Thursday, November 27, 2014

Tax Capital? no. Restore Human Capital? YES

In a recent Project Syndicate article, "Education in the Second Machine Age", Dalia Marin wrote:
Until the 1980s, about 70% of income went to labor income and 30% to capital income. But, since then, the share of income going to labor has declined in all rich countries. It is now at about 58% of GDP. According to research by the economists Loukas Karabarbounis and Brent Neiman, half of this decline is the result of cheaper information technology... 
The implications are serious...It is possible we have been fighting the wrong war. As the scarcity of human capital declines in importance, the rapid expansion of education may not be the answer to the challenges of globalization that we hoped it would be.
And yet, capital as a whole is not as dynamic or substantial as it may appear. Even though human capital can be restored as the missing wealth dynamic, no one should mistake the process of getting there to be "more of the same", i.e. skim the best and disregard the rest.

Human capital formation need not be considered a scarce quantity, in spite of what present day credentialing might appear to insist. Plus, human capital could still provide the best means to a greater end, just as formal education was once able to promise. However, the development of human capital potential needs to be approached more directly - particularly as population growth is moving into a global slowdown phase which could otherwise stall innovation and investment. As Karl Smith notes:
Lower population growth rates have the potential to undermine the virtuous cycle of risk taking and innovation. Without policy changes, economies will find themselves trapped in rapid boom and bust cycles that net out to pathetically slow growth rates even in per capita terms.
Fortunately, tapping into the potential of time use aggregates would provide many of the same benefits in terms of investment and opportunity, as a growing population. What governments can't afford to do in today's mature marketplace, is to continue parking time use value in housing formations, just to make up for time aggregates which are supposedly not "needed".

While the "housing as primary wealth" strategy worked temporarily, it should not have been expected to provide a permanent wealth solution for the future. Housing is only a passive investment which is an end result of dynamic activity, not the beginning of a wealth creation process. The private property which was once such a driver of progress, has declined in practical (usable) terms as compared to knowledge use property.

Just the same, individuals do not own knowledge use rights in the same way they are allowed to own other forms of property. Investment for knowledge acquisition mostly "pays" to the extent it can be tapped in the event someone is hired in the marketplace. Except now, possibilities for hiring often do not exist among individuals wherever they reside, but by public and private interests which are but a fraction of the population. This is why it has not been possible to treat human capital - thus far - as real wealth. However, the process of creating better pathways for knowledge use has not even begun.

Instead of needed services production reform, governments continue to reach for more taxation to pay for services. What's more, would be consumers receive much of the societal blame, if they can't pay for housing definitions they never even asked for. Governments can no longer expect the most "qualified" citizens to carry the burden of societal responsibility of services for the rest, through housing formation monetary flows. And yet, this is what happens, when the "rest" do not have adequate economic access to participate either in services production or investment opportunity.

Those who cannot readily contribute to the prevailing equilibrium, need a chance to define services and production through more locally driven means. Not only would this allow lower income levels to help themselves, it would allow the primary equilibrium to regain balance in production and services formation. What's more, this could gradually restore the earlier portion of income going to labor, and the apparent discrepancy of additional capital (as parked in housing) would return to more normal levels.

Regular readers are familiar with my insistence on restoring human capital to the marketplace. That's the main reason why I was dismayed with Thomas Piketty's arguments, even before completing his recent book. Why did he dismiss human capital as directly important for wealth creation? Possibly - just possibly - because that makes it all the easier, to insist on further taxing the capital monster under the bed which isn't really there. Even the attempt to do so, simply glosses over the fact that capital needs to be more closely associated with human potential, instead of dismissed out of hand as unimportant.

Wealth as human energy in motion, was reflected in the creation and definition of GDP in the 20th century. There are a number of reasons why housing began to supplant human activity as wealth. One of them, is that no one saw fit to make certain human activity remained at the center of the wealth equation, as automation gradually supplanted the need for production to subsidize labor.

