A correspondant writes in to say "I worry that free markets do not generally take a long-term view into account,...". I've often heard this view expressed. I wish we could suggest this to Mythbusters, but I think that Bullshit! would be a better show to tackle it.
Just as my correspondant worries about free markets, I worry that governments do not generally take a long-term view into account. What politician thinks beyond his next election? How *could* a politician think beyond their next election? Obviously taking a long-term view means doing things which hurt in the short run. If it didn't -- if taking a long-term view were free -- then everybody would do it. So, the politician who takes a long-term view at a short-term cost will be excoriated by his opposition.
That leaves individuals to take a long-term view. If individuals do it, then free markets will do it just as reliably as governments.
posted at: 06:26 | path: /economics | permanent link to this entry