How to think about the monetary transmission between asset flows and services? Ultimately, these vital functions need to exist on terms which are easier for the public to understand. Otherwise, it will become increasingly difficult for national governments to assist in the kinds of economic coordination that citizens need most. This is particularly true, in terms of needed infrastructure.
There's no time like today to begin the process of redefining government roles, given the long term budget concerns of the present. Once again, governments need to focus on maintaining open pathways for tradable goods, both domestically and around the world. However - if they did not insist on defining the terms - governments could also become conduits for knowledge use potential between nations, as well.
What, then, about the growing cycle of entitlement and operational expenses, which now stand in the way of optimal government activity? Some of these (primary equilibrium) economic burdens, eventually need to be transferred to local level knowledge use systems. Even though governments often have adequate resources to compensate time use indirectly, uncertainty about the process is always a factor in the marketplace.
Shifting time use to alternate equilibrium would restore needed links between income and resource use, and make it more obvious what work is actually taking place. Over time, this process would relieve pressures on pricing structures - which can only go so far to include today's marginalized. In particular, resource decentralization needs to happen for both time investment, and the investments which contribute to (relatively) non tradable asset formations.
By way of example, consider the growing difficulty of maintaining labor force participation rates at desired levels, in the developed world. This process of downgraded time use aggregates needs to be reversed, so that governments can get back on more solid footing. As it is, central bankers in developed nations are already reacting to time aggregate degradation in the marketplace, with varying degrees of monetary destabilization.
It helps to remember that this is the same dynamic which developing nations have inherited from the existing global structure. Fewer hours spent in production processes, has meant fewer citizens with vital spending roles. This makes it difficult for developing nations to "come up to speed", given their inability to globally compete with the same higher level of time use aggregates which were once needed in the marketplace. Even though developing nations often have fewer hurdles for innovation in general, they will still need more direct means of accessing services formation, just as is true for the developed world.
Even so, one of the benefits of alternate equilibrium (in the form of knowledge use systems) is that a simple transmission process between asset formation and services formation would become recognizable. Not only would this benefit local citizens who directly take part in these economic processes, the results would provide a natural laboratory of experimentation for the more complex monetary transmission which takes place at a national level.
Unlike indirect time use compensation which can be difficult to discern, directly compensated time use - just like new commodities - provides a starting point to generate new assets and services flows. Where people once generated time value in relation to production processes, assisting others in coordinated activity would become the new production process - with time use as the (first) compensated product. Most important, this would allow time use to resume its rightful role in economic models.
Without adequate time representation, both price and output potential can be distorted in economic models. As luck would have it, price levels and output levels make more sense when time use and income aggregates are not falling away from the equation. Even though price and output may seem sufficient when models are framed in terms of government capacity, this is not enough. The aggregate spending capacity of a nominal target is needed, before full employment and alternate equilibrium can become real possibilities.