Did anyone think that production residuals or government redistribution were the only ways knowledge use could be tapped? Apparently so. Indeed, Piketty scarcely worried about the role of human capital as wealth, for his primary concern was with the way that corporations appeared to be getting the "best" of governments. Given the degree of wealth that already exists in Washington compared to the rest of the U.S., how is such an argument even possible?

Missing in these arguments is the fact that governments are negligent in creating the marketplace people need for services formation. There is little about the further taxation of capital, that would improve this situation. The more governments became dependent on traditional manufacture for services and knowledge use, the more production became necessary to fulfill those services needs. And yet - how is this even possible - the more the political left complained about "excess" production. Argh.

Now that traditional production has slowed somewhat in the developed world, it is sorely missed as knowledge use remains caught in the grip of special interests of both political parties in the U.S. If only the gains of innovation and traditional production had been recognized for the freedom they have offered for so long. Imagine the direct knowledge use formation which could have taken place, already.

Still, the potential time freedom from an automated workplace, would have meant challenging the knowledge use guilds, which also require heavy resource use to maintain the way their institutions are presently structured. Unfortunately, the "easy way out" of refusing good deflation in building construction to generate wealth, has met its limits. As less labor was needed in the marketplace, fewer consumers were available to purchase either low innovation housing or services.

The decline of labor income from 70 percent to 58 percent of GDP wasn't "inevitable", nor does it have to be, now. But the desire to keep knowledge use under wraps, has also meant a slow decline for knowledge use work since the start of the 21st century. 58% is not a number which is the result of corporations sitting on holdings and the luck of the one percent. It is a result of the guild formations which came to define knowledge use services.

That missing 12 percent is simply the portion of knowledge use which has been held back thus far. It is also the missing marketplace which became apparent in the output gap in the Great Recession. And without production reform for services and knowledge use, gaps in knowledge use and GDP potential will only grow wider. Human capital is the crop that all who can, invest for and hope to harvest. This crop also relies on the right of each of us to use the time we actually have on any given day. Skimming the best, while throwing out the rest is sheer folly.

For Thanksgiving, I want to thank my readers for having the patience to put up with my ongoing rants. I would also like to give thanks for the potential of the human mind, and I continue to pray for the aspirations so many hearts hold, just to belong to the world in their midst.

Wednesday, November 26, 2014

Midweek Market Monetarist Links and Summaries - 11/26/14

"The real problem with the sales tax increase is that the money is being used to finance additional government spending." (Scott Sumner) Were market monetarists wrong about Japan?
When the natural rate of unemployment is close at hand, things get more complicated. Scott addresses concerns which have come up recently in comments: A time for nuance
Overreach on Obama's part? Sure. But like Scott I noted the utilitarian aspect of more individuals willing to toe the line: That's outrageous!
Neo-Fisherism has Keynesian assumptions: Neo-Fisherism in a world of multiple policy tools

Some posts from Econlog (Scott Sumner)
These wars don't have common themes: The smart against the dumb: The new Cold War
The Democrats aren't the only ones with expensive programs: Why America can't have small government (and China can)
Needed: a monetary regime completely divorced from the banking sector. Still, Izabella Kaminska made some completely off base comments about free banking: A few thoughts on free banking
Here's George Selgin's response to Kaminska

Pathetic! (Marcus Nunes)
(Bonnie Carr responds here)
Is labor market slack low...or high?
They've got it where they want it:
At "low" pressure...
Not quite ready for policy normalization:

David Glasner argues for the U.S. Treasury over gold:
A response from Bill Woolsey: Reserve Currency Status

However, quantitative easing is only a temporary "fix" (Bill Woolsey): Hummel on Quantitative Easing

Is the Fed committed to a 4% level NGDP target? (Lars Christensen)

Ravi Varghese considers the role of the ECB in the recent Irish crisis:

Inflation is dead (Benjamin Cole)

An interesting post from Lorenzo:

Police should not plunder the weak and the powerless (James Caton)

Monday, November 24, 2014

Inflation and the Endogenous Factor

What monetary factors lie within a nation's ability to control? Actually, "control" is too strong of a word. Still, reasoned management is important, in terms of gauging the money populations need in order to maintain economic stability. For instance, nominal targeting on the part of the Fed would not be "planning" in the normal sense of the word. Instead, a nominal level target would simply be a commitment to stabilize ongoing contractual expectations, to the best degree possible.

