Re: Lets be sensible

[Ted Winslow <winslow@xxxxxxxx>]

Paul writes:

>
> Seems inconsistent to you -- but not to me!.  Older people know they are
> going to die -- and if they "know" mortality tables can calulate the
> probability of life for each of the followingg next year, two years,
> etc.
>

and

>
> It is sensible for the elderly to think there is a possibility of a chronic
> disabling disease -- (even if the probabilities are small for even aged
> cohorts)---while younger people still believe themselves immortal and
> always healthy and cannot see the possibility of such a disabling situation
> occurring to them.

"True uncertainty" is found where "about these matters there is no
scientific basis on which to form any calculable probability whatever.  We
simply do not know."  In the passages I've just quoted you explicitly (and
sensibly) claim that "chronic disabling disease" and "death" are not
"uncertain" in this sense, i.e. you explicitly treat them as "uncertain" in
a sense inconsistent with Keynes's idea of "true uncertainty".


>> Here increased saving and liquidity preference are treated as "sensible"
>> responses to the increasing "true uncertainty" of illness and death as we
>> age.  In what sense does it become "more" true as we age that "we simply do
>> not know" that eventually we will become terminally ill and die?
>>
> >
> Yet the empirical evidence is that people over 65 (adjusted for income
> level) tend to have a lower marginal propensity to consume then people at
> the same income level who are in younger cohorts!

I pointed to an alternative explanation - one consistent with Keynes's
premises about the psychology of saving - in an earlier e-mail.

> For Keynes, a key aspect of the psychological basis of saving is denial of
> death.
>
> In "Economic Possibilities for Our Grandchildren" he looks forward to a time
> when, though "there will still be many people with intense, unsatisfied
> purposiveness who will blindly pursue wealth",
>
> "the rest of us will no longer under any obligation to applaud and encourage
> them.  For we shall enquire more curiously than is safe today into the true
> character of this 'purposiveness' with which in varying degrees Nature has
> endowed almost all of us.  For purposiveness means that we are more
> concerned with the remote future results of our actions than with their own
> quality or their immediate effects on our own environment.  The 'purposive'
> man is always trying to secure a spurious and delusive immortality for his
> acts by pushing his interest in them forward into time. He does not love his
> cat, but his cat's kittens; nor, in truth, the kittens, but only the
> kittens' kittens, and so on forward for ever to the end of catdom.  For him
> jam is not jam unless it is a case of jam tomorrow and never jam today.
> Thus by pushing his jam always forward into the future, he strives to secure
> for his act of boiling it an immortality."  (vol. IX, pp. 329-30)
>
> As we age, we move closer to death.  It seems to me, therefore, that the
> "empirical facts of propensities to consume by age cohorts" are, on Keynes's
> psychological premises about saving, a reflection of the the increasing
> difficulty of denying the certainty of death as we age.  On Keynes's
> premises, increased saving is an irrational response to certainty rather
> than a "sensible" response to true uncertainty, an irrational response to
> the certainty that "in the long run we are all dead."

As I pointed out, this explanation is consistent with the explanation he
himself gives for liquidity preference increasing with age:

> "Most men love money and security more, and creation and construction less,
> as they get older; and this process begins long before their intelligent
> judgement on detail is apparently impaired.  Mr. Wells's preference for an
> adult world over a juvenile sex-ridden world may be right.  But the margin
> between this and a middle-aged money-ridden world is a narrow one."

There is a modern psychology that confirms Keynes's view of the psychology
of saving and liquidity preference.  His view is also very close to Georg
Simmel's.

"In so far as the contradictory types of capacities embodied in money lend
it a sublimated sense of power before it is spent - the 'fruitful moment'
has, as it were, come to a halt - avarice is one form of the will to power
that is not transformed in its exercise and its enjoyment, thereby
illuminating the character of money as an absolute means.  This is an
important factor in explaining the avarice of old age.  Such a tendency
certainly may be expedient as provision for the next generation - although
this motive is usually not in the mind of the miser, since the older he gets
the less he is willing to part with his treasures.  Subjectively, what is
basic in old age is that, on the one hand, the sensual enjoyment of life has
lost its charm, and on the other the ideals lose their agitating power
through disenchantment and lack of nerve; thus there remains, as the last
goal of the will and of life, only the power that manifests itself partly in
the inclination of old people to tyrannize and in a mania for 'influence' on
the part of elderly people in high positions.  In part, however, this
results in avarice becasue the same abstract 'power' seems to be embodied in
the possession of money.  I consider it a mistake to envisage every miser as
being busy with the anticipation of all available enjoyments, all the
attractive possible uses of money.  Rather, the purest form of avarice is
that in which the will does not really go beyond money; nor is money treated
as a means for something else, not even in the imagination.  On the
contrary, the power that money-stored-up represents is experienced as the
final and absolutely satisfying value.  For the miser, all other goods lie
at the periphery of existence and from each of them a straight road leads to
the centre, to money.  The whole specific sense of enjoyment and power would
be misinterpreted if one were to reverse this direction and wished to lead
it back again from the terminal point to the periphery.  For the power of
the centre would be lost as power it it were to be transposed into the
enjoyment of specific things.  Our essential nature is based on the duality
of dominating and serving, and we develop relations and forms that do
justice to both these complementary drives in a variety of combinations.  In
contrast to the power that money confers, the lack of dignity in avarice is
well expressed by a poet of the fifteenth century who stated that whoever
serves money is 'his slave's slave'.  Actually avarice is the most
sublimated, one could almost say caricatured, form of inner subjugated
existence in that it makes us a servant of an indifferent means as if it
were the highest purpose.  Yet on the other hand, avarice is supported by
the most sublimated feeling of power.  Here too, money displays its
fundamental nature, namely, to permit an equable decisiveness and purest
presentation of our antagonistic endeavors.  In money, the mind has created
a form of the greatest scope which, operating as pure energy, increasingly
separates the poles of the mind, the more unified it represents itself -
that is, as mere money, which rejects every specific determination." The
Philosophy of Money, pp. 244-5

Ted
--
Ted Winslow                            E-MAIL: WINSLOW@xxxxxxxx
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