Temples and God’s Discount Function

March 26, 2007 | 15 comments
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I think that one of the reasons that God commanded Brigham Young to build the Salt Lake Temple was to signal his discount function.

“Discount function” is a fancy economics term for describing how much you value the future. We don’t think about this much, but a great deal of what we think of as misbehavior can be accounted for in terms of differing valuations of the future. Generally speaking, one doesn’t want to deal with someone who steeply discounts the future, ie doesn’t value it much. The reason for this is that such a person has weaker incentives to avoid profitable behavior now that might have high costs in the future. On the other hand, a person who does not steeply discount the future is likely to be a better person to deal with because they are more likely to avoid opportunistic behavior with short term pay offs.

In his fascinating book Law and Social Norms, for example, Eric Posner argues that many business norms – such as the fact that bankers wear expensive clothes and work in expensive buildings – can be explained as a way of signaling that one does not steeply discount the future. For example, if I buy an expensive building for my business, I am in effect saying, “I am going to be here for a long time because I just bought this expensive building that it will take me decades to pay for. Therefore, I must have a high value on the future, and you should place greater trust in me.” In other words, Veblen was wrong: conspicuous consumption is not an exercise in class differentiation but rather in credibly signaling personal preference about the future.

Now consider the belief that the world will shortly end. This is likely to lead you to value the future far less in many ways. Certainly, if you examine the history of Mormons in Missouri, for example, it is fairly clear that they did not place a particularly high value on future relations with their neighbors. Indeed, Missouri is, among other things, a good case study in why millennial beliefs tend to make you into a worse citizen. Now fast forward to perhaps the greatest moment of discount functions in Mormon history: 1890.

By 1890, the federal government had incarcerated several thousand Mormons for violating anti-bigamy laws, Mormons had been completely disenfranchised in Idaho, all polygamists were disenfranchised in Utah, and congressional legislation was pending that was going to disenfranchise all Mormons regardless of where they lived. Wilford Woodruff was faced with a question that one could couch in economic terms: How steeply did the Lord wish him to discount the future? If the future was not that valuable to Him, then Wilford would direct the Saints to hang on to polygamy, accept the further legal sanctions that would result, and trust in the imminence of the millennium for a solution. On the other hand, if the Lord did not discount the value of the future, then Wilford would direct the Saints to stop polygamy as away of avoiding future costs. This is what President Wilford said:

The Lord has told me to ask the Latter-day Saints a question . . . . The question is this: Which is the wisest course for the Latter-day Saints to pursue – to continue to attempt to practice plural marriage . . . . , at the cost of the confiscation and loss of all the Temples . . . ? . . . . The Lord showed me in vision and revelation exactly what would take place if we did not stop this practice. If we had not stopped it, you would have had no use for . . . any of the men in this temple at Logan.

In part it would seem, God did what a banker does. He signaled his commitment to the future by investing in expensive buildings. Wilford interpreted the signal (and others one assumes), accordingly, assumed that God did not discount the future, and acted accordingly.

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15 Responses to Temples and God’s Discount Function

  1. Ardis Parshall on March 26, 2007 at 9:58 pm

    What a fascinating tool to use in evaluating millennial beliefs! I suppose it’s as valid when you look at investment of labor, and not just at investment of dollars and cents? This reminds me of the line in the last Wilford Woodruff lesson last year, where he said something like “I live as though the Second Coming were tomorrow … but I still plant peaches.”

  2. TMD on March 27, 2007 at 12:20 am

    There are two problems with the argument. First, the signal was sent long before Wilford was thinking about the issue, and was interpreted differently at the time–it’s my sense that Brigham and many of the other saints had fairly millenialist interpretations of their activity in the 1850′s (incl., quite likely, WW). So, for your argument to work, the signal must work with different meanings in different times–first, one congruent with a large discount factor, then one congruent with a small discount factor. (By your account, no new signal was sent with regard to discount factors.) This, it seems to me, is incongruent with traditional rational signalling models.

    If anything (and I believe that this is a stretch), the revelation triggers “fact-free learning” (Gilboa, Schmeidler, and some others), that is, a re-analysis of past events in the absence of a new signal event. In other words, a new interpretation not formed through bayesian updating but through a reanalysis of past events. The reason that I believe that even this is a stretch is that it implies that WW was trying to divine HF’s will in the absence of direct revelation on the matter (which I address as I do only because you seem to be suggesting that WW had to connect some dots, rather than merely listening), and I’m not at all sure I stipulate to that. (Indeed, this is, it seems to me, the second problem in the argument.)

