

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Now, even today, we have members

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of different generations, right?

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So we have younger people

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and older people who are members of different generations.

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Um, and policymakers often, face the question of, well,

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how do do they, weigh the cost of benefits,

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of each of these groups, right?

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So this, the classic example here is in the time

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of covid where covid posed sort of a much larger risk

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to older people than to younger people.

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Um, and there was a question, well, how do we,

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weigh those costs, with, to the older people with,

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I guess the benefits of sort of remaining open, which were,

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more for younger people.

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Um, here again, this also comes up, in the context of,

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the hostages.

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So I mean, in the first hostage deal,

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there was a question whether to prioritize younger people,

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or older people, right?

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So there's, there was sort of lots of,

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hostages of different ages.

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What the Israeli government decided to do was to prioritize,

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the release of children

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and of elderly people, elderly women.

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Um, and you know, there's a question,

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going forward whether, well,

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first there's a question whether this was the right approach

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to, treat these two groups symmetric symmetrically.

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Um, and there's a question for the next deal of whether,

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you know, again, the government should be prioritizing the

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elderly hostages over the younger ones.

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Uh, and if so, why? Right?

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So there's sort of,

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all these different intergenerational trade-offs,

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that come up in many different contexts.

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And so, this paper is about, thinking about

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how policymakers should approach them.

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Yeah, so there's a very large literature on

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social discounting.

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Um, and for the most part,

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the literature on social discounting takes the view that,

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it's immoral

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or unethical to discount future generations.

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Okay? So there's sort of a very large literature starting

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from, Ramsey in 1928 that kind of argues

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that it's ethically indefensible,

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to discount future generations.

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And that, a policymaker should treat, the interests

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of all generations equally.

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Um, and this result has some appealing features.

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I mean, in particular in the context of climate change.

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This is the, view that's been advocated by, stern,

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that, you know, it's sort of,

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the only ethical alternative is to take into account,

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the cost of climate change that will be born

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by future generations in a way

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that we would if these costs were born today.

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Um, but it's not uncontroversial.

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So, there's also, another literature,

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and here I wanna mention the work of Lin Barrage,

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that shows that, you know, this, this intuitive,

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ethical premise that we should be treating,

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all generations equally,

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also has some very unintuitive implications.

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And in particular, what she shows is that this implies

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that governments should undertake these sort

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of massive government investment programs,

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and that they should massively subsidize investment in favor

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of consumption and in favor of poverty reduction

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and other things like that.

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Um, this also came up, this debate,

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debate came up more recently in the context of,

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the effective altruism movement,

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and in particular the work of, McCaskill,

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and Hillary Reeves.

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Um,

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and what they show is that if we are

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to take seriously this idea that, it's ethically,

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indefensible to discount the wellbeings

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of future generations,

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this should change radically the way we think about cause

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priorit prioritization, right?

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So, it sort of implies that we should, you know,

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care a lot about things like, mitigating extinction risk

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and sort of avoiding, detecting asteroid

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possible asteroid collisions, as opposed

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to focusing on more traditional causes like poverty

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reduction and, reducing mortality rates today.

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Um, so that's the literature, on that.

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Um, where my paper fits in, is in sort

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of a smaller literature that, thinks about

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the implications

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of the social discount rate in a cross-sectional context

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that is, sort of taking into account what it implies for

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how we prioritize the interests of different age groups.

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Um, here I wanna mention the work of Schneider Traeger,

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Winkler, as well as, the work of Wiggin, and

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before them, the work of Algo and Feld.

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Um, and what they point out is that,

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at least in the discounted utilitarian framework,

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which is the standard normative framework that people use

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for, evaluating policies, the extent to which,

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the social objective, cares about the future

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relative to the present, is positively related

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to the extent to which it cares about the interest

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of the young relative to the old.

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And so, where my paper fits in, is trying to explore,

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first of all how general this insight is if we sort

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of think about other alternative normative frameworks,

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but also exploring, quantitatively,

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what its implications are.

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And so, one of the goals of this paper is

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to just map out quantitatively what is possible,

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in terms of how much we care about the future relative

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to the present,

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and how much we care about, young people

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and, relative to old people.

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Um, and the findings there is that there's sort

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of a real tension, right?

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That there's, in some sense no middle ground that,

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if you care, a lot about the future,

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this means you should really heavily prioritize the interest

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of the young over the old,

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and that in fact, the only way to kind

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of value the interests of both groups more

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or less equally, is to, discount the future at a a rate

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that's similar to the market rate.

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Yeah. So, and the discounted utilitarian framework,

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the social objective is, just a discounted sum

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of people's lifetime utilities.