One reason the Fed remains "off course" with inflation targeting, is the fact it went along with numerous top down proposals for wealth generation in recent decades. Some of the financial structures in this regard also served as efforts to maintain a centralized economy. The Fed's unfortunate desire to steer the economy on financial (instead of monetary) terms, has led to more wealth capture than might otherwise have materialized. Inflation or deflation in these circumstance, mostly exists insofar as economic access is not adequately considered.

As a result, there is too much emphasis on prices and asset values, instead of overall monetary representation. Only consider the recent Billion Prices Project, which tells some misleading "inflation" stories. This project data can be easy for gold bugs to cherry pick, as JP Koning emphasized. And just as many remain overly concerned with inflation, others grapple with the vagaries of finance - instead of the circumstance which gave finance the power it still holds.

Is there a way to move the emphasis away from prices and financial constructs? What matters most beyond monetary factors, are the ways in which individuals, groups and other concerns organize the tasks of production and services formation. The ways these organizational factors interact and overlap, are among the most important measurement indicators which take place within a nation's borders.

Often, what appears as though inflation or disinflation, has more to do with how local structures for production and services are generated and maintained. Whereas the small community relies on limited taxation capacity, prosperous areas often augment services formation well beyond expected base structures. Still, in both settings, non tradable goods tend to be chosen for the consumer on their "behalf" as part of a non negotiable package. Presently, too many pricing structures remain hidden, which presents unnecessary economic instability down the line for individuals and communities alike.

Thus far, prices for non tradable goods have not been as easy to standardize, as goods traded across borders. Just the same, the standardized pricing of tradable goods does not accurately reflect the primary spending patterns of local economies in many instances. Even "local" or national manufactured goods may only have production in a number of regions, and yet experience sales around the world. Production of tradable goods - which seems easier to quantify than non tradable goods - isn't quite the helpful endogenous measure of GDP that it appears to be.

Presently, the Fed often fights the wrong battles, by looking for economic signals in too many of the wrong places. As a result, they miss the structural problems which still stand in the way of maintaining a smooth growth trajectory. Even though structural issues are not the Fed's responsibility, those concerns cannot simply be left untended - particularly while the Fed also shoulders the blame for what lies outside its realm.

Special interests tend to look the other way from the imbalances they generate, and the result is undue pressure on other parts of the economy. This is why it is helpful, for citizens to gain some understanding regarding structural factors which can negatively affect economic stability. In particular, some entrenched interests likely suspect the pressures they generate... hence are glad for everyone to be obsessing over a billion prices, instead!

How can further clarification be brought into local services structures, for the measurement of GDP? Even though inflation in these areas is problematic, (and it certainly shows up in the figures) it helps to ask: in relation to what, exactly? Does the use of one's time count as viable product...or not? How society ultimately answers these questions really matters. In any complex economy, services and the asset formations which exist alongside them, are central to economic activity.

When civilizations break down, a lack of understanding regarding knowledge use roles can cause skills networking complexities to disappear for centuries at a time. Of course, that's a long term consideration. As to immediate concerns: when services and knowledge use roles are not well defined, any production norm which might otherwise apply in traditional manufacturing terms, only results in arbitrary caps for economic access and continued progress.

A number of issues need to be considered in this regard. For one, a point of production reference becomes possible, when skills arbitrage allows the measure of time aggregates for services formation. Not only does this provide means by which to gauge knowledge and skills capacity, it allows time use - hence individual capacity - to be considered as product in its own right.

Services inflation is mostly problematic when it is approached through indirect means, which generate hidden and overlapping cost structures. In recent centuries, many forms of knowledge use were subjected to the indirect compensation of redistribution and production processes because this was the only approach institutions could reasonably take to generate further economic complexity. Fortunately, knowledge now has the capacity to be dispersed through digital means, which could make direct services formations possible. Not only would this be beneficial for the measurement of GDP, it would also bring the endogenous factors of local economies into better balance with tradable goods and international monetary flows.

