“Two steps forward and one step back.” “It is hard to get ahead when all you do is fight fires.” “Urgent stimuli require urgent responses – no time to wonder where the journey ends.” Life can be hard. Or not… “Summertime, and the livin’ is easy”. No dolphin thinking here, Aesop is clear: ants have no fun, but the grasshopper is a party animal.
The common theme of these iconic images is an enduring cultural understanding that short-term thinking has risks. Risks run the gamut from personal to global, with time spans from seconds to the distant future. What else can we say about these risks?
Let’s begin with personal risks of short-term thinking with possible consequences on the seconds time scale. Did you run a yellow light today? Go through a green without checking cross traffic? Turn in front of an oncoming vehicle? (How close, how fast, and with how much general congestion would you do it again? Such turns assume they can be completed without something unanticipated happening ahead to prevent it. That’s predicting the future, and has risk.)
Moving up the time scale, how about hanging out instead of studying an important topic in a college class? Sure, many assignments really are unimportant! And grades alone say little about future success. However for the right topic, an hour of learning is probably statistically worth cash in terms of starting salary and lifetime earnings. Writing, technical skill development (depending on major), and so on are among possibly valuable topics. Similarly, if you smoke, every cigarette shortens life by an average 11 minutes, at least for men. If you don’t smoke, starting risks continuing. Short-term thinking, long-term risks.
As a final example, saving for your retirement years makes sense. But all too often, short-term thinking wins out and money is spent unnecessarily that would have been smarter to put into a retirement account. It is to compensate for this that the US and many other industrialized countries have systems in place to encourage retirement saving, imperfect though they often are.
Moving from individuals to groups, companies are groups within which many people spend much of their waking hours. Companies are notorious for short-term thinking. Most are much more interested in maximizing performance over the next year than they are in maximizing it over the next 10 years – but which actually makes more sense?
The same tendencies are found at the national government level as well. British Prime Minister Neville Chamberlain proclaimed “peace in our time” on Sept. 30, 1938. Yet on Sept. 3, 1939, he declared war on Germany. Similarly, politicians in democratic societies regularly manage their country’s affairs with their eyes glued to the next election. Longer-term national interests are thus de-emphasized, hardly a desirable tendency. Politicians in non-democratic countries are subject to similar forces.
The ultimate result is suboptimal leadership, which can only hurt countries in their competitions with other nations as history ebbs and flows. Short-term thinking must, therefore, explain in part an important historical phenomenon that humanity has been condemned to repeat with annoying regularity: the parade of nations that achieve world superpower status only to lose it. From Genghis Khan to the Roman Empire, Portugal to Spain to the twelve years of Germany’s 1000-year reich, Great Britain to Mother Russia…. If the cycle continues, who will be next?
Humans now live in a global village; events in one location can affect other locations thousands of miles away. For example, climatologists have determined that CO2 emissions here contributes to global warming here, there, and everywhere. Risks from potential pandemics like bird flu, as well as existential risks like asteroid impact, nuclear war, and nuclear or supervolcanic winter are of concern to everyone everywhere – or should be. Short-term thinking about such issues increases long-term risks and costs. Thus the real cost to future generations of CO2 emission now may be high, but the current cost is very low: just squirt it out the smokestack.
True cost is, logically, some composite of current and future costs. Thus the rational approach is to understand the true cost, then determine how to save on true costs by prophylactic spending now. As long as (true costs) – (prophylactic spending now) > 0, the world is better off with the prophylactic spending now, as expensive as it might be. If spending is painful, then less pain now is better than much more later. Yet short-term thinkers naturally focus like a screaming laser beam on the “pain now” part of the very different concept, “less pain now.” Long-term thinking means understanding that difference.
