Some economists speak of time preference as a measure of how much we prefer gratification today instead of gratification tomorrow. In the ordinary world, people learn that delayed gratification can be a good thing. But we all seem guilty, to some degree or other, of short term thinking. It’s the result of cognitive bias.
I believe that what is true for individuals is often true of institutions. And I’m quite certain that most institutions are afflicted with a short term bias. This includes businesses, charities, political parties, unions, and governmental bodies. When you look at a mess such as we’re having the Gulf, it’s easy to speculate about a host of short term biases lining up to create a horrible black (oil-coated) swan. It’s amazing that this kind of thing doesn’t happen more often.