One might not assume a need for economic coordination on a broader scale. But the lack of shared experience has meant lost friendships and lost trust. Too often, people have little reason to communicate with one another, particularly if they don't have the pathways of economic access which make it easier to do so.
Not long ago, Tyler Cowen asked his readers for nominations as to those who should be noted for their contributions. Had I remembered soon enough I would have suggested Ivan Illich, for his thoughts about education remain as timely as ever. Illich seemed to know what was at stake. People would gradually lose important local connections, as education became more rigid and formalized. While many were able to remain social through sports activities, shopping and other shared outings, others became more isolated. Finally, even the consumer role has became difficult to fulfill. More production from everyone, please - not just the "cream of the crop". From Ian Shepherdson, when asked about the future:
We can't have the economy driven just by the consumer. We need capital spending to provide a boost to productivity.But what about the capital that individuals have already invested in themselves? Without a marketplace specifically delineated for time use, that effort can be lost. Plus, many of the simpler investments and resources available to those with lower income levels, don't always provide reliable income streams in the present. This can be problematic if one needs to rely on self employment that does not involve continuous physical labor.
How can human capital be thought about in more productive and rewarding terms? When neighbors still had common purpose, the goals of the young also mattered, for what the community was able to become. "It takes a village" (to raise a child), as Hillary Clinton wrote in the mid nineties. Even though Clinton meant well, she used the phrase for the goals of the state, rather than the goals of community. Yet even Republicans who disagree with her arguments, essentially approach education by the same means. While Clinton's book inspired many, it played a role in creating a preschool learning environment which only moved the needle of time value further away, from the limited time value everyone still held.
Children need new ways to be responsible long before they reach adulthood, and they need to be monetarily compensated for doing so. Even if they do not remain in the community of their childhood for a lifetime, they will have gained more meaningful friendships than otherwise would have been possible, by helping others. One of the best things about local investment is that it can be augmented by purposeful time choice. In knowledge use systems, these individuals will have already spent their younger years assisting their own classmates in their studies and ongoing work projects. What's more, access to local community investments from an early age, makes it possible to pursue other goals and challenges when one is ready to do so.
Human capital needs to remain closely associated with the income streams that individuals rely on, on a regular basis. The time value that friends still seek where possible, can become the compensated time value which local residents ultimately discover. As Dr. Madsen Pirie wrote recently, it is economic "nonsense" to assume that there needs to be a winner in every bargain. This holds particularly true for time arbitrage which holds both economic and social value. Investment capacity has been lost, because everyone has forgotten how time value actually exists in relation to resource value. As a result, the purpose of education has blurred considerably.
Just as private enterprise came to share responsibility for healthcare expenses in the U.S., public education relied on housing capital held by individuals (property taxation) to achieve its goals. One could say housing capital remains "parked" in local economies primarily for education expenses which outweigh those of other public service expenses. However, housing capital can be freed from providing educational income streams, so that people could be tapped directly for matched educational income streams. The direct link that once existed between human capital and educational potential, needs to be repaired.
Washington's subsidized support for housing, is the primary link national government now holds with local economies - large and small. Consequently this provides support for today's K-12 educational structures as well. Each Washington supported "bigger and better" house became bigger and better salaries for teachers in recent decades. Indeed, there was never an effective taxation system such as this for healthcare, in terms of local government budgets. As a result, local wealth didn't translate into local healthcare needs. This is one of the main reasons time value needs to become a serious option for healthcare needs, because many still can't afford healthcare in spite of its support from government and countless non profits.
Not only does human capital need to be more widely supported in community, housing as wealth needs to become a more flexible part of the equation. Stair step knowledge use could be a "pass it forward" learning method, by which students are compensated for passing on their core studies to the next younger group. This process would allow full utilization of human capital at every step of the process, in ways that generate much needed monetary flows in local economies.
In earlier societies, education often took place through an ongoing time use continuum. Not only does this natural process smooth consumption roles for multiple generations, it would also apply for a similar strategy in building component and land use investment. There is much potential wealth to be captured in the investment process of learning, which until now has been largely wasted in terms of personal identity and economic capacity. The incremental process of learning, pairs quite well with the incremental process of investment activity as one goes through life. By no means should these activities be reserved for only a small portion of humanity, when it is possible for anyone of limited means to grow a better future through a much needed, value in use economy.
Update - Nick Rowe has a good post today about human capital, as well: