| Chapter 1: | Instincts |
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preference. Neoclassical economists generally assume that people prefer present goods to future goods. In other words, we would rather consume now than later. As a result, people must be paid interest to induce them to save because saving requires us to delay consumption. Veblen contended that our concern for the young might induce us to save and invest simply in order to acquire more wealth for our children. As Veblen said about our parental bent,
In the simplest and unsophisticated terms, its functional content appears to be an unselfish solicitude for the well-being of the incoming generation - a bias for the highest efficiency and fullest volume of life in the group, with a particular drift to the future; so that, under its rule, contrary to the dictum of economic theorists, future goods are preferred to present goods [Ibid. 46].
Veblen was quick to add that institutions and other instincts also affect our behavior, and will therefore affect the degree to which our parental instinct manifests. When the instinct of parenthood is strong, people will delay gratification in order to help their children. When the instinct of parenthood is weak and the self-regarding instincts are strong, children may suffer. Instant gratification may displace concern for the next generation. People with short time horizons do not worry much about preparing children for the future. The broader lesson is that it is dangerous to draw sweeping conclusions on the basis of only one dimension of human behavior. It is just as misleading to predict human behavior solely on the basis of the instinct of parenthood as it is to predict human behavior solely on the basis of self-interest.