Time

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The Importance of Time Preference

Time preference is the degree to which individuals value present consumption over future consumption. A lower time preference leads to better savings, long-term planning, and economic health. Bitcoin, as sound money, reduces time preference by preserving value over time, encouraging people to save. This shift fosters a culture of cooperation, trust, and efficient capital allocation, ultimately leading to a more prosperous Kingston. Understanding and adopting these principles can help build a thriving and sustainable future city for our children and grandchildren to inherit.

In our rapidly evolving world, understanding the concept of 'time preference' is crucial for grasping the paradigm shift involved in transitioning from soft fiat money to sound Bitcoin money.

Time Preference and Sound Money

When people save in a sound form of money, such as Bitcoin, which retains its value over time, they are more likely to adopt a lower time preference. This shift encourages long-term planning and rewards saving over short-term consumption. Sound money provides a stable store of value, preserving the purchasing power of savings and ensuring that hard-earned wealth is not eroded by inflation.

Investing inflationary fiat money (like the Canadian Dollar) into asset classes such as bonds, stocks, and housing makes sense in a world where individuals need to store the value they have generated through their effort and time but did not have access to Bitcoin or sound money. 

Taking on debt also makes sense for governments that essentially print inflationary fiat money; consider the incentives when a dollar of debt today is more valuable than the dollar needed repay the debt in the future. Over the past 16 years, government debt across Canada has been growing quickly. Combined federal and provincial net debt totaled $1.18 trillion in 2007/2008 Canadian dollars; data indicates that total net debt will likely reach roughly $2.18 trillion in 2023/24. (fraserinstitute.org -The growing debt burden)

Inverted, soft fiat money encourages spending regardless of long-term consequences because the currency is rapidly being debased. The incentive structure is simply skewed towards immediate consumption over saving. 

Better Cooperation and Capital Allocation

A community with a lower time preference, such as Kingston, benefits in several ways:

1. Long-Term Planning: Individuals and businesses are more likely to invest in projects that yield benefits over a longer period. This can lead to the development of infrastructure, education, and innovation that enhance the quality of life in Kingston.

2. Capital Formation: Saving in sound money encourages the accumulation of capital, which can be invested in productive enterprises. This creates a virtuous cycle of growth, as businesses expand and create more job opportunities, fostering economic strength and prosperity.

3. Cooperation and Trust: When individuals and businesses in Kingston adopt a long-term perspective, it builds a culture of trust and cooperation. People are more willing to enter into mutually beneficial agreements, knowing that their investments and efforts will be rewarded in the future. This collaborative spirit strengthens the social fabric of the community.

4. Resource Allocation: Sound money ensures that resources are allocated more efficiently. Businesses and entrepreneurs can make informed decisions about where to invest, based on stable and reliable financial signals. This leads to better utilization of resources, reducing waste, and maximizing productivity.

Conclusion

By embracing Bitcoin, the principles of sound money, which in turn fosters a lower time preference, Kingston can build a more prosperous and cooperative community. Saving in a stable currency like Bitcoin ensures that the hard work and sacrifices of today are preserved for the future, promoting long-term planning and execution. As Kingston continues to nurture its culture, ideas, and education in the 21st century, adopting a lower time preference will ensure a better incentive structure. Bitcoin is for our kids!

Please read Parker Lewis' book "Gradually Then Suddenly"