Against the social discount rate

Abstract

Cowen and Parfit argue against the use of a social discount rate in evaluating policies that affect future generations. They examine the standard justifications for discounting future costs and benefits—including the argument from democracy, the argument from opportunity costs, the argument from diminishing marginal utility, and the argument from special relations—and find each of them wanting. They contend that temporal distance is morally neutral and that the practice of discounting systematically undervalues the interests of future people. The essay concludes that a zero or near-zero social discount rate is required by considerations of intergenerational justice.