Econofail

Modern economic practice appears to be doomed due to our artificially high discount rates on the future. Simply put, people that aren’t alive yet can’t participate in pricing at the present. This primarily effects depletion rates of things that take a long time to naturally regenerate, such as the environment, natural resources, sovereign credit, etc. Individuals fail to price in the preferences of great-great-grandchildren, let alone the soon-to-be massive developed middle class of China and India. In theory, an artificial intelligence could solve our problem, assuming friendliness is possible and is achieved. Somewhat paradoxically, it seems our pricing would improve and thereby reduce the chances of market failure and extinction (due to running out of resources before we can leave the planet) by extending lifespans of living humans.

It is important to remember that the dwindling supply of a resource does not cause a problem as long as a market has time and ability to function freely and prices adjust to approximate value. The market will never run out of supply if there exists a demand and pricing is able to incorporate all market participants. See: whale oil

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