Alexandru Pătruti, PhD Candidate

Bucharest University of Economic Science Department of International Business and Economics

Faculty of International Business and Economics

TIME PREFERENCE, GROWTH AND CIVILIZATION: ECONOMIC INSIGHTS INTO THE WORKINGS OF SOCIETY

6, Piata Romana, 1st district,

010374, Romania

 +4.021.319.19.00

E-mail: le_peru@yahoo.com

Mihai Vladimir Topan, PhD Lecturer

Bucharest University of Economic Science Department of International Business and Economics

Faculty of International Business and Economics

6, Piata Romana, 1st district,

010374, Romania

 +4.021.319.19.00

E-mail:  topan_vlad@yahoo.com

ABSTRACT.Economic concepts are not mere ivory tower abstractions disconnected from reality. To a certain extent they can help interdisciplinary endeavours at explaining various non-economic realities (the family, education, charity, civilization, etc.). Following the insights of Hoppe (2001), we argue that the economic concept of social time preference can provide insights – when interpreted in the proper context – into the degree of civilization of a nation/region/city/group of people. More specifically, growth and prosperity backed by the proper institutional context lead, ceteris paribus, to a diminishing of the social rate of time preference, and therefore to more future-oriented behaviours compatible with a more ambitious, capital intensive structure of production, and with the accumulation of sustainable cultural patterns; on the other hand, improper institutional arrangements which hamper growth and prosperity lead to an increase in the social rate of time preference, to more present-oriented behaviours and, ultimately, to the erosion of culture.

Received: July, 2012

1st Revision: September, 2012

Accepted: Desember, 2012

JEL Classification:B53, D90, E21, E43, O10, O16, O43.

Keywords: time preference, social time preference, the interest rate, savings, growth, present-orientation, future-orientation.