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Uh, now a person's lifetime utility is a function of sort of

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what that person consumes throughout their lifetime.

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Uh, and it's generally assumed in this framework,

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as well as in the other frameworks that I consider,

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that the social preference relation is non paternalistic,

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in the sense that if we just think about how,

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society values consumption

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for a single individual in different, ages, right?

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It's going to defer to that individual's preferences.

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So, in other words, if people,

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care more about their consumption earlier in life,

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the social welfare function is gonna have

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that feature as well.

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Now, what happens in the discounted utilitarian framework is

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that if we care about everybody's lifetime utilities

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equally,

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and if indeed people,

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care more about consumption earlier in life,

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the social welfare function is also going to,

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prioritize the consumption

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of younger individuals over older individuals, right?

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Um, and, you know, I, I guess a way to see this is just

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that, you know, if everybody cares more about,

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consumption more, when they're young, if we have

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to choose between giving someone, a unit

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of consumption when they're old versus when they're young,

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you know, the non paternalistic logics as well, you know, in

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that case, we should give it

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to them when they're young, right?

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Um, and then if we value the, lifetime utilities

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of all generations equally, this would also imply

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that we approach the trade-offs across

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people in a similar way.

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So we would sort of always prefer to give a unit

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of consumption, to younger people over, giving

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that unit of consumption to older people.

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And I'm gonna push you on then, what were, what,

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what are the ways forward from your paper?

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Can you discuss those?

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Yeah. Um, so what are the ways forward?

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Uh, so I think, you know, on a technical level, there's,

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two possible ways forward.

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Uh, the first one is to, accept the model,

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but then also to accept its implications, right?

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Um, now in this case, you're faced with a choice.

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You can either, follow, you know, the reasoning

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that it's ethically indefensible to discount the utilities

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of future generations.

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Um, but in that case, you have to accept the implication

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that the interests of the young,

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are much more important than the interest of older people.

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Um, so just to sort of give some concrete numbers,

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what this implies is that an extra dollar to,

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a 20-year-old is, just as valuable

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as an extra $20 to, an 80-year-old, right?

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Uh, so as a policymaker, if you're faced between, you know,

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policy that will either increase the income of 80 year olds

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by $20, or the income of a 20-year-old by $1, you have to go

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with the, the $1.

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Um, and it's hard to get away from that implication.

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Uh, so that's sort of one alternative.

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Uh, another alternative is to, to,

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reject the idea that the lifetime utilities

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of future generations should matter just as much

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as the lifetime utilities of people today.

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Uh, now there's some interesting work exploring this

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possibility, based on the idea

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that perhaps policymakers have,

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special obligations towards,

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people today towards their contemporaries,

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which would allow them to, in effect discount benefits

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to future generations.

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Um, so that's one possibility.

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Uh, another possibility is to,

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reject the model, right?

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And I think there's two ways in which you

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could go about doing that.

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Uh, one is to reject the assumption

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that social preferences should be non paternalistic, right?

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So it's sort of at the heart of this tension is this idea

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that, you know, people make the right decisions

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with respect to their own consumption and saving.

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Um, one might disagree with this, right?

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So in particular, one might say that, well,

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maybe people save too little for the sake

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of their own future, and people should be

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saving more, right?

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So this type of sort of paternalistic

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approach would allow you to simultaneously,

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discount future generations, at a zero rate.

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So care about them equally, to as much

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as you care about people today,

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and care about the interest of older people just as much

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as you care about the interests of younger people.

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Uh, so that's one, one approach.

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Um, a different approach,

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which I think is interesting is to reject this idea that,

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policymakers should,

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should have one single social objective that's independent

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of the policy question that they face, right?

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So, at the heart of the analysis that I do here,

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and sort of at the heart of theological approach, which we,

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take in economics, there's this idea

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that all policymakers should always strive

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to maximize some abstract notion of social welfare,

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independent of what is the policy question that they face.

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Uh, and I think that this idea is, you know, it has,

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some advantages, but I think it also has limitations.

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And so I think pushing against that idea

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and thinking about a more context

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dependent social objective, might be a good way forward.

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So in terms of conclusions, to me,

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the strongest conclusion is that it's time to go back

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to the drawing board, in terms of thinking about

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what is the normative criterion that policymakers,

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should, should follow when,

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when facing intergenerational trade-offs.

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I mean, to me, this tension is really pointing,

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at a shortcoming of the normative framework that we use.

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Um, and also it goes a little bit against this,

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this consensus in the literature that, you know, the,

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obviously the only ethically defensible thing, is to,

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treat future generations in the same way

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that we treat people today.

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Um, yeah.

