Our Long-Term Thinking Shortfall
Is anyone looking more than five years out?
I fully intend to live another 50 years. At least.
This is more a statement of probability than aspiration. I’m currently 30, and the average life expectancy of a man living in New York is 80, give or take. Given that I’m a nonsmoker and I don’t do hard drugs, another 50 years seems very doable.
This scenario isn’t unique to me, or even to a special category of young people. The median American is 38 years old. Given typical life expectancies, we have (on average) about 40 years left.
So most of us will live to see 2057. I’ll probably live to see 2067.
It’s not unreasonable to believe that my son — who was born last year — will ring in the 22nd century. This is with current technology, putting aside the possibility of some sort of CRISPR-mediated Thiel-funded fountain of immortality.
Given that we’ll likely live to see these years, it’s remarkable how little we — and the institutions we rely upon— plan 30–50 years out. Who out there is planning for 2057?
Government? Elected officials usually aim to have something notable accomplished in time for the next election. Four to six years, max. And even when a politician does make a serious investment, big projects spanning multiple administrations can be easily reversed.
Corporations? In theory, many large companies plan five to ten years out. But most publicly-traded company executives would find that laughable given the prevalence of activist investors and the stock market’s what-have-you-done-for-me-this-quarter attitude.
Individuals? 60% of Americans don’t have $500 in savings. Next.
Venture firms? Perhaps — they tend to make the biggest macro bets. But most simply follow trends, and even the best firms have seven- to ten-year fund lifespans.
Entrepreneurs? The best of us, maybe. But most founders are simply looking to hit their milestones and raise an up round 12–18 months out.
By the time most of us slip the surly bonds of Earth, the following things are very possible, if not likely:
- Autonomous vehicles will be the norm, and car ownership will be a rarity.
- The planet will experience a three meter sea level rise, which puts at least three quarters of a million people in NYC alone underwater.
- Most citizens’ entire lives from birth will be catalogued through social media and other digital channels.
- In vivo gene editing, which combined with other biomedical advances could push our horizon well past the 2050–60 threshold.
The institutions that we rely upon do not have the planning horizon to tackle these challenges. Even worse, these institutions — politicians, Wall Street, the media — play off each other for short-term gains, scoring political and economic points from “quick wins” at the expense of the long game.
From what I’ve seen, the long view tends to come from two odd corners: insurance companies and family offices. They have some things in common — both have long-term incentives, and both have lots of smart people thinking about how the world will change.
Insurance companies would love to fully price climate change into coastal property insurance policies. Until recently, the government has prevented them from doing so, as fully pricing in the risk of flooding and superstorms would crush the coastal real estate market.
From my own experience, family offices bring the long view to investments. They are playing to grow and preserve multi-generational wealth, a perspective that aligns well with an entrepreneur’s desire to build lasting value over time. They have to play the long game.
But we can’t rely on family offices and insurance companies to save the world. We need to hold our institutions accountable to taking a long view, pushing themselves — and us — to see around the corner.
Thanks to Sam Lessin for inspiration on this one.
