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Instant Gratification Nation: Can We Still Sacrifice for the Future?

Old 07-22-08, 09:40 AM
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Instant Gratification Nation: Can We Still Sacrifice for the Future?

http://finance.yahoo.com/expert/article/economist/94722

In the late 1960s and early 1970s, researchers at Stanford University conducted a now-famous experiment using young children enrolled at Stanford's preschool facility. Experimenters sat the students at a table set with assorted objects that children of that age would find desirable (marshmallows, colored plastic poker chips, stick pretzels, and the like). The students were asked which of the objects they preferred.

Once that was determined, each student was offered an explicit choice that tested his or her ability to defer gratification: Get a reward now or a bigger reward later. The experimenter left the room, leaving a bell on the table in front of the student. If the student rang the bell before the experimenter returned, he or she would get a reward, albeit a less preferred one (a single marshmallow instead of two). However, if the student resisted ringing the bell until the experimenter returned (typically after 15 or 20 minutes), he or she would get something even better -- two marshmallows.

Self-Control Starts Early

The remarkable thing about the study is that a student's ability at age four to defer gratification is correlated with better outcomes much later in life, such as academic and social competence. For example, one follow-up paper found a statistically significant relationship between how long a student waited to ring the bell and -- more than a decade later -- their "ability to cope with frustration and stress in adolescence."

New York Times columnist David Brooks has cited this study and inferred that most social problems are rooted in an inability to defer gratification. He argues that for people with poor self-control "life is a parade of foolish decisions: teen pregnancy, drugs, gambling, truancy and crime." I agree. I can find no other compelling explanation for why someone would do something as utterly ridiculous as dropping out of high school, no matter how bad the school is.

But I'll see David Brooks and raise him one. I find myself asking an even bigger question: Is America as a nation losing its ability to wait for the second marshmallow? By that, I mean can we still muster the political will and personal sacrifice to make investments today that will make us richer and stronger 10, 20, or 50 years from now?

Educational Advances

I came to this question after having two experiences that were quite jarring when considered together. First, I read a chapter on the history of American education in "Handbook of the Economics of Education," a book that's only slightly less exciting than it sounds.

The chapter describes the economic impact of the two major developments that characterize American education policy over the last several centuries. First, states and communities (particularly in New England) were early to offer broad access to taxpayer-supported public education. State laws in the 18th century required towns of a certain size to support a primary school. By the beginning of the 19th century, the U.S. had the highest literacy rate in the world.

Second, the young nation was remarkably aggressive in creating public universities. In 1862, President Lincoln signed the First Morrill Act, providing 11 million acres of public land to the states to enable them to set up what are now known as the land-grant universities -- some of the preeminent research universities in the world to this day. Nearly every state joining the union after 1820 provided for a state university in its constitution.

Both of these developments (along with the later creation of high schools for the general public) help to explain America's remarkable economic performance in the 19th and 20th centuries. As a nation, we systematically set aside a lot of marshmallows so that we would become more prosperous decades, even centuries later.

Sacrificing the Future

After reading that chapter for a class I'm teaching, I had to prepare for a radio show on the economy. So I went to Barack Obama's and John McCain's Web sites to look at their economic agendas. To judge by both their plans, just about every major policy challenge can be addressed by giving some group more marshmallows now -- subsidies here, tax cuts there.

Which is nonsense. The definition of an investment, whether it's public or private, is an undertaking that requires foregoing consumption in the present in order to achieve higher consumption in the future. It's just like the marshmallows, only you get real money, or more life satisfaction, or something else worth waiting for.

I'm beginning to worry that Americans, both individually and in our collective decisions, are staring at the one marshmallow on the table for about six seconds and then stuffing it in their mouths. Not only are we sacrificing our future prosperity, in some cases we're gobbling up the marshmallows that rightfully belong to future generations.

A Bad Behavior Laundry List

Here are some of the things that strike me as worrisome:

1. Entitlements.

We've promised tons of marshmallows to the baby boomers in their retirement (and to the rest of us after that), and I have no idea where we're going to get them. If we do nothing to fix the big entitlement programs -- Medicare, Medicaid, and Social Security -- they'll essentially grow to consume all of our federal revenues in the coming decades.

It's not sustainable. Is either political candidate talking about this

2. Flat college and high school completion rates.

The economic benefits to education (and to skills in general) are huge and growing. Or, as Johnny Cochran might have said, "Those who learn will earn." For example, the wage gap between high school and college graduates is much larger than it was 30 years ago. That's a problem when our collective human capital is basically stalled. College completion rates for men are actually falling slightly.