    Additionally, though more tangentially to the argument, I don’t think a social norm approach is the correct way to analyze this kind of a situation. By their very nature, the acts of God are unique acts (and better analyzed as signals, if one must try to apply rational choice theory to HF), rather than reflections of social behavior.
    Social norms work differently from individual acts. Unlike unique signalling acts, social norms with a rational core (or at least a possible rationally explicable core) accumulate a range of explanations and legitimzing rationales. Individual signals are most effective when they lead to differential changes in beliefs (think of separating equilibria), and this generally obtains when there is sufficient common information for each side to fully understand the nature of the signal being sent. Because even rational social norms will very often fail to send these clear signals (though they may reveal some information, particularly as they are violated, that infomation relies on folk theorems etc.), they are by nature less informative than a signal in a perfect or substantially common information environment would be. And God has access to perfect info…

  3. grego on March 27, 2007 at 1:00 am

    “In his fascinating book Law and Social Norms, for example, Eric Posner argues that many business norms – such as the fact that bankers wear expensive clothes and work in expensive buildings – can be explained as a way of signaling that one does not steeply discount the future. For example, if I buy an expensive building for my business, I am in effect saying, “I am going to be here for a long time because I just bought this expensive building that it will take me decades to pay for. Therefore, I must have a high value on the future, and you should place greater trust in me.” In other words, Veblen was wrong: conspicuous consumption is not an exercise in class differentiation but rather in credibly signaling personal preference about the future.”

    Or, it could signal that the majority of business will close their doors in not too many years…

  4. Ronan on March 27, 2007 at 1:41 am

    Nate,
    In the case of the church and its temples, is the purpose for their expensive sturdiness that they last through the “millennium”? In other words, it’s not that we’re any less millennial by building them. Mormons, even in 1890, thought the Second Coming wasn’t far off. But the temple had to survive 1000 years after that.

  5. Margaret Young on March 27, 2007 at 11:26 am

    Fascinating possibilities, Nate. I’m not sure I agree with you, but I think the idea is really intriguing. My questions come in the fact that very expensive temples had already been built and then abandoned by the Mormons (Kirtland and Nauvoo), so a precedent had been set which seemed to value the community more than its expensive (and in this case uniquely sacred) buildings. Of course there was much more of an investment in temples in Utah, because by the time President Woodruff spoke, there were several functioning temples. (If I’m recalling correctly, the SLC Temple was not yet finished.) But the Saints had found other places to perform Temple rituals–endowment houses and even Ensign Peak. The rituals themselves seemed of far greater importance than the place where they were performed.
    Still, some really interesting things to consider. Thanks, Nate!

  6. Frank McIntyre on March 27, 2007 at 11:57 am

    I think the Divine discount rate is actually listed in the sealed portion.

    These are nice ideas, Nate. I think it is worth thinking about what kind of discount rate we are talking about. For example, one reason to discount the future is because it probably won’t happen but will be replaced by a different one (the Millenial reign, for example). This idea is standard probability mixed with expected utility theory (the stuff Julie loves :)). Another reason is because, even though the future will happen, you can’t wait for it because you are impatient.

    It seems unlikely to me that God’s discounting is due to impatience, because I think he is perfectly patient. Also, it seems to me that God knows exactly which future path is going to occur (although this is the sort of thing that people can argue about in the extremities). If these are true, God may well not discount the future that _He_ knows will occur at all. And he will completely discount (ie, deem irrelevant) all futures that He knows won’t occur. (Like the one where I get super powers).

    So I agree that there was a discounting signal to Wilford Woodruff and all of us in that revelation. And it was probably more along the lines of hinting to _us_ that the Millenial future was more distant than many people realized, and so we should adjust our discounting of the temporal future accordingly.

    I am not sure if this is any different than the way you were thinking about it, but I thought I’d write it down anyway.

  7. Eugene V. Debs on March 27, 2007 at 1:00 pm

    It seems to me that both Veblen’s and Posner’s arguments are based on more than a little mindreading: we have to know that Banker O’Malley is thinking a) I need to keep up with banker Jones (in the popular shorthand for pecuniary emulation) or b) I am really confident, or wish to appear confident, that I’m going to be around for a long time. Since both theories are ultimately speculative and necessarily narrative generating, they cannot “disprove” each other. Posner offers one explanation, Veblen another–are they always already mutually exclusive?

    Indeed, Veblen’s theory of pecuniary emulation could also be applied to nineteenth-century temples. The temples could argue both that the church was going to stick around for a long time and that the church had wealth at its disposal. Employing Veblen would explain why the celestial room in the Salt Lake Temple looks like an ornate nineteenth-century hotel lobby. If we are going to have mansions above, then, as Veblen would suggest, it would be reasonable to expect that the reification of said heavenly mansions would look an awful lot like popular conceptions of their earthly counterparts.

  8. Nate Oman on March 27, 2007 at 1:16 pm

    Gene: Posner’s theory — unlike Veblen’s — doesn’t require that Banker O’Malley be thinking about signalling. It only requires that prospective customers distrust bankers in cheap suits. An economic signal need not be an intentional act.

  9. Eugene V. Debs on March 27, 2007 at 1:44 pm

    Nate–

    Then, to take your statement in #8 at face value, Posner read the minds of customers. There is probably no valid empirical evidence for your assertion that customers distrust bankers in cheap suits since, citing Veblen or Posner or both, bankers operating in the real world and not in some small-sample-size study don’t wear cheap suits. This assumption also requires that the majority of bank customers be able to tell the difference between suits. This is also a dubious proposition, since most of the adult population has some kind of bank account, but a relatively small proportion of the population even wears suits, let alone purchases them.

