Review of What We Owe the Future
Author: William MacAskill
Publisher: Basic Books, 2022

Life is full of problems. Enough of them to occupy all our time. From a looming worldwide recession and the environment to raising families and world conflicts. We now have another obligation: to worry about future generations. Not the immediate future that affects our kids and grandkids, but the distant future, hundreds of thousands of years from now. 

That’s the message from What We Owe the Future by William MacAskill, a bright young ethics professor at Oxford University. Professor MacAskill has already earned considerable fame as a scholar; he’s also co-founder of the Centre for Effective Altruism and raised over $200 million for “effective” charities.^{1“Effective altruism (EA) is a philosophical and social movement that advocates ‘using evidence and reason to figure out how to benefit others as much as possible, and taking action on that basis’.” https://en.wikipedia.org/wiki/Effective_altruism} MacAskill makes a case for “longertermism,” a somewhat awkward word that stretches the meaning of the long-term out of all proportion. 

He believes that the future is hugely important not only because future people matter, but what we do today can have a profound effect on those yet to come. And because we can make their lives better, we must help “steer the future onto a better course.” If future generations don’t have a vote on what we do now, MacAskill argues we should at least give our far-off descendants more consideration and stop over-discounting the future. 

MacAskill asks us to consider how young our species is. Homo sapiens started 300,000 years ago. For every human alive today, ten have gone before. If humans should live to the average of typical mammalian species, 100 million years give or take, over the next 700,000, 80 trillion children are yet to be born. Wrap your head around that. We are the pioneers, the primitives at the very, very, very, very beginning of human history. 

What can we do to make that inconceivable future better, given all the unimaginable directions it could take? First, we must reduce the odds of destroying ourselves by nuclear annihilation, environmental disaster, or pandemics. Second, we can attempt to ensure that correct “values” are embedded in future generations. 

No one would disagree with the first point since it’s not a matter of protecting the future but a selfish desire to keep ourselves alive. The second is more interesting. MacAskill makes the interesting point that the values we’ve inherited and hold dear about individual rights, freedom of expression, and racial and gender equality aren’t necessarily guaranteed. He makes that case for what he calls “moments of plasticity.” These moments or occasions usually arise after times of social stress or wars where people come together to prevent past harmful behaviour. 

MacAskill gives an example of the U.S. Constitution. It was written in a mere four months, yet the Bill of Rights was amended eleven times in the first six years. This is the moment of plasticity when things could change and improve. Amendments slowed considerably after that, making change harder. The last change was 50 years ago with the 27th Amendment. MacAskill’s point is that laws and norms are easier to change in the early stages. Wait too long, and our laws and moral codes solidify like molten glass.  

Another case in point was slavery. Abolished more than 200 years ago, some argue slavery would have inevitably disappeared. Not so, according to MacAskill. Dominant wrong values often get “locked in,” persisting for long periods. The history of the twentieth century is a period where moral progress not only stopped but regressed, leading to Nazism and Stalinism, proving there’s nothing inevitable about moral progress. According to MacAskill, it’s vital that we “lock in” good moral values and pass them on before it’s too late. I assume he means encoding these values into law for later generations. 

But are these arguments persuasive? We worry about future problems that await our children, grandchildren, and perhaps great-grandchildren, but our bandwidth for compassion is limited to only a few generations before it dissipates completely. 

I admire MacAskill’s compassion for future generations, and he’s correct that we put too much emphasis on our immediate needs while undervaluing the needs of generations to follow. Small and good moral changes today could have profound benefits in the long term. But what does it mean for those living today to worry and sacrifice for homo sapiens hundreds, thousands, or millions of years in the future?

Philosopher Peter Singer has taught, and we’ve accepted, that saving a child on the other side of the world is just as valuable as saving a child in our own neighbourhood. That we understand. Aren’t we asking too much of our feeble goodwill to put the same value on lives still on the inconceivably distant horizon? And what makes us think our moral values are the ones future generations will want? Isn’t that imposing our form of “presentism” beyond our time? 

Imagine the incomprehensible turns and twists of fate that could and will one day distort our notion of morality beyond our recognition. Our values are not set in stone. The future truly is a strange country. 

Professor MacAskill ends with the cheery thought that if we get things right, our grandchildren’s grandchildren will thank us. If human nature is a guide—and most parents know this—the last thing we’ll get is gratitude. 

I’ll be the first person to tell you that housing prices in Canada are too high. It’s one of the biggest challenges facing the country. If we fail to meaningfully accelerate housing construction very soon, we risk having a generation permanently priced out of the housing market.

Recently released Census data showed that roommates are the fastest growing type of household in Canada. Get used to it. If you’re hoping that the Bank of Canada will crush housing prices, I urge you to reconsider. Because if housing prices fall too far and too fast, we might have bigger problems on our hands.

Before I go any further, I don’t actually think we’re heading for a major decrease in housing prices in Toronto or Vancouver. It’s certainly possible that suburban areas that benefited from the COVID-era land rush will experience some real pain. But even if we rolled back five years of price appreciation, Canadian housing will remain expensive. And that’s not even accounting for the fact that rising interest rates increase the cost of borrowing. So even if prices go down, mortgage payments (and rents) can still go up.

It’s hard to see how housing prices could fall durably in the GTA or Lower Mainland in the near term. They’re not building new land in Toronto and Vancouver, and there’s no reason to believe that demand to live in the two cities will decrease. We can certainly wrestle down prices over time by allowing more density. But that won’t happen overnight.

