§6. The Influence of Mere Size

Our first step, then, is to show how a person's impatience depends on the size of his income, assuming the other three conditions to remain constant; for, evidently, it is possible that two incomes may have the same time shape, composition and risk, and yet differ in size, one being, say, twice the other in every period of time.

In general, it may be said that, other things being equal, the smaller the income, the higher the preference for present over future income; that is, the greater the impatience to acquire income as early as possible. It is true, of course, that a permanently small income implies a keen appreciation of future wants as well as of immediate wants. Poverty bears down heavily on all portions of a man's expected life. But it increases the want for immediate income even more than it increases the want for future income.

This influence of poverty is partly rational, because of the importance, by supplying present needs, of keeping up the continuity of life and thus maintaining the ability to cope with the future; and partly irrational, because the pressure of present needs blinds a person to the needs of the future.

As to the rational aspect, present income is absolutely indispensable, not only for present needs, but even as a pre-condition to the attainment of future income. A man must live. Any one who values his life would, under ordinary circumstances, prefer to rob the future for the benefit of the present—so far, at least, as to keep life going. If a person has only one loaf of bread he would not set it aside for next year even if the rate of interest were 1000 per cent; for if he did so, he would starve in Edition: current; Page: [73] the meantime. A single break in the thread of life suffices to cut off all the future. We stress the importance of the present because the present is the gateway to the future. Not only is a certain minimum of present income necessary to prevent starvation, but the nearer this minimum is approached the more precious does present income appear relative to future income.

As to the irrational aspect of the matter, the effect of poverty is often to relax foresight and self-control and to tempt 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 being equal, tends to produce a high rate of impatience, partly from the thought that provision for the present is necessary both for the present itself and for the future as well, and partly from lack of foresight and self-control.