Sunday, April 5, 2015

A "Forbidden" Economy?

One of the noteworthy aspects of the 20th century, was the degree to which governments took responsibility for knowledge based services. Now, centralized forms of services organization have come under considerable strain. Should governments prove unable to maintain their commitments in this regard, who can...or will? The answers are hardly as obvious as one might expect. What's more, as Richard Cornuelle wrote in the late 20th century, "It is becoming clear that we have confused the state's blustering eagerness to take responsibility with an innate ability to exercise it."

Too many vital services were introduced into the marketplace, without providing room for real participation on the part of either producers or consumers, for time based product. As a result, knowledge based services don't always provide the kinds of experiences that individuals want or expect - particularly given how time value is expected to be arbitraged for hard to quantify "results".

If this were not enough, producers of services are scarcely in a position to negotiate for the skills sets most important to