Why do people risk short-term thinking? Given the negatives of short-term thinking, one might well ask why it is ever done. Even if thinking short-term leads to the wisest course of action, thinking long-term would lead to the same result. That’s why we call it wise. Yet people still do insist on thinking short term. The following table gives some reasons why.
| Reason |
Example |
Comment |
| Unwillingness to delay gratification |
Procrastinating, while unpleasant, seems better than tackling something anxiety-producing head-on. |
Leading to the next row… |
| Slippery slope obscures longer term effect |
Any one procrastination event may be harmless but, added up, they risk missed deadlines and poorer results. Another example: every nuclear weapon made deters enemy attack (good), but leads toward threat of MAD (mutually assured destruction, bad). |
People know about slippery slopes and still procrastinate, leading to the next row… |
| Urges and impulses of non-rational origin |
You want to not procrastinate, but procrastinate anyway. |
Adolescents can act on impulse as though they think they are immortal. Even adults often think they really are immortal, perhaps because it is logically impossible to imagine what not existing feels like. |
| Poor incentive structuring |
In the 2008 financial meltdown, US bank boss bonuses were disbursed from Bush bailout billions. |
The bailout was pushed through by claiming an emergency, showing the manipulative value and chaotic results of shouting “fire!” as an incentive in a crowded theater. |
| Failure to understand long term consequences |
The former Easter Island civilization cut down all palms, leaving no way to build watertight boats. |
What could the person who was cutting down the last palm tree have possibly been thinking? Does modern civilization face analogous situations? |
| short term fluctuation obscures long term trends |
Long term global warming is harder to take seriously because the vast majority of years do not set a heat record. |
Even without fluctuations, slow change can be hard to both see and care about (also called ‘creeping normalcy’) |
| urgent fire fighting requires ignoring longer term risks |
In a famine, people will eat the seed grain. |
If there is no seed left to plant, there is no next harvest, and the famine worsens. |
Table. Some cases of short term thinking.
What can we do?
Go ahead and think short term, when appropriate. For example, a salesperson in the midst of working on the next sale should focus on the sale (and its commission) without being distracted by concerns that the company might go under along with the position. Such concerns are for later. But even the short term goal of making a commission on a sale is a useful step in the long term goal of earning a living. Ergo, both short and long term thinking sometimes produce the same result. Put more strongly, short term thinking, justified by long term thinking is long term thinking.
Know when to think long term. Let’s suppose you wish to drive to someone’s house located 5 miles to the northwest. Thinking short term, you soon find a road going due northwest and take it, only to discover that the road curves around in a circle and leaves you going back southeast on the same stretch on which you were going northwest a couple of minutes ago. Luckily you soon find another road going approximately northwest. Taking it, you soon reach a T intersection and are forced to turn right or left, both directions that do not get you any closer to your destination. Going right because, direction-wise, it is a little better than going left, you travel miles out of your way before finally getting to a bridge over the river, after which you make your way to your destination without too much further trouble. Having learned your lesson, next time you consult a map or go on-line for directions, avoid the two previous wild goose chases, and end up taking another bridge that you missed the first time but is a much better choice.
Whether you are traveling, picking next semester’s college classes, taking the next step in your career, engaged in shuttle diplomacy in the middle east, or doing selective breeding for crop improvement, the principle is the same: compared to short range planning, longer range planning tends to zig-zag less, leading to better results. That’s why it makes sense to save for retirement, vote for politicians with vision instead of a talent for manipulating the emotions, and have your own personal strategic plan. As Covey puts it, “Begin with the end in mind.”
Choosing time horizons. Would you prefer a free dinner coupon at your favorite restaurant good for the next seven days, or good for a week starting next year? How about this one: would you prefer to spend your retirement savings now, or save it to spend after retirement? (Assume for the sake of argument that the money in it now keeps exact pace with inflation.) Thus a long term view requires considering different horizons various distances into the future, and not looking only a single long term horizon (and besides, how long would it be?). When people increasingly account for longer term horizons not only in their own thinking but that of people with more influence in society, then long term social goals will have a greater role in public discourse. Then, the future of nations as well as humanity will be safer and wealthier.
