TIME PREFERENCE (IMPATIENCE)

the meantime. A single break in the thread of life suf-fices to cut off all the future. We stress the importanceof the present because the present is the gateway to thefuture. Not only is a certain minimum of present incomenecessary to prevent starvation, but the nearer this mini-mum is approached the more precious does present in-come appear relative to future income.

As to the irrational aspect of the matter, the effect ofpoverty is often to relax foresight and self-control and totempt us to “trust to luck” for the future, if only the all-engrossing need of present necessities can be satisfied.

We see, then, that a small income, other things beingequal, tends to produce a high rate of impatience, partlyfrom the thought that provision for the present is neces-sary both for the present itself and for the future as well,and partly from lack of foresight and self-control.

§7. The Influence of Time Shape

The concept of time shape of the income stream 6 isbest treated not apart from size but as combined with sizeand thus will constitute a complete specification of thesize at each successive period of time. Types of incomeof different time shapes are shown on the charts in Chap-ter I. Uniform income is represented in Chart 1; increas-ing income in Chart 2; decreasing income in Chart 3.Fluctuating income is represented in both Charts 2 and 3.

The fact that a person’s income is increasing tends tomake his preference for present over future income high,as compared with what it would be if his income wereflowing uniformly or at a slackening rate; for an increas-ing income means that the present income is relatively

* Cf. Landry, L’lnteret du Ca-pital, Chapter X, § 149, pp. 311-315;§150, pp. 315-317.

[ 73 ]