Wednesday, April 23, 2014

Desk Notes with no Reasonable Title Whatsoever

...but not for lack of trying. Nothing worked. Hence, some thoughts in this post are even more "work in progress" than usual, and I've got to clear a growing pile of notes somehow! First, equal time use for services production and consumption is not for everyone - nor need it be. Anyone who accesses the lifestyle they desire from present day consumption options, can (hopefully) maintain those systems in thriving economic centers. After all, these centers include the best part of today's capital, and the best part of employment which our institution defined capital makes possible.

Creation of coordinated time use marketplaces need not detract from "alpha" markets, which gain higher valuations (particularly in real estate) from globalization. In some respects, there is also capacity for integration between alpha and beta markets - especially over time. This would especially be true as beta markets learn to "grow" their potential for wealth creation. Plus alpha markets would not be where "all the fun is". After all, NIMBY anything likes to settle down with "farmer" characteristics, in spite of the movement of international monetary flows. Beta markets can represent hunter gatherer flexibility and instincts. That would provide more stability overall, than may appear at first glance.

And why not "settle down" if one's chosen field allows a way to do so? Upper middle incomes allow services access without need of conscious coordination, on one's part. Access to international monetary flows (where they exist) allows exclusive and complete focus, in terms of skills and knowledge use. Indeed, this is one of the more positive attributes of an earlier capitalism, which gradually sorted divisions of labor at all levels of society. For centuries, many individuals remained in work which did not consist of specific incomes or designated wages.

Thus, endogenous wage adjustment also meant it took a long time for services inflation to enter the picture. No one had to closely consider how monetary flows took place between production and services, until designated wages became a larger component of the entire mix of economic activity. In general, how much inflation actually occurred - for instance - before people moved to the cities to find the work which paid wages? According to Thomas Piketty, not very much.

So long as plenty of options existed in agriculture and then manufacturing, those who sought knowledge use and service related options instead, were practically guaranteed economic entry - on what has turned out to be twentieth century terms. But even though the "bloom is off the rose", the rosebush is still viable...right? For instance, consider that Thomas Piketty has a more positive take on capitalism, than Karl Marx. There's good reason: a limited equilibrium is still in effect, for knowledge workers in the present exclusive designation.

However, if Piketty imagines declining growth over time, chances are he does not envision more space for aspiring knowledge workers. Might some measure of guilt exist (re closed doors), behind new calls for greater income equality? Unfortunately, potential flows from existing wealth are not as automatic, as Piketty imagines in "Capital". Among other things, discussion of income inequality serves to circumvent public discussion from the greater loss which has occurred: dashed hopes of participation in the economy, on the knowledge based terms which the 20th century seemed to promise.

Those "once upon a time" flows which used to neatly designate labor, aren't reliable. What's more, this earlier equilibrium has been shifting since it reached its heights in the seventies. Only look at Piketty's graphs of national wealth and ponder...what the hell really took the place of agriculture?? Out here in the real world, some of the "working" capital which Piketty hopes is productively producing away, is instead gathering dust in storage units across the U.S. (now there's some valuable rent!) In some instances a bonfire might be more efficient...Meanwhile, valuable educational investments of recent decades remain cut off, with no marketplace to represent them. How can the rate of return on any capital remain significant, if the capital which matters most is not recognized and set free?

While more repetitious and exhausting forms of labor divisions have been replaced by technology, some of the more challenging and knowledge based forms of labor divisions remain. Even as they decline in quantity, the competition for what remains, has intensified. What might still be replaced by technology? So long as knowledge use depends on production remains of the day, possibly as much as 90 percent. Anyone who invested in their skills as though they represented real capital, is uneasy about these prospects.

With the "bad news" now out of the way, it's a good time to acknowledge that all of my suggestions are somewhat of a letdown, in any short term sense. Why? It would take a lot of time to get started, and learn to do things differently. Indeed, optimizing gains from time use coordination could take decades, in order to generate comparable wealth such as populations are used to. And in many respects, those newer forms of wealth would feel and look quite different. Even so, starting points (beta communities) would offer simple clarification as to growth and production potential.

Part of the good news, is the fact that time use coordination on equal terms would alleviate services related inflation. While much of this would affect local settings, lessening demand on primary areas would greatly assist their services systems. It also helps to remember that lower to middle income groups have little access to international monetary flows. That is a primary reason time coordination is needed, so that a different services equilibrium can be generated.  Measurements of productivity gains all around, would become easier to determine than they presently are. How so?

Equal time access would allow well defined knowledge and services tracking, in local aggregates. By pooling knowledge use in measurable ways at local levels, all services activity can be recorded as it progresses through time. That would allow each community to form ongoing records of the ways in which their services evolve, which would also create unique footprints for knowledge use and services in general. The fact that this occurs within aggregated sets of time options, illustrates the gains. Whereas institutional gains for knowledge use have an ebb and flow which is not as readily measurable as a whole - let alone accessible or cumulative over time.

Another positive aspect of this scenario, is that time use would once again become the central component for economic activity. In other words, knowledge based communities would become active illustrations of time centered economic activity, rather than finance centered. How so? Citizens would be able to make their time use primary, through inclusive and ongoing adaptability. For example, resource use would be secondary in the sense that when any resource creates negative supply shocks, time centered methods would seek resource use options which alleviate pressure on time use. Whereas finance and all of its best buddies, prefer to treat given resource settings as though handed down on a tablet from above.

For instance, versatile building components of all kinds would be associated with community goals of leaving time use as free as possible: in terms of unnecessary expense, maintenance and silly complexities. That means more time left for both leisure and desirable forms of work, which one could then choose over difficult maintenance or "dull work" which accomplishes little more than paying rent or mortgage. Or - let's use technology where it frees our time for the work that counts - at all levels of scale. I like to think of these kinds of life options as hunter gatherer ownership, where people elect to hunt and gather the "harvests" they collectively agree upon in small groups. Knowledge use especially needs the basic monetary anchor of time, in order to flourish.

Another aspect: equal time use in services would make it possible for a nominal monetary target to achieve full employment in multiple areas. That would put a stop to the gradually rising natural rate of unemployment. And when citizens share what was once government sponsored services work, governments don't have to worry so, about fiscal constraints and operating budgets. With a nominal level target for monetary policy, it would come down to higher income levels maintaining the asset inflation they can "live with", in the globalized environments of primary cities.

How to sum up this admittedly wishful thinking, in growth level terms? First, this new marketplace could become a substantial part of what was never "filled in", re the massive hole that was the Great Recession. What's more, adding in these missing hours represents a one time bump in growth, in terms of societal economic participation.

In other words that would be the point or plateau, from which a longer term growth level target could ultimately be determined. The degree to which different groups interact with resource use in innovative ways, would determine future growth patterns. When innovation is placed into groupings which maximize multiple resource use options, production and innovations can once again be dispersed through entire populations. That alone, would promote a higher growth trajectory than might otherwise be possible.

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