It’s true that there are other cities in Canada with much to offer.^{1However, if you want to live in Canada in a relatively big city without winter, Vancouver is your one option. If you want to live in a major global (anglophone) city, your option is Toronto. If you’re fluently bilingual, you may be able to find a comparable job in Montreal for less money (but lower housing prices). Ontario and Quebec account for more than half of the population of the country. There are only so many cities to choose from if you want to live an urban lifestyle (fewer still if you’re not bilingual).} I spent nearly a decade working on the Prairies, so I’ve seen this first hand. But unless major parts of the GTA economy relocate to Saskatoon or Calgary (or if fully remote work remains widespread), a lot of people are going to have no choice but to live in the GTA.^{2Then there’s the small matter of family. Not everyone is willing to relocate to the other side of the continent. Calgary might only be a three-hour-and-forty-five-minute flight away from Toronto, but that’s a hard weekend trip. Especially if you’re visiting family who doesn’t happen to live right in Mississauga or along the Union Pearson Express route. Trust me, it’s hard.} 

Of course, it’s conceivable that we could see a big decline in housing prices while affordability worsens. I don’t think this scenario is likely. But I also think it’s the single most likely scenario involving a large, sudden decline in housing prices. It sounds counterintuitive until you think about the role that housing plays in the economy.

Most people own homes, and it is the biggest asset most people own—by far. In a country with expensive housing, even more so. How much money people have access to and are willing to spend is related to the value of their homes. When prices are going up, people feel better about taking a vacation or going out for dinner. The house is building your retirement wealth. No reason not to have that steak or fly to Hawaii. Until, of course, your home all of a sudden becomes a drag on your household wealth. And worse, in the short term, it gets harder to tap into your home equity. Then maybe you skip the steak and drive to your parents’ place for the weekend. That’s just prudent, after all. 

Here’s the problem. If enough people decide all at once that it’s time to hunker down and save money, a lot of businesses will suffer. That’s not necessarily a big problem. Economic fluctuations happen, and we adapt. Where it becomes a problem is when you’ve got a highly indebted country. If business closures and layoffs mean more people start to miss mortgage payments, you’ve got a slightly bigger problem. Now layer on higher interest rates, and you can see how this might escalate.

If all this sounds familiar, it should. The United States experienced a similar (but far more complex) issue in 2008. While the causes of the Global Financial Crisis were complex, economists Atif Mian and Amir Sufi in their book House of Debt laid out a useful framework for how falling home prices combined with high levels of personal debt can spill over into the broader economy. They describe their “levered losses framework” as follows.

1. The economy consists of borrowers and savers. In the context of housing markets, mortgage holders are the borrowers. Since lenders (banks) have a senior claim on the debt, they can foreclose if borrowers cannot pay. 
2. A shock to the economy can cause highly indebted borrowers to stop spending and increase savings. Since spending by borrowers is more sensitive to housing wealth than savers, the concentration of losses among borrowers can magnify the decline in economic activity.  

This sounds very simple, but it has profound implications. Borrowers, who tend to have lower net worth than savers, are more impacted by home price decreases (particularly since savers can foreclose, recuperating assets). High levels of debt combined with a sharp reduction in a household’s assets mean they will spend less money on goods and services as they attempt to build up savings or at the very least keep paying the mortgage.

This isn’t a problem if we’re talking about a single household. But when multiplied across the economy, it can lead to a decrease in aggregate economic activity (e.g. a recession). In the case of a sharp decrease in housing prices in a country that has high levels of personal debt, it can be much worse than a garden variety recession. 

It’s easy for people locked out of the housing market to look at homeowners who have seen the value of their homes double or triple and think maybe it wouldn’t be so bad if they took a haircut. Or maybe something more than a haircut. It’s not their fault that housing prices have gone up, but the schadenfreude would be understandable. But it would likely be fleeting since many of the people currently locked out of the housing market would themselves get wiped out by a deep recession. If housing prices get cut in half but you don’t have a paycheque anymore, it’s hard to say that housing is affordable.

Fortunately, this seems like an unlikely scenario. The GTA and Lower Mainland aren’t the U.S. Sunbelt, not to mention the fact that our financial institutions could likely withstand a deep recession, preventing a financial crisis that would compound the downturn. There’s no excess of speculative housing developments and no obvious risks to our financial system. So housing prices probably aren’t going to plummet any time soon.

In fact, at this rate we’d need to double housing construction to keep housing prices from rising further. It seems likely that some of the excesses of the COVID-era will get flushed out (few people are rushing to move out of the cities anymore), but it’s more likely that transactions will decrease as sellers decide to wait out temporary weakness rather than that housing prices will collapse.^{3What makes Canada’s housing challenges even stickier is that short-term price declines could help fuel higher prices in the future. There’s an old saying: the cure for high prices is high prices. High home prices make building homes more attractive to developers. If prices fall too far too fast, some projects will get shelved. This is already a concern in the GTA. Perversely, it’s possible that even a mild short-term pullback in housing prices could add to our housing supply deficiency. Yet another reason not to cheer for a crash.}

None of this is to say that we shouldn’t want housing prices to go down. We need to re-balance housing markets, not crush them. A sharp downturn in prices would just compound problems by leading developers to cancel projects, preventing pent-up supply from meeting demand. But we need to be careful what we wish for. A deep recession isn’t going to fix our problems.