Time preferences

Time Preferences

Lex Fridman and Saifedean Ammous discussed the concept of time preferences extensively in an episode of the Lex Fridman Podcast. Here are some key insights:

1. Definition and Importance:

   • Time preference is the degree to which people prefer the present over the future. High time preference means prioritizing immediate gratification, while low time preference involves planning and saving for the future 1.

2. Civilization and Time Preferences:

   • Ammous explains that the advancement of civilization is linked to lowering time preferences, where people increasingly prioritize the future. He ties this to the stability offered by hard money standards like gold, which allowed people to save with confidence 1.

3. Taking Risks:

   • Fridman and Ammous discuss how having savings (like "gold in the mattress") can encourage taking entrepreneurial risks. Historical examples from the late 19th century show how the gold standard facilitated widespread innovation by providing financial stability 2.

4. Personal Mortality:

   • Ammous mentions valuing time highly and ensuring it isn't wasted, reflecting on mortality and the finite nature of life. This philosophy aligns with low time preference by maximizing meaningful use of time 3.
     • 

       1

       Lowering Time Preference

       01:53:10
     • 

       2

       Taking a Leap

       02:03:54
     • 

       3

       Valuing Time and Mortality

       04:11:40

These discussions highlight the balance between immediate enjoyment and prudent planning for the future, both on a personal level and within broader economic systems.