The “Social Rate of Discount” and the Political Economy of the Future in Postwar America

Recent debates about climate change policy have illuminated the quiet power of a largely obscure economic number: the discount rate used in government cost-benefit analyses. Plugged into a vast array of administrative calculations, the discount rate shapes how governments weigh present versus future across numerous domains. How did this number acquire so much power? This article reconstructs how the social rate of discount first emerged as an object of social-scientific and political concern in the 1960s U.S., propelled by debates about water infrastructure. That number surged into significance because it attracted the intellectual, ideological, and political interests of a disparate network of actors. This article examines four key nodes: the defense thinktank RAND, the Harvard Water Program, the Kennedy White House, and Senator William Proxmire. The social rate of discount offers a vivid case for investigating how “economic policy devices” (Hirschman and Berman 2014) take hold at specific political moments.