Souvenirs from Oxford, part 1: why are we neglecting the future?

Politicians and corporate leaders are engaging in short-termism. The people and the environment are paying the price for the tendency to disregard the future.

Where does this short-termism stem from – and what can we do about it? This was the topic of discussion at a Conference hosted by the Oxford Martin School, where I gave a presentation on the experiences of our Parliamentary Committee for the Future. You can watch a video of the Conference online (Part 1 and Part 2).

The drivers of short-termism were described by Professor Simon Caney of the University of Oxford. The future is disregarded in decision-making processes due to factors such as ignorance and uncertainty. We humans have a natural tendency to ignore “creeping problems” of the kind which seem invisible or just too abstract – while some people, unfortunately, are mainly driven by self-interest.

In economics, there is a tendency to place greater value on current costs and benefits than future ones (discounting). But economists are not the only ones guilty in this respect; it is also true in everyday life: if we are given the choice between 100 euros today or 110 euros in a month’s time, many of us would take the 100 euros.

I suspect that we all find it easy to relate to another of the drivers: procrastination. This refers to choosing inaction over action, putting off tasks wherever we are not compelled to act.

Many of our existing incentives also encourage short-term thinking. Executives must satisfy their shareholders within a quarterly time-frame, while politicians are tied to the 24 hour news cycle.

Drivers of short-termism result in a range of problems which call for a variety of responses. There is no one-model-fits-all solution. However, Caney explains that effective solutions to short-termism share a few common characteristics.

The first is effectiveness: the response needs to have an impact. Second, the action must be politically feasible and sustainable, i.e. able to withstand winds of change sweeping the political arena.

The third requirement is moral legitimacy. The best way to achieve this is through open and inclusive decision-making processes that lead to majority outcomes.

But when we are defending the human rights of future generations, what precisely is it that we are defending? Who gets to decide what is in the best interests of future generations?

The Commissioner for Future Generations of Israel had to take a stand on a law ensuring the social inclusion of handicapped young people, which would put pressure on public finances. Which will serve posterity more: a balanced economy or equal rights?

The Ombudsman for Future Generations in Hungary had to consider the construction of a biomass facility on a World Cultural Heritage site. Which is more important to serving the best interests of future generations, safeguarding cultural heritage or combating climate change?

This all goes to show that long-term policy-making is anything but plain sailing. However, a broad range of tools can be deployed – each with its own strengths and weaknesses. These will be discussed further in part two of this blog (to be published on Thursday 4 December).