The debasement of SA’s social fabric

Nearly a year ago we wrote about time-preference and how wealth creators tend to have a lower time preference than wealth consumers. Have a read, it is as relevant today as it was a year ago. For South Africans, it is particularly relevant as our leaders have an exceptionally high time-preference, they are grabbing at, and consuming, wealth created over the past century at a very rapid rate. If they aren’t consuming it themselves, they are handing it over to other wealth consumers via social grants, etc.

Linking with this theme, here is a very interesting passage Lew Rockwell spotted from Steven Pinker:

“In experiments beginning in the late 1960s, the psychologist Walter Mischel tormented preschoolers with the agonizing choice of one marshmallow now or two marshmallows 15 minutes from now. When he followed up decades later, he found that the 4-year-olds who waited for two marshmallows turned into adults who were better adjusted, were less likely to abuse drugs, had higher self-esteem, had better relationships, were better at handling stress, obtained higher degrees and earned more money.”

So as the government and in particular, the Reserve Bank, promotes consumption over savings-investment by forcing interest rates lower, the social and moral fabric of our country is being debased. This is how the Reserve Bank, by debasing the currency, also debases the social fabric.

This has been bothering me tremendously of late – that by far the bulk of the South African public has super high time-preferences. Wealth is being consumed by the day, very little provision is being made for the wealth of our kids and our kids’ kids.