Robert Solow on Sustainability
By David Henderson
A few of his points:
1. Like David Friedman, he emphasizes that we don’t know much about what the future will bring.
2. He argues that we fail to weight heavily enough the desires of those in the future. For him a 5 to 6 percent interest rate is prima facie evidence of that. But when I consider that the next generation is likely to be better off than we are, I don’t see it.
3. He points out that governments tend to discount the future even more than the private market does. This undercuts his argument that the market doesn’t do a sufficient job of taking account of future generations: sufficient compared to what?
4. He thinks that population growth in poor countries is the “largest single danger to sustainability in the world economy.” There’s not a lot of Julian Simon-like thinking in Solow.