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So I would sort of, encourage people to think more,

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about all of the implications of, of this assumption,

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and to try

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and come up with alternative normative frameworks, that,

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that might have, better, better implications.

Ethical Approaches to Intergenerational Trade-offs

00:00:00 - Great. Thank you so much for taking the time to talk to me. Yeah. So, I guess the main motivation is this, ethical or normative question of how policymakers should approach, intergenerational tradeoffs, right? And we can think of sort of two kinds of intergenerational trade-offs. one that involves, sort of policies that have, cost and benefits that occur in very different time periods, right? So here's sort of a astic example is one of climate change, right? Where climate change mitigation is maybe costly today,
00:00:36 - And so there's, this normative question of, well, how do we weigh these benefits to future generations against the cost to people today? now this of course comes up, in many other context as well. So any government investment program that sort of has benefits in the future, and also in the context of, well, currently since, we're now, in this war, with Kaza. I mean, you can also think of there as being some,
00:01:08 - So, I mean, there's, many people hold a sensible view that removing Hamas is going to be something that will benefit future generations, and that is going to lead to sort of fewer casualties, on both sides in the future. However, there's also obvious costs today to this war, both in terms of civilian costs, civilian casualties in Gaza, and in terms of, the risk to the lives of the 134 hostages, that are still held by Hamas.
00:01:40 - how we trade off, these future benefits, which with these, very large costs today. and so that's one type of, intergenerational trade-offs, that policy makers, face all the time. there's also intergenerational trade-offs pertaining to sort of how do we, weigh the interests of different generations, in a given time period. Now, even today, we have members of different generations, right? So we have younger people and older people who are members of different generations.
00:02:16 - how do do they, weigh the cost of benefits, of each of these groups, right? So this, the classic example here is in the time of covid where covid posed sort of a much larger risk to older people than to younger people. and there was a question, well, how do we, weigh those costs, with, to the older people with, I guess the benefits of sort of remaining open, which were, more for younger people.
00:02:47 - the hostages. So I mean, in the first hostage deal, there was a question whether to prioritize younger people, or older people, right? So there's, there was sort of lots of, hostages of different ages. What the Israeli government decided to do was to prioritize, the release of children and of elderly people, elderly women. and you know, there's a question, going forward whether, well,

Addressing Intergenerational Trade-offs in Policy

00:03:18 - to, treat these two groups symmetric symmetrically. and there's a question for the next deal of whether, you know, again, the government should be prioritizing the elderly hostages over the younger ones. and if so, why? Right? So there's sort of, all these different intergenerational trade-offs, that come up in many different contexts. And so, this paper is about, thinking about how policymakers should approach them. Yeah, so there's a very large literature on social discounting.
00:03:50 - the literature on social discounting takes the view that, it's immoral or unethical to discount future generations. Okay? So there's sort of a very large literature starting from, Ramsey in 1928 that kind of argues that it's ethically indefensible, to discount future generations. And that, a policymaker should treat, the interests of all generations equally. and this result has some appealing features.
00:04:19 - This is the, view that's been advocated by, stern, that, you know, it's sort of, the only ethical alternative is to take into account, the cost of climate change that will be born by future generations in a way that we would if these costs were born today. but it's not uncontroversial. So, there's also, another literature, and here I wanna mention the work of Lin Barrage,
00:04:52 - ethical premise that we should be treating, all generations equally, also has some very unintuitive implications. And in particular, what she shows is that this implies that governments should undertake these sort of massive government investment programs, and that they should massively subsidize investment in favor of consumption and in favor of poverty reduction and other things like that. this also came up, this debate, debate came up more recently in the context of,
00:05:21 - and in particular the work of, McCaskill, and Hillary Reeves. and what they show is that if we are to take seriously this idea that, it's ethically, indefensible to discount the wellbeings of future generations, this should change radically the way we think about cause priorit prioritization, right? So, it sort of implies that we should, you know, care a lot about things like, mitigating extinction risk
00:05:54 - possible asteroid collisions, as opposed to focusing on more traditional causes like poverty reduction and, reducing mortality rates today. so that's the literature, on that. where my paper fits in, is in sort of a smaller literature that, thinks about the implications of the social discount rate in a cross-sectional context that is, sort of taking into account what it implies for