3. America's near-zero savings rate.

We're basically spending everything that we make. (Ironically, economists used to say this wasn't much of a problem because home equity doesn't count in the official savings figures; this argument is now a fair bit weaker.)

This would appear to be a private problem; if you don't save for retirement, why should I care? But we now know from the mortgage meltdown that stupid private behavior can come back to bite us all in the rear end.

4. Chronic federal budget deficits.

This is simply the government version of the private savings problem. Most of the states are equally profligate as well. This is particularly unforgivable since the last decade has been a time of reasonable economic prosperity.

What excuse do we have for buying ourselves extra marshmallows and then leaving the bill for our kids? I think it's inexcusable that we haven't asked ourselves to pay for the Iraq War. We've asked volunteers to do the fighting, and we'll leave the bill for others, too.

5. A lack of vision for how ambitious collective endeavors can change the trajectory of our lives.

Where is our Manhattan Project? Our land-grant colleges? Instead, we get tax cuts. There are some good things about that, but we seem to have forgotten that tax cuts can't do anything that requires a major collective investment by society. Tax cuts could never have built the Interstate Highway System, one of the great public investments of all time.

Adventures in Nostalgia

I'll fully admit that this column may be a form of public policy nostalgia. Perhaps Abraham Lincoln's Web page was also full of subsidies and tax cuts, and it was only once in office that he dropped the land-grant-university bomb on an unsuspecting public (rather than, say, selling that land off to timber companies or to housing developers).

But it's worth thinking about. One of the follow-up studies using data from the Stanford marshmallow experiment begins, "To be able to delay immediate satisfaction for the sake of future consequences has long been considered an essential achievement of human development."

Can we still do that?
Very interesting article that I came across that I thought I'd share. I never really thought of the state of our nation in such terms, but I strongly agree with the author's points, with the exception of entitlements. I don't know enough to be able to judge whether it's a problem or not and the author doesn't seem to know either because he doesn't provide any figures. However, if it is a problem, I suspect it's more because money is being mismanaged by the government (and in all fairness not just this administration, but all the ones before it too).
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Old 07-22-08, 09:55 AM
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Great piece.

Mismanagement by government of money, time, and everything else is not dependent upon a political party - it's just the nature of people spending other people's money.
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Old 07-22-08, 09:57 AM
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I'm looking forward to reading the OP, but I think I'll save it for later today.
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Old 07-22-08, 10:10 AM
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I agree with the premise. I've been thinking this for a while. We're an instant gratificaiton culture in every way. It's terrible for the future.
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Old 07-22-08, 10:11 AM
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Can someone bold the important parts for me?
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Old 07-22-08, 10:22 AM
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Took me three marshmallows to get through the first paragraph.
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Old 07-22-08, 10:32 AM
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I think it would take WWIII for us to change the way we are. 9/11 didn't do it.

It's really stupid. Politicians play into it because it gets them elected, and obivously we elect those who give us instant gratification.

I wish we had the ability to elect someone who did things for 10 years into the future and that we would do with less to make that work. But we won't.

So give me mine.
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Old 07-22-08, 10:42 AM
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Originally Posted by JasonF
I'm looking forward to reading the OP, but I think I'll save it for later today.
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Old 07-22-08, 10:51 AM
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Georgie and the Israelis are doing their very damnest to ensure that WWIII takes off, so kvrdave's theory may be put to the test.

E
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Old 07-22-08, 10:54 AM
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Originally Posted by DeltaSigChi4
Georgie and the Israelis are doing their very damnest to ensure that WWIII takes off
Put down the Kevin Phillips and back slowly away from the table...
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Old 07-22-08, 10:55 AM
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Originally Posted by kvrdave
I think it would take WWIII for us to change the way we are. 9/11 didn't do it.

If there is a WWIII, my guess is that there won't be a me that needs to change.
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Old 07-22-08, 11:45 AM
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Conclusion - Phil Gramm was right. We are a nation of whiners. Or least we want our cake & eat it too.
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Old 07-22-08, 11:46 AM
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As I go through my daily life, I have "I Want it All" by Queen going on a loop inside my head.