As the free dinner coupon example suggests, distant time horizons can affect valuation. People care about their and their childrens’ futures. Do they care less about their grandchildrens’ futures? Great-grandchildrens’ futures? What about 10, 100, or 100,000 generations hence? How much do we (and should we) care about our descendants 10 million years from now when, if they exist, they will likely resemble us less than we resemble the chimpanzees from whom we split with 95% probability a mere 5-7 million years ago?
How to think and act long term. This may be trickier than it seems. The farther into the future one wishes to consider, the more uncertainty applies. Peoples’ careers take unexpected turns. The best-laid plans can go awry. Next-day weather forecasts are usually not bad, jokes aside, but 10-day forecasts are pretty iffy; 20-day forecasts can be little more than statements of historical averages. Uncertainty expands the farther ahead the horizon; “Eat dessert first.” The classical approach (and you can do it yourself with pencil and paper) is to list the possible futures, the probability and net value of each, and calculate a future’s true value as its net value x probability. A 10% chance of ending up with $1 million thus has a true value of $100,000. Decision theory experts call the $100,000 the “expected value” even though with the only possible values being $1 million or nothing, $100,000 can hardly be expected! Experts also sometimes realize that not everything is directly financially measurable and so use ‘utility’ instead of money in the calculations.
Mathematics aside, not surprisingly, the ability to delay short term gratification for longer term rewards has been shown to result in higher achievement, even among young children. Teaching this skill would thus be a worthwhile goal. Another approach is to advance the reward (i.e. the gratification) ahead of the thing that it is supposed to reward. Paying for a service before it is performed does that for the provider, but risks poor performance, while paying after does it for the payer, but risks extra demands and nonpayment. When feasible, avoid buying goods on credit (“buy now, pay later”), which provides gratification now for delayed payments at the cost of extra payments (interest); a cost to the lender it is the risk of inability to pay back the loans, which caused the recession of 2008-10.
Upgrading ‘the system.’ Even times far in the future will eventually become now. It will be good if things are as good as possible when they do arrive. Short of optimizing the integral of the expected utility of the density function of the predicted goodness of each time point from now to eternity assuming hyperbolic discounting of future valuations to be not only an ethnocentric psychological law but a cultural universal and law of nature as well (I know you might not want to do that!), why not ask your country and the world to at least be in as good a shape as possible in a generation or two instead of just next year? Even hyperbolic discounting doesn’t explain why being in good shape when today’s children come of age is not only intrinsically desirable, it is also likely to be a good foundation for their children to do well too.
Let us shift our attention briefly from the overall good to competitive goodness: if your country does better than other countries over the 20 years or so, then other coutries will be less able to mess with the well-being of your children. In the current (and historical) environment of amoral, cutthroat international competition, that’s worth thinking about. (Also worth thinking about: the human race and the people in it would be better off if said cutthroat environment were improved.)
A world run by long term thinking is made of countries governed that way; such countries are based on organizations that work that way, organizations made of ordinary people with the habit of long term thinking. To construct such organizations, countries (and if you think big, maybe a new world order), hire people who think long term. Electing is a kind of hiring, and education can be tuned to help people learn to both perform and recognize successful long term thinking. But mainly, someone who thinks that way likes to do so, has references and successors from previous jobs who say they did it, and whose previous actions show long term benefits.
To help people think long term, organizations can use scenario simulation, which involves investigating the implications of possible alternative futures. This approach is already much used in military planning. Taking the natural next step, why not legally require publically owned corporations to createa and maintain long term strategic plans, and to use decision making processes that explicitly refer to them? Types of goals that run counter to the national interest could be disallowed, which is helpful because then desirable goals will tend to have a bit of extra influence, at least, by virtue of being written down.