Intergenerational Trade-offs in Policy Evaluation

00:06:26 - here I wanna mention the work of Schneider Traeger, Winkler, as well as, the work of Wiggin, and before them, the work of Algo and Feld. and what they point out is that, at least in the discounted utilitarian framework, which is the standard normative framework that people use for, evaluating policies, the extent to which, the social objective, cares about the future relative to the present, is positively related
00:06:59 - of the young relative to the old. And so, where my paper fits in, is trying to explore, first of all how general this insight is if we sort of think about other alternative normative frameworks, but also exploring, quantitatively, what its implications are. And so, one of the goals of this paper is to just map out quantitatively what is possible, in terms of how much we care about the future relative to the present, and how much we care about, young people
00:07:31 - and the findings there is that there's sort of a real tension, right? That there's, in some sense no middle ground that, if you care, a lot about the future, this means you should really heavily prioritize the interest of the young over the old, and that in fact, the only way to kind of value the interests of both groups more or less equally, is to, discount the future at a a rate that's similar to the market rate. Yeah. So, and the discounted utilitarian framework,
00:08:06 - of people's lifetime utilities. now a person's lifetime utility is a function of sort of what that person consumes throughout their lifetime. and it's generally assumed in this framework, as well as in the other frameworks that I consider, that the social preference relation is non paternalistic, in the sense that if we just think about how, society values consumption for a single individual in different, ages, right?
00:08:38 - So, in other words, if people, care more about their consumption earlier in life, the social welfare function is gonna have that feature as well. Now, what happens in the discounted utilitarian framework is that if we care about everybody's lifetime utilities equally, and if indeed people, care more about consumption earlier in life, the social welfare function is also going to,
00:09:08 - of younger individuals over older individuals, right? and, you know, I, I guess a way to see this is just that, you know, if everybody cares more about, consumption more, when they're young, if we have to choose between giving someone, a unit of consumption when they're old versus when they're young, you know, the non paternalistic logics as well, you know, in that case, we should give it to them when they're young, right? and then if we value the, lifetime utilities

Intergenerational Trade-offs and Policy Implications

00:09:43 - that we approach the trade-offs across people in a similar way. So we would sort of always prefer to give a unit of consumption, to younger people over, giving that unit of consumption to older people. And I'm gonna push you on then, what were, what, what are the ways forward from your paper? Can you discuss those? Yeah. so what are the ways forward? so I think, you know, on a technical level, there's,
00:10:13 - the first one is to, accept the model, but then also to accept its implications, right? now in this case, you're faced with a choice. You can either, follow, you know, the reasoning that it's ethically indefensible to discount the utilities of future generations. but in that case, you have to accept the implication that the interests of the young, are much more important than the interest of older people.
00:10:44 - what this implies is that an extra dollar to, a 20-year-old is, just as valuable as an extra $20 to, an 80-year-old, right? so as a policymaker, if you're faced between, you know, policy that will either increase the income of 80 year olds by $20, or the income of a 20-year-old by $1, you have to go with the, the $1. and it's hard to get away from that implication.
00:11:16 - another alternative is to, to, reject the idea that the lifetime utilities of future generations should matter just as much as the lifetime utilities of people today. now there's some interesting work exploring this possibility, based on the idea that perhaps policymakers have, special obligations towards, people today towards their contemporaries, which would allow them to, in effect discount benefits
00:11:48 - so that's one possibility. another possibility is to, reject the model, right? And I think there's two ways in which you could go about doing that. one is to reject the assumption that social preferences should be non paternalistic, right? So it's sort of at the heart of this tension is this idea that, you know, people make the right decisions with respect to their own consumption and saving. one might disagree with this, right?
00:12:20 - maybe people save too little for the sake of their own future, and people should be saving more, right? So this type of sort of paternalistic approach would allow you to simultaneously, discount future generations, at a zero rate. So care about them equally, to as much as you care about people today, and care about the interest of older people just as much as you care about the interests of younger people. so that's one, one approach.

Redefining Policymaking Objectives and Ethics

00:12:51 - which I think is interesting is to reject this idea that, policymakers should, should have one single social objective that's independent of the policy question that they face, right? So, at the heart of the analysis that I do here, and sort of at the heart of theological approach, which we, take in economics, there's this idea that all policymakers should always strive
00:13:25 - independent of what is the policy question that they face. and I think that this idea is, you know, it has, some advantages, but I think it also has limitations. And so I think pushing against that idea and thinking about a more context dependent social objective, might be a good way forward. So in terms of conclusions, to me, the strongest conclusion is that it's time to go back to the drawing board, in terms of thinking about
00:13:55 - should, should follow when, when facing intergenerational trade-offs. I mean, to me, this tension is really pointing, at a shortcoming of the normative framework that we use. and also it goes a little bit against this, this consensus in the literature that, you know, the, obviously the only ethically defensible thing, is to, treat future generations in the same way that we treat people today.
00:14:38 - So I would sort of, encourage people to think more, about all of the implications of, of this assumption, and to try and come up with alternative normative frameworks, that, that might have, better, better implications.

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