"The Social Rate of Discount and the Political Economy of the Future in the 1960s"
William Deringer, Leo Marx Career Development Assistant Professor of Science, Technology, and Society, Massachusetts Institute of Technology.
Co-sponsored by the Graduate School of Arts and Sciences and the School of Engineering and Applied Sciences, Harvard University.
Sheila Jasanoff, Faculty Associate. Pforzheimer Professor of Science and Technology Studies, Harvard Kennedy School.
Lunch is provided if you RSVP via our online form by Thursday of the week before the event.
“Why do governments require citizens to sacrifice current consumption in order to undertake investments that will not yield their benefits until those called upon to make the sacrifice are all dead?” Few political-philosophical questions loom larger in this age of anthropogenic climate change. This particular phrasing of the question comes not from the 21st century, though, but fifty years earlier; its particular topic was not climate change, but water infrastructure projects, like dam-building. It came in a 1963 Quarterly Journal of Economics article on the economics of public investment, written by Harvard economist Stephen Marglin, part of a flurry of articles on the topic published in the 1960s. For Marglin and other economists, as well as many public-policymakers, the political question about sacrificing-for-the-future was most sensible as a question about a single mathematical variable: the “social rate of discount” employed in the formal cost-benefit analysis models used to assess government projects. Debates about such discount rates remain central to contemporary discussions of climate-change economics. By examining technical debates about public investment in the 1960s, this paper seeks to explain how that one particular calculative practice, social discounting, became the paradigmatic means of comprehending the political relationship between current and future generations in contemporary political economy. How was it that an arcane calculation, derived from financial practice, became the way modern polities make sense of citizens’ sentiments about the future?
William Deringer is the Leo Marx Career Development Assistant Professor of Science, Technology, and Society at MIT. He is a historian and STS scholar, whose research focuses on economic and political knowledge and the calculative practices through which they are made. Deringer’s first book, Calculated Values: Finance, Politics, and Quantitative Thinking in the Long Eighteenth Century (forthcoming with Harvard University Press in 2018), is a history of civic epistemology in Great Britain, which explains how numerical calculation first gained privileged authority as a medium of public knowledge. Whereas today numerical “facts and figures” are valorized for being impartial and indisputable, Calculated Values argues that numbers first came to garner special esteem in eighteenth-century public politics precisely because of their usefulness as tools of partisan conflict. He is currently beginning a new project on the history of “present value” calculations since the early-modern period, tentatively titled Discounting: A History of the Modern Future (in One Calculation).