In the best ordered plans there is some bad judgment. With most men this is increased by the prevalent under-esti mate of the future and by the ever pressing temptations of present desires as compared with the weakness of the appeal of the future. The steady pressure of these motives directs the larger part of the efforts and thought of men toward the pro viding of present goods, often leaving the future (ever becom ing the present) unprovided for. Accident, robbery, fire, storm, war, disease, death, countless mishaps, may bring upon any man, family, or community this maladjustment. Wher ever any particular kinds of goods become in this way un usually scarce, they rise in value compared with future goods of like kind and quantity. Time-preference appears, and itself in the uses made of all existing economic agents, both objective and human.
§ 7. Hastening the ripening process. A man or a family in an isolated economy would, when in urgent need, make efforts to convert future goods if possible into present goods. Sometimes this can not be done, e.g., the starving man in the forest can not hasten the ripening of wild fruits, and the des perate Richard III cries in vain, "My kingdom for a horse." But in many other cases there are ways of converting future into present goods, tho rarely without making some sacrifice for the conversion. (For if they were indeed available at once they would be present goods.)° Future goods of one quality may often be appropriated as present goods of a lower quality, e.g., the future ripe apple is a present green apple, the future matured wine is the present grape juice, the future seasoned lumber is present *Review ch. 10, sec. 4, on the use of indirect agents for hastening the uses of goods.
green lumber. In thousands of artificial ways in modern in dustry the time needed for acquiring the better physical qual ity and the higher value, is cut short. In times of siege and famine, goods may be changed entirely from their usual purr poses; trees are dug up that the roots may be eaten, and leather is chewed for food. Again, future goods may be has tened into becoming present goods of nearly the same quality by being put through technical processes, e.g., the lumber may be kiln-dried, the fruit may be forced in a hothouse ; but as in this process other agents must be used, the present goods and the future goods are somewhat different groups of things presented to choice. Again, to get more present goods the usual care of durable agents may be neglected and their future uses destroyed by taking more than the true present usufruct, as by using up a farm, or by driving a horse to death in go ing for a doctor, or by burning Indian corn or fruit trees for firewood.
In all these ways the adjustment of choice between present and future goods in the individual economy is constantly going on, reflecting a prevailing time-preference in some per son's mind. It will be noted that in every case this adjust ment, even when made quite outside of a market and without exchange with other persons, requires a sacrifice of something, either in quality or in quantity, either in valuable labor or in materials taken from other uses. This sacrifice bears some value-ratio, more or less clear, to the time-value of the present good.
§ 8. Postponing the use and the readiness for use. If on the other hand there is preference at any time for future goods over present goods of like kind and quantity, adjust ment is made as far as possible in the other direction.? If the person has but one unit (good or use) to dispose of, the use can be either now or later, but not both times. Shall the lunch one has in his basket be eaten now, or kept until noon? I Review ch. 10, sec. 3, on the relation of time to value, and sec. 5 on agencies for postponing the uses of goods.
Shall the rare flask of wine of romance be opened now, or kept for some future greater occasion? Often, however, the question presented is that of distributing a stock of like units, or of like uses, over two or more time-periods. In such a case as the bountiful crop, the surplus overflowing the usual de mands of the present is held for the future. The anticipated future desires factor as present desires (more or less weakened by time or perspective it may be). The claim a portion of the present stock, that portion which if at present would have a smaller value. Each unit of like ods, under the law of indifference, must have equal value at t e moment whether to b used at the pres ent the future (tho it have a higher value hen later used). Until his adjustment is corn lete, units are shifted from one time period o another, ac cording to the law of substitu ion. The pos sibility of using things later thus gives a valu ation to each unit of any present stock of goods higher than it would have if the goods were entirely perishable and usable only in the present. In Figure 31 if the present stock of meat is eight units, the value would sink to one, represented by the line AB. But if four of these units can be kept for the future, the present takes but four units, and the value will be three (line CD) for each unit, whether used in present or in future. Note that units five to eight may be worth more later when they are used, and probably enter into present choice at a discount from their future magnitude.