Money...involved the creation of a new inter-subjective reality that exists solely in people's shared imaginations...money is the most universal and effective system of mutual trust ever devised.Of course, in saying this, Harari defines a vast stretch of time during which money has transformed the lives of countless individuals. More recently, money has apparently lost some of its earlier luster. Hence Arnold Kling writes,
I like to say that money is a consensual hallucination...What about hyperinflation? Think of that as the government needing to pay for its deficit spending through an enormous counterfeit operation. One that ultimately undermines the trust in money and wrecks the protocol for exchanging goods.Ouch! Arnold is hardly alone in his musings as to broken trust and broken markets. Did government "ruin" money for us...or government cronies...or both? Nick Rowe provides the "money as necessary evil" response to Sandwichman in a recent post re Say's Law shortcomings:
I can't see any practical way to resort to barter, and make Say's Law true in theory. The cure would be worse than the disease. We seem to be stuck with money. Some monetary regimes are bad, and some are even worse.Where is the inter-subjective reality which Harari spoke of? Once, it existed in the resources which individuals were able to directly work with, and money often provided a simple augmentation of this process. Now, a marketplace for time is needed. Money needs a chance to further evolve, so that it can fulfill the more personal roles which remain MIA in the economy of the present.
Time based coordination roles have the potential to substitute for the kind of intrinsic wealth which land once provided, prior to twentieth century production gains. That earlier (subsistence based) wealth of land has gradually evolved, into a form of wealth which particularly benefits from societal coordination. Whereas some markets fulfill this process in purely price based terms (i.e. minus time aggregate value), others need compensated time value as well, in order to become and remain viable. Time arbitrage could complete a necessary process of adaptation, for economic orientation towards services and knowledge use.
Money has become problematic in part due to services imbalances, which were superimposed on traditional production and asset formation. Over time, governments have usurped too many time use roles, as they have consolidated production gains from the marketplace. One problem with this process is that governments are forced to define employment based on merit, instead of through the actual time aggregates of given populations.
Consider what happens to societal coordination for instance, when skills value usurps time value in too many circumstance. Governments are not well equipped, to compensate for time value which has not been accounted for in the marketplace.
Local populations can overcome this allocation problem, by treating time aggregates as investment fallback positions in local support systems. One benefit of this process is that populations would not have to use their governments to allot needed services beyond what is already possible. Of late, governments are increasingly falling short in their services based promises, and they have attempted to grant too many favors to associations which define the conditions by which services "must" be produced. Now, aggregate demand and the monetary systems which rely on it, are paying the price.
This is why many individuals need a marketplace for time, in order to regain services and personal values which were lost to arbitrary definitions. It is particularly important to do this before the present marketplace further erodes monetary values in relation to other resources. Once services based aspects of monetary activity come into better balance, money can recapture the role for societal coordination that it held for so long.
A marketplace for time value (equal monetary compensation for mutual time coordination) would go a long way to improve public attitudes about money. How so? Money is capable of supporting value in use endeavor, if and when value in exchange does not provide a complete marketplace. Local communities would generate knowledge use systems which pay local citizens for actively assisting one another in the marketplace. Key in all this is not to deny the value of governmental context, but to find better means to coordinate time use than governments (and other institutions) have been able to provide.
Until it is possible to do so, many will continue to blame money for problems which money was never responsible for in the first place. By reimbursing time arbitrage - instead of cancelling time aggregates in favor of meritocracy - a tremendous amount of skill potential can be brought back into the marketplace. What's more, money will finally have a chance to return to the place where it began: subjective reality.