Sunday, November 23, 2014

Time as a Standard of Value

Recently, the return of a Keynesian outlook seems particularly pronounced. Several weeks ago, Bloomberg Businessweek even ran an article which included a crowd "tossing" Keynes into the air. Granted, all remains well on Wall Street. Many are relieved that the Fed kept the "Great" out of depression this time, by maintaining (relatively speaking) asset values. Just the same: in some respects, Main Street remains as though a shadow of its former self. Is Washington "capable" of bringing the light of day to the darker corners of Main Street? How does one attribute what in reality is a lackluster the ideas of Keynes?

Perhaps some of the "Keynes as savior" notion, has to do with a top down, hence internationally focused approach. Even when nations attempt to (monetarily) assist their own citizens, they end up being accused of "starting" currency wars with other nations. Among other problems, this misguided premise does not recognize a quantity theory of money as holding an active role for monetary policy.

To be sure, the exogenous nature of international monetary flows has some bearing on top down dictates. These flows are still being confused with internal mechanisms, which are more important drivers of economic activity close to home. Indeed, endogenous factors of economic organization are where the quantity theory of money has real application.

Nations spend too much time worrying about things they cannot help (both politically and monetarily) and not enough time on economic matters where they can do some good. For instance, instead of obstructing the flow of tradable goods, nations would do their citizens right by seeking to maximize benefits of imports for the good they can provide in local settings.

Even though the wealth (and organization) of tradable good structures exists somewhat independently of nations, each nation holds the more important wealth creation potential of its own citizens. What's more, much local wealth value completely resides in the economic relationships that are possible, rather than any specific product or wealth capture. To this end, time use in relation to resource use, needs to return to center stage.

Governments cannot expect to utilize wealth through top down methods. However, they do have the capacity to recognize and reimburse local economies for maximizing time use capacity through bottom up efforts. The more that any nation is willing to back local efforts to generate full economic access, the less problematic their debt structures are likely to remain, over time.

The primary resource of any nation is its people, yet the real wealth potential of time use aggregates is scarcely tapped. Instead, aggregate time values remain woefully neglected - to such a degree that individual efforts for success too often fail. For nations to remain in economic balance, external resource and monetary flows need to be reconciled with the use of time as a standard of value. As long as time value does not sufficiently count, too many policy makers will discount the stimulative qualities which money continues to hold in the present.

There's an interesting way to express what happens when money is printed without context to time as an anchor. Recently I cut back on my three cups of coffee a day habit, which - as a stimulant - had begun to serve too many means and ends, shall we say. I was ignoring my time factor (what my metabolism could tolerate) and hoping the stimulant could still work. Unfortunately for the most part, it wasn't working any more.

Call it the quantity theory of coffee! Immediately, the positive effects of caffeine were restored, once I limited myself to the morning cup. Even the caffeine from my occasional "jolt" of OTC headache "management", began to provide a "second wind" when it coincided with my work schedule. Too much coffee had meant a loss of the stimulant effect. Even though I still miss the two extra cups, it's good to have a metabolism in better balance. The effort of following the "quantity theory of coffee" - thus far - is paying off.

Think about what happened with interest on reserves, once the Fed sought to stabilize financial commitments which took place prior to 2008. The neutering effect of interest on reserves was basically like decaffeinated coffee (i.e. worthless). Some central bankers no longer wanted the "stimulant" any more, but unfortunately decided to go "cold turkey" (i.e. permanent drop in potential output) instead of seeking to maintain a pattern (NGDP level target) which would eventually allow normal stimulus to return. Hence stimulus effects are now partially lost, in an economic "metabolism" which remains out of balance.

