Time Use Arbitrage: Luxury, Subsistence...or Something Else?

Increasingly, people question the value of personal time use which involves the formation of product. Often, the marketplace is capable of delivering product on more practical terms. When this is the case, time use for production may appear as though a luxury good. That is, one could logically "choose" to use time in this manner as an experiential consumption good, when personal time use has already been "freed" in other respects. Otherwise, doing so may not appear logical.

Of course, the opposite side of this coin also needs to be taken into account. Where one has little economic access, personal production (either for knowledge use or separate product) - which does not match up with the time of others - may start to appear as though subsistence for one's survival. While the change in definition may be subtle, generally a "subsistence good" aspect of time use gains less respect. Digital product can be difficult to substitute for some educational options, because it is not always possible to know the difference.

Recently, Art Carden and other commenters at Econlog discussed the merits of using one's time in cooking, for instance. But on a more serious note, farming as an occupation - hence investment of one's time - has been questioned for decades. Larger business entities which are government backed and depend upon scale for what profits they can generate, dominate the marketplace. While other aspects of agricultural product may seem dubious given government subsidies, economies of scale make sense. What would the marketplace in food look like, if government did not tamper with it? We just don't know. As  Dietz Vollrath indicated in his post title, "Farming doesn't pay...for a reason."

A present danger is that the work of the mind - hence its potential role in services growth - is not always seen as a practical or even particularly important good. Many institutions back "no growth" experts in this regard by replicating limited knowledge sets, instead of seeking more. Often, life circumstances dictate that more "practical" (hard or low skill) work makes more "sense", for both individual and collective survival.

However I do not believe this reasoning is valid, because knowledge use and innovation are the forms of wealth which are capable of generating new growth and greater productivity. Any time that we utilize only previously generated knowledge - instead of current knowledge potential aggregates - asset formations are forced to represent the limitations society imposes on growth. Hence, the main argument for time (use) arbitrage as a basic good, is really about what it would be capable of capturing, which present day institutions often miss. Diane Coyle recently said of Dierdre McCloskey:

Her argument is that it isn't the accumulation of capital but rather innovation that is the engine of wealth, collective and individual. 

Innovation needs knowledge use. But without the societal support of knowledge use at local levels, the only innovation potential which is available, is between firms. Even within firm environments, innovation at grassroots levels may not materialize - let alone the firms which buy innovative product, primarily to suppress it. In much of the current realm of knowledge use, no one even has to buy innovative thought in order to suppress it. Often, useful ideas are either abandoned, ignored or else watered down, if a broad consensus does not materialize to support them.

While no one can expect today's institutions to support knowledge use potential in aggregate settings, local communities can do so - and become empowered in the process. What is the difference in this regard? Knowledge use is part of the bottom line for local productivity gains. Because a complex economy is now possible to coordinate in local community settings, productivity can be captured and layered (i.e. multiple time use gains at once) at all levels.

In summary: So long as an individual holds a job, many things in the marketplace are more reasonable to buy, rather than take the time to do, oneself. Hence our engagement with production that generates product separate from time use, allows a spread of production capacity, as ongoing time use can gradually be "dropped" from ongoing processes. However, services that require time use and knowledge are different: both in terms of "affordability" (Baumol's disease) and conceptual formation.

As a result, replicated knowledge (in order to "save" money in services institutions) too often shortens the capacity of further production in knowledge use, instead of furthering knowledge dispersal throughout the marketplace. This is why horizontal applications of time arbitrage need to be tapped, so that the spread of knowledge use is once again possible - just as it was in earlier stages of today's institutional formations. Eventually, the services that time arbitrage make possible, would not be thought of either as luxury or subsistence goods. Instead, they could become basic goods.