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A while back, a three part bit on long term planners was written. A bit fanciful, vampires, royal families, and long lived individuals were all tossed around as ways to get us back on track (or at least hitting a wall) with some much needed long term planning.
This weekend, while discussing this with a few folks, a tangential question was put forward – how did we lose the long-term planning meme in society, or how did it get so edged out by short-term thinking? For sure, long-term planning by societies has been done in the past. Some prime examples:
- Roman aqueducts
- New York City and water planning
- Oxford University and their oak beams, although the story may be apocryphal.
- Japanese management of their forests
Some may cite your own 401K as evidence of long term planning, but this may not really qualify, for two reasons. For one, the 401K, although useful to some, has only been around for a few decades. The second, is that the growth of one’s 401K might be predicated on a growth mechanism rooted in the stock market, and the emergence of corporations in the 19th century – and one that ironically may be implicated in the lack of long term planning.
The theory that was put forward was that when corporations came on the scene, (especially when it became enshrined in law to report things on a quarterly basis), companies tended to focus on just that – quarterly, rather than quarter century results. As a predictable result, companies (and especially, the people up the food chain) didn’t care, so long as the stock price kept going up, no matter what the long term consequences.
- Do you think this theory makes sense?
- Did the existence of fossil fuels cause a foreshortening of time scales, as ‘apparent’ payback periods on any particular project become shorter?
- Family owned and private businesses seem to be better run, because they don’t have to worry about quarterly reports. However, they might suffer other effects, such as kids getting “soft” and used to a cushy lifestyle. Is this possibly another way forward, in solving the short-term thinking epidemic?
- Will a stock market crash cause short term thinking to die out? Or will so many people be scrambling for resources, that we may become even more short sighted?