Why did this happen? For one thing, too many people have lost faith in economic time use as a standard of value. Prior to 2008, the time anchor was still partially represented through holdings in housing wealth. The monetary system prior to 2008 also still "worked" like caffeinated coffee as an economic stimulant, and the quantity theory of money was not questioned to the degree it is, now. It doesn't help that the quantity theory of money is partially challenged because of the exogenous nature of international monetary flows. Whereas important aspects of the quantity theory of money rely on endogenous and localized factors - a subject to be further explored in the next post.

Without time value as reliable representation, wealth appears as though infinite random variables. That opens monetary policy to unnecessary confusion, because time use tends to be more constant and reliable than other resource factors. Rather than being led astray by fiscal and financial concerns, the role of central bankers could best be served by making certain time use remains central to economic activity. Government can do lots of things Keynesian style, but they cannot run economies on behalf of the individuals who are part and parcel of economic life. The interests of everyone are served best, when the time of all concerned becomes a primary standard of value.

Saturday, November 22, 2014

No "Maker" or "Taker" Designations Necessary

...After all, communities which internalize time use aggregates for local production and services, would be able to ensure that citizens become one and the same. In my last post, I posed a question: Why are citizens and policy makers inclined to apply "maker" versus "taker" identities in struggles over government benefits, instead of providing more accessible means for economic prosperity?

Even though some Republicans are quick to point to the "takers" of society, the fact remains that plenty of "makers" have been able to strengthen their hand for a long time, with government's help. Some markets become quite lucrative when limits to entry are imposed. But eventually, it's a process which eventually begins to exclude further economic formation. Hence knowledge use limits have plenty of bearing, as to why some takers players are in a bind with scarcely any cards left in the game of life.

Granted, many prosperous areas in the U.S. do not have enough room to bring in new citizens and productive endeavor. In some instances, local citizens should not be expected to greatly increase population density, given previous commitments for the environmental definition they already have. This is particularly true, where unique geographic formation has lead to higher and more complex services valuations. But many open spaces exist in the U.S., where new starts or "games" would be possible. Primary knowledge use need not be limited, to the main economic regions of the present.

By "growing" the pie - i.e. knowledge use marketplace along new margins - citizens need not be threatened by anyone - including immigrants - who still seek economic entry. Exit and voice can be generated in new settings which do not directly compete with the old. This could broaden the horizons and wealth potential of anyone who lacks ability to gain entry, elsewhere.

In these new settings, monetary compensation for services coordination, would serve multiple purposes. How so? Those who gain a place to start anew, have a chance to escape other less positive identities which often impose burdens on government budgets.

Consider the services approach for municipalities in the present. Economic complexity in this regard is often lacking, with the exception of primary economic regions and cities. Otherwise, local economies face a series of constraints which limit them to the most basic services levels. (High skills use thus far is mostly possible in areas with international monetary flows.) This has left most local economies dependent on adjacent regions, for both services access and wealth holdings (especially housing) that result from earlier income. With coordinated time use aggregates, a considerable amount of dependence could eventually be relieved.

What are the primary existing service obligations in any community? In the U.S. the first is most often public schooling. After that comes public safety (police, fire, emergency medical), then roads, sewer and water. By far, the biggest expense for these is operating and maintenance budget in the form of salaries. Whereas capital (what one thinks of as infrastructure) is in single digits. Much infrastructure expense in capital terms occurs very seldom, and has little assistance from state or federal levels.

How to think about monetary flows, in terms of what needs regular attention? Thus far in the U.S. public schooling has especially relied on property taxation, while other services (most often) utilize sales taxes. The good news in this regard? These ongoing expenses are salary related, and internalized compensation for local services generation would make much of the taxation to services transfer unnecessary - particularly for property taxation. Directly matched time as new wealth creation, makes a more complete services agenda possible. In other words, by turning time arbitrage into a starting point, a whole range of services formation becomes possible which otherwise could not be sustained in small communities.

What's more, the services-as-wealth process leaves resource windfalls available, for the materials most needed for infrastructure building and maintenance. That means windfalls become recognizable as the random benefit they actually are. Why is this important? Windfalls would not be grabbed for the constant needs of time use, nor would locals be regularly taxed for monetary flows they simply may not have in the present. Like so many other things in life, optimal income gains will remain random in nature, even when societies organize to make certain their members are economically included.