    Furthermore, your assertion that “an economic signal need not be an intentional act” does not exonerate Posner from reading the minds of the Banker. Again, where is the hard data supporting the unintentional nature of how bankers design their wardrobes or their banks? Are you really suggesting that in every case bankers make these decisions without regard to social norms, class distinction, and so on?

    I am not defending Veblen in absolute terms, nor am I saying that Posner is absolutely wrong. I think the act of a banker building a new building or a prophet building a temple makes decisions for complicated reasons. Throwing out a pretty good, though very difficult to prove, explanation of behavior–bankers want to appear wealthy and so build buildings that conform to pecuniary cannons of taste–because it conflicts with another pretty good, though very difficult to prove, explanation of behavior–bankers build expensive buildings because they want to project an image of stability–is very limiting.

  10. Nate Oman on March 27, 2007 at 3:34 pm

    Gene: I agree that Both Veblen and Posner necessarily make emperical assumptions to run their argument. I disagree with you that throwing out simplifying theories to help explain some phenomena is limiting. I get rather tired of folks invoking the inherent complexity of decision making as a theoretical get-out-of-analysis free card. It is the grad student seminar equivalent of answering “Keep the commandments.” Saying, “Things are more complicated and we need a more nuanced explanation” strikes me as something of an intellectual cop out: it is an “insight” that is essentially always true and for that reason trivial.

  11. Costanza on March 27, 2007 at 3:44 pm

    Of course it is limiting. ANY explanatory framework that performs its function correctly (that is, offers an explanation for some phenomenon) is necessarily limiting because it will likely exclude other explanatory models. That is something that both incorrect and correct explantory models have in common, so saying a model is limiting is not a critique of its power as model qua model, but rather a statement broadly applicable to such models in general.

  12. manaen on March 27, 2007 at 9:18 pm

    In other words, Veblen was wrong: conspicuous consumption is not an exercise in class differentiation but rather in credibly signaling personal preference about the future.

    The banker’s-building example isn’t about consumption but about, as you later call it, investment. Consumption and investment themselves signal different values about this life and eternity.

    However, the Church uses investment in buildings to signal a different difference in value between this life and eternity. The Palos Verdes Stake’s center is typically constructed, with painted-brick interiors and public-school-quality tables and chairs in the classrooms. The same would seem normal in a middle-class neighborhood but is noticeably humble among neighboring multi-million-dollar homes there on the hill. For that stake’s members to invite their friends is to itnroduce them to the same basic principles that have wealthy members donating time at the welfare cannery.

    Likewise, the Southwest LA branch (i.e. Watts) has the same kind of interior and furnishings, which are somewhat elevated for it’s neighborhood. Guests there are greeted with hope for a bettering of their current temporal lives, which the gospel typically does bring them.

    The values this suggests to me are (modest) quality and equality in this life and what we should value here are not our things but how they can be used to lift each other.

  13. abe on March 30, 2007 at 2:04 am

    It seems that CEOs who buy big houses do not signal what Posner suggests…

    http://www.slate.com/id/2162989/fr/flyout

  14. WestBerkeleyFlats on March 30, 2007 at 11:23 pm

    “Gene: Posner’s theory — unlike Veblen’s — doesn’t require that Banker O’Malley be thinking about signalling. It only requires that prospective customers distrust bankers in cheap suits. An economic signal need not be an intentional act.”

    Why would emulation need necessarily be a conscious act? Among Debs other insightful points is the notion that motivation is complex, and to some extent not entirely understood by the individual.

    As for the notion of discount function being useful in this analysis, I fail to see how it provides much benefit. It is obvious that LDS leaders such as Brigham Young thought in terms of long-range plans, even though they believed in a somewhat imminent eschatology, as did Wilford Woodruff. A better explanation of motivation for church leaders in the 1880s can be found it would appear in the degree to which they believed polygyny was a necessary practice in the church. John Taylor believed this and received a revelation that that the practice could not suspended. Wilford Woodruff believed differently.

    The notion that temple furnishings, which have also always struck me as aping the overfashioned lobby of a Victorian hotel, reflect pecuniary tastes is a useful one. Perhaps everyone’s favorite Socialist should be writing these articles.

  15. Nato on April 16, 2007 at 6:53 pm

    Lets look at the church as a company, its goal is to save souls.
    How many of you buy shoes from the guy selling them out of the back of his car? (some people do or he would not be doing it) but most people would rather go somewhere that has the “Bling” looks do count especially in here in America (and more so in Utah), I grew up in a poor ward, and the stinky families (poor hygiene, low social status) were not the ones that new people moving into the ward or converts, were introduced to they met first the up and coming, well groomed families, and then later they met the red headed stepchildren of the ward.
    I think that the fleeting beauty even if it is destroyed minutes later is still worthy of repect, (look at the sand drawing that the monks did in down town SLC was their any hope of that art lasting forever? No. But it was done anyway to make the moment better and add hope for the future.