Last edited by Groucho; 07-22-08 at 11:50 AM.
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Old 07-22-08, 12:05 PM
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On a similar note. I think as a nation, we've all become more of a bunch of independent individualists. It's everybody out for themselves. Forget the good of the nation or the common cause. If so and so can't cut it.....screw 'em! Next! IMO.....the death of true patriotism.
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Old 07-22-08, 12:25 PM
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Originally Posted by wabio
On a similar note. I think as a nation, we've all become more of a bunch of independent individualists. It's everybody out for themselves. Forget the good of the nation or the common cause. If so and so can't cut it.....screw 'em! Next! IMO.....the death of true patriotism.
Our government spends more now than any time in history to help out people. Or were you refering to charitable giving and donating time?
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Old 07-22-08, 12:54 PM
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I didn't bother to read the thread but I just wanted to post that this is just another typical bullshit liberal ploy meant to degrade America.
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Old 07-22-08, 02:10 PM
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Originally Posted by DeputyDave
I didn't bother to read the thread
I'm sorry, this was as far as I got before I decided to buy a lottery ticket.

Interesting that the piece advocated both liberal and conservative approaches to America's problems.
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Old 07-22-08, 02:24 PM
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Capitalism is broken. A nation trained to be gimme-gimme toddlers.
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Old 07-22-08, 02:33 PM
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Originally Posted by adamblast
Capitalism is broken. A nation trained to be gimme-gimme toddlers.
Which economic system promotes self-reliance more than Capitalism?
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Old 07-22-08, 02:35 PM
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Originally Posted by adamblast
Capitalism is broken. A nation trained to be gimme-gimme toddlers.
A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the public treasure. From that moment on the majority always votes for the candidates promising the most money from the public treasury, with the result that a democracy always collapses over loose fiscal policy followed by a dictatorship. The average age of the world’s great civilizations has been two hundred years. These nations have progressed through the following sequence: from bondage to spiritual faith, from spiritual faith to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency, from complacency to apathy, from apathy to dependency, from dependency back to bondage.
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Old 07-22-08, 02:47 PM
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Originally Posted by orangecrush18
Our government spends more now than any time in history to help out people. Or were you refering to charitable giving and donating time?
"good of the country" and "common cause" is NOT helping people out. It's not even about charitable giving or donating time.

It's about making decisions that look at the bigger picture and longer view rather than an immediate and personal one.

. . . . . . . . . . . . . . . . .

Without a binding influence, it is human nature to be selfish and impatient. That binding influence can be religion, a collective moral consciousness, or patriotism. Years ago, all 3 worked independently to produce that binding influence. The disdain for organized religion, relativistic morality or outright immorality, and the "enlightenment" of national criticism have eroded that influence.

It is highly unlikely that it can be turned around.
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Old 07-22-08, 05:12 PM
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- tax cuts.
- entitlements.
- social problems (teen pregnancy, drugs, gambling, truancy and crime).
- budget deficits.
- savings rate.
- subsidies.
- lack of vision.
- education policy.

Too many complicated issues crammed together to make a simple point.

I'm not saying his point is entirely wrong, but it's too simplistic.
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Old 07-23-08, 11:08 AM
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Originally Posted by orangecrush18
Which economic system promotes self-reliance more than Capitalism?
Self-reliance is a great thing, but not the be-all and end-all. A society must be able to make plans and stick to them, and voters are fickle.

Our representative democracy and capitalism have turned into something none-too-pretty, with serious overtones of corporate feudalism, fascist populism, and even corrupt monarchy. That's not to say that we can't self-correct, but we're way off the mark at the moment, in terms of the American Dream as an ideal.
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Old 07-23-08, 11:52 AM
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Originally Posted by adamblast
Self-reliance is a great thing, but not the be-all and end-all. A society must be able to make plans and stick to them, and voters are fickle.

Our representative democracy and capitalism have turned into something none-too-pretty, with serious overtones of corporate feudalism, fascist populism, and even corrupt monarchy. That's not to say that we can't self-correct, but we're way off the mark at the moment, in terms of the American Dream as an ideal.
I don't necessarily disagree. I do think it is silly to say that "Capitalism is broken. A nation trained to be gimme-gimme toddlers." It implies that the former leads to the latter. What we have turned capitalism into may need some repairs, but capitalism itself is not broken.
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Old 07-23-08, 12:26 PM
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Isn't it capitalism that has created this nation of mindless consumerism? What else did it?

Haven't we literally been trained from birth to want what 1) we don't need and 2) isn't good for us-- because someone can profit from selling it to us?
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