Resource windfalls - if truly appreciated - have the potential to create and maintain the economic paths best suited for those bearing responsibility for community.  Infrastructure options exists along a wide spectrum of possibility. That also translates into multiple density and work/living options. Some would require more investment than others and - as a result - represent more commitment and fixed resource use. It is probably a good idea to "sample" some areas with portable infrastructure and flexible time use commitments, to see if the proposed working and living environments prove viable.

Every community needs to generate ongoing monetary flows on the part of all its citizens. However, the present task is to find more efficient and considered ways of doing so. Too much emphasis has been placed on schooling for instance, with too little societal reward - or follow up plans - for the effort. Internal time use coordination among locals means not every home needs to be a resource intensive structure. Since fewer taxes would be necessary to generate needed infrastructure maintenance, considerable flexibility would be possible for work/life options.

Voting mechanisms for local citizens would take place in stages. Initial votes for new community would take place in a series of domestic summits, in order to match like minded individuals (and families) for common preferences in terms of infrastructure and desired community amenities. At the same time, a broad framework would be sketched out for initial commitments for services and production formation. After communities are formed, ongoing voting processes during the course of the year would calendar time use proposals for both services and production projects.

One goal would be to make certain that no individual becomes pigeonholed into certain activity sets just because of competitive advantage, or a perceived lack of skills elsewhere. Everyone lives a healthier life - whether relatively high or low skilled - when not required to perform a given task beyond a certain point of natural tolerance. So long as anyone seeks new work challenges, coordinated time use makes those challenges possible. The only reason society ended up with makers and takers is because of a lack of imagination. Fortunately, this arbitrary designation can be overcome.

Friday, November 21, 2014

The Vote, Reconsidered

The vote: It's a way for citizens to be included, which developed nations understandably promote beyond their own borders. A way to make one's voice heard and one's opinion count...or is it? Today, voting feels more like an egregious form of punishment or wishful thinking, than a tool for constructive action. One takes what they can get, I suppose. Still, one often hears, if you didn't vote, you don't have a right to complain. I've been to the voting booth enough times over the years to question that assertion.

Do voting processes need an overhaul? How to think about their present lack of effectiveness? There's confusion as to what one can vote for and reasonably expect in return, other than more laws which further detail what cannot be expected. Voting would be particularly useful, if - as a tool - it were utilized to increase odds of success in an aggregate sense. Instead, limits for resource potential are often imposed on entire aggregates, by the overly simplistic dictates of majority rule.

If the chances of direct democracy seem as though slipping away, the imprecise nature of voting has contributed to their decline. There are important aspects of time use and resource use which need to be managed - and voted for - at local levels. That's not to say that states would automatically do a better job in this regard. In the U.S., states are often inclined to follow the lead of national government regarding knowledge use limits, because special interests also provide monetary backing at state and local levels. As a result, too many decades of policy makers have backed special interests in their efforts to limit economic access. The fact they have been able to do so, makes many question the basic functions of representative democracy.

What's more, office holders have become dependent on the monies from factions which limit economic access, to fend off political opponents. For the most part, political representatives are cultural stand ins for the way citizens feel about the services provisions which remain. In other words it's just a fight over a now smaller pie of resource use options.

Special interests have always had the first hearing in Washington, it seems. But there was a time when the gains they brought to the table increased the welfare of the many, not the few. Often, earlier special interests brought technological gains to the table which benefited populations as a whole. The relationships these groups held with government was often the "least bad" circumstance by which to lay economic paths and frameworks for the whole. But the special interests of today, no longer provide a useful function in this regard. Their relationships with government are more likely to come at the expense of citizens, instead of to their benefit.

