The paper focuses on Harold Hotelling's approach to time discounting in the context of the intertemporal allocation of exhaustible natural resources. In 1931, Hotelling introduces a positive discount rate when dealing with the “social value” or “total utility” derived from a resource. His position was in contrast with early economic literature on conservation, as well as with the point of view of Frank Ramsey, according to whom time discounting expressed an unjustified preference for the welfare of present generations over that of future ones. Hence, it has been argued that Hotelling dismissed ethical concerns. Using archival material, we find that, for Hotelling, economic questions should not be restricted to issues of economic efficiency; that his choice to discount utility – which he considered as analogous to a concrete benefit – at the interest rate is compatible with Ramsey's position; and, more broadly, that this choice does not preclude an ethical position on the desirable distribution of exhaustible resources through time. To Hotelling, ethics is implemented by politics, through fiscal corrections of the interest rate. Revisiting Hotelling on the articulation between ethics, allocative efficiency, and policies allows us to rethink the way we do that in current models using time discounting.
The paper focuses on Harold Hotelling's approach to time discounting in the context of the intertemporal allocation of exhaustible natural resources. In 1931, Hotelling introduces a positive discount rate when dealing with the “social value” or “total utility” derived from a resource. His position was in contrast with early economic literature on conservation, as well as with the point of view of Frank Ramsey, according to whom time discounting expressed an unjustified preference for the welfare of present generations over that of future ones. Hence, it has been argued that Hotelling dismissed ethical concerns. Using archival material, we find that, for Hotelling, economic questions should not be restricted to issues of economic efficiency; that his choice to discount utility – which he considered as analogous to a concrete benefit – at the interest rate is compatible with Ramsey's position; and, more broadly, that this choice does not preclude an ethical position on the desirable distribution of exhaustible resources through time. To Hotelling, ethics is implemented by politics, through fiscal corrections of the interest rate. Revisiting Hotelling on the articulation between ethics, allocative efficiency, and policies allows us to rethink the way we do that in current models using time discounting.
Titre
en
Time discounting in Harold Hotelling's approach to natural resource economics: the unsolved ethical question
Auteur(s)
Marco P. V. Franco1
, Marion Gaspard2
, Thomas Mueller3
1
UFMG -
Universidade Federal de Minas Gerais = Federal University of Minas Gerais [Belo Horizonte, Brazil]
( 196923 )
- Av. Antônio Carlos, 6627, Pampulha - Belo Horizonte - MG - CEP 31270-901 BRAZIL
- Brésil
2
TRIANGLE -
Triangle : action, discours, pensée politique et économique
( 145357 )
- 15, parvis René-Descartes - BP 7000 69342 LYON CEDEX 07
- France
École normale supérieure de Lyon ( 6818 )
;
Université Lumière - Lyon 2 ( 33804 )
;
Sciences Po Lyon - Institut d'études politiques de Lyon ( 59112 )
;
Université de Lyon ( 301088 )
;
Université Jean Monnet - Saint-Étienne ( 300284 )
;
Centre National de la Recherche Scientifique UMR5206 ( 441569 )
3
LED -
Laboratoire d'Economie Dionysien
( 173249 )
- Université Paris 8 Vincennes-Saint-Denis - 2 rue de la Liberté - 93526 Saint-Denis cedex
- France
Université Paris 8 Vincennes-Saint-Denis EA3391 ( 11141 )
Langue du document
Anglais
Nom de la revue
Ecological Economics
(ISSN : 0921-8009, ISSN électronique : 1873-6106)
Publié par Elsevier
Revue non référencée dans Sherpa-Romeo
Vulgarisation
Non
Comité de lecture
Oui
Audience
Internationale
Date de publication
2019
Numéro
163
Page/Identifiant
52-60
Domaine(s)
Sciences de l'Homme et Société/Economies et finances
B - History of Economic Thought, Methodology, and Heterodox Approaches/B.B3 - History of Economic Thought: Individuals/B.B3.B31 - Individuals
Q - Agricultural and Natural Resource Economics • Environmental and Ecological Economics/Q.Q3 - Nonrenewable Resources and Conservation/Q.Q3.Q30 - General
Q - Agricultural and Natural Resource Economics • Environmental and Ecological Economics/Q.Q5 - Environmental Economics/Q.Q5.Q50 - General
Mots-clés
en
Harold Hotelling, exhaustible resources, intergenerational equity, natural resource economics, time discounting
Marco P. V. Franco, Marion Gaspard, Thomas Mueller. Time discounting in Harold Hotelling's approach to natural resource economics: the unsolved ethical question. Ecological Economics, 2019, 163, pp.52-60. ⟨10.1016/j.ecolecon.2019.05.005⟩. ⟨halshs-02169727⟩