A brand new system. One might easily argue that a new and better system beats patching up the same old system with scotch tape and baling wire. The current system encourages risk. Only a small percentage of athletes who give years of mental and physical energy to their sports will make it professionally, but the percentage of those who don’t take that risk who make it is close to zero. The situation is similar for pop musicians. Moving from the individual to the national and global levels, the goal of economic growth in and of itself is often given precedence over other useful goals that can be conceived (e.g. employment, safety, happiness, fairness, health, etc.). This leads to society giving second class consideration at best to risks to individuals as well as to more widespread risks like global warming, famines, and global pandemics. (At least this is better than governmental authoritarianism, which is another serious problem.)
Radically new systems based on goals other than those present-day countries currently use provide new alternatives. Most countries heavily weight criteria like economic activity, persistence of (an authoritarian) government or, as in the case of China, both. Yet history shows that new systems can be designed and tested. Some are failures; the challenge is to find one that actually works better than the current inefficient, inequitable, and risk-naive systems.
Further Reading
“Summertime”: name of an aria composed by George Gershwin for the 1935 opera Porgy and Bess. The lyrics are by DuBose and Dorothy Heyward and Ira Gershwin.
“…dolphin thinking…”: Strategy of the Dolphin, D. Lynch and P. L. Kordis, Ballantine Books, 1990.
Aesop, Aesop’s Fables, many editions and arrangements exist.
“…every cigarette shortens life by an average 11 minutes”: a Web search such as:
“11 minutes” cigarette life returns many links to relevant information.
“Adolescents can act on impulse as though they think they are immortal.” V. F. Reyna and F. Farley, Risk and Rationality in Adolescent Decision Making: Implications for Theory, Practice, and Public Policy, Psychological Science in the Public Interest, vol. 7, no. 1, Sept. 2006, http://www.psychologicalscience.org/pdf/pspi/pspi7_1.pdf.
“Even adults often think they really are immortal…”: Billions of adherents of various major religions believe that their sentient essences are, indeed, immortal. See also J. Bering, Never say die: why we can’t imagine death…why so many of us think our minds continue on after we die, Scientific American, October, 2008, http://www.sciam.com/article.cfm?id=never-say-die.
“The former Easter Island civilization cut down all palms…”: J. Diamond, p. 419 and chapter 2 of Collapse: How Civilizations Choose to Fail or Succeed, Penguin Group, 2005.
“As Covey puts it…”: S. R. Covey, The 7 Habits of Highly Effective People, various editions and publishers.
“…time horizons can affect valuation…”: L. Borghans, A.L. Duckworth, J. J. Heckman, and B. ter Weel, The economics and psychology of personality traits, Journal of Human Resources, 2008, vol. 43, no. 4, pages 972-1059. http://www.sas.upenn.edu/~duckwort/images/Borghans_Duckworth_etal_JHR_2008_v43_n4.pdf.
“…the chimpanzees from whom we split …”: S. Kumar, A. Filipski, V. Swarna, A. Walker and S. B. Hedges, Placing confidence limits on the molecular age of the human–chimpanzee divergence, Proceedings of the National Academy of Sciences (PNAS), Dec. 27, 2005 vol. 102 no. 52, pages 18842–18847, http://www.pnas.org/content/102/52/18842.full.
“Eat dessert first.” Part of the quote “Life is uncertain. Eat dessert first.” Attributed to US writer E. Ulmer, http://thinkexist.com/quotation/life-is-uncertain-eat-dessert-first/347441.html.
“…time horizons can affect valuation…”: L. Borghans, A.L. Duckworth, J. J. Heckman, and B. ter Weel, The economics and psychology of personality traits, Journal of Human Resources, 2008, vol. 43, no. 4, pages 972-1059. http://www.sas.upenn.edu/~duckwort/images/Borghans_Duckworth_etal_JHR_2008_v43_n4.pdf.
“Teaching this skill would thus be a worthwhile goal.” W. Mischel, Y. Shoda, and M.L. Rodriguez, Delay of gratification in children, chapter 15 of Social Psychology: A General Reader, edited by A. W. Kruglanski and E. T. Higgins, Psychology Press, 2003, pages 202-211.