This is why so many citizens have real issues with government in the present. Governments provide a valuable role when they concentrate on improving societal means, instead of favoring societal ends. Unfortunately the ends have become far too lucrative, as office holders take their personal cuts in countless different ways. When governments say no further growth is possible, it is because they have lost interest in the continuation of means by which to move society forward. A primary example of this process is the infinite variety of tax shifting, which focuses on the ends of wealth rather than enabling means to create further wealth.

A recent Marginal Revolution post from Tyler Cowen about the middle class and infrastructure development, made me start thinking about the voting process. How was it that voting primarily became associated with public provisions, instead of the formation and maintenance of viable networks to keep economic pathways open? Indeed, the fact that voting became associated primarily with the former, seems to be responsible for the arbitrary divisions of "makers and takers" which exist today.

At any rate, much of the cultural "baggage" that gets thrown into the voting mix, revolves around public provisions as well. Perhaps if the public were more directly involved with means to maintain a free marketplace instead of clamoring for ends, much of that baggage could be left behind.

These are important considerations, before any serious discussion about infrastructure and structural change can even take place. What's more, some of the comments in the above linked Marginal Revolution post pointed to some basic elements about local economies which are often overlooked. In my next post I'll take a closer look at existing and potential infrastructure options.

Thursday, November 20, 2014

No More Innovation Or Growth Necessary...Seriously??

There are good reasons, why more people these days feel as though the odds are stacked against them. What's more, governments scarcely seem worth the tax dollars required for their upkeep, when they tell citizens it's time to give up on continued growth. Amazingly, this odd tactic has not been questioned to the degree one would expect. Perhaps some take comfort in "who needs growth, it's time to get back to a simpler life". Hmm...except what's "left" isn't exactly simple or reassuring. Meanwhile, others have a different story: "Innovation "isn't what it used to be. All the big, important stuff is already done."

How would anyone really know? I'm more inclined to think "innovation for me but not for thee". Did everyone wake up one morning and just decide: hey, this is as good a stopping place as any, for further progress? The person who is ready to kick back and put their feet up, is not the same person who is still hoping for a meaningful career - or life for that matter.

If no more innovation is "necessary" (except perhaps that latest chronic illness treatment or tech gizmo), how is present day production supposed to maintain the circumstance and populations of the present? Who would still commit to further education, if the job market does not improve? Is anyone really comfortable with the thought that humanity could easily "make do" without the use of three quarters of its mental capacity? I don't think so. Just the same, modern day versions of guilds control much of the ideas, research, new production definitions and process methods which are allowed to see the light of day.

Excessive regulations are cited as problematic. But how to dig through the quagmire, to determine where the worst problems exist? Structural circumstance needed to be faced squarely, before they get any more out of control than they already are. Sure, some money will continue to be spent on innovation if nothing gets changed: the kinds of innovation one hears about on the evening news. But much of what is heard in this regard, has little chance to benefit populations as a whole.

What about the innovation funded by governments? Many nations seem to be growing more reactive and defensive by the day, making it more likely that U.S. dollars for innovation will ultimately end up in defense related areas. Given the costs of research and development, private interests mostly want "sure thing" innovations. For pharmaceuticals, that means resources are geared primarily for ongoing needs of chronic illness, rather than acute illness and its related conditions. When research for medical needs was more broadly shared and dispersed, the latter was also well represented, particularly in alternative care.

Hence, if innovation for broad based societal gain remains likely in the near future, the possibility of making it happen rests with individuals, instead of present day public or private interests. Populations as a whole, need to restructure so that a wider and stronger net can be cast to capture innovation potential. Knowledge use systems are needed, which can be internally coordinated to support citizens in mutual time use pursuits. With ongoing calendaring for production and services proposals, costs for new forms of research and development could be internalized and greatly reduced.

Innovation networks are still strong, but much too thin and with too few connecting points, to really capture human potential. One could say that while the "long tail" applies online, it has few local economic equivalents thus far, in knowledge use terms. Unique services and production structures are mostly concentrated in cities, but this need not be the case. There is a world of knowledge and information which is just waiting to have relevance in local endeavor, and the digital realm needs to be put into motion so that populations can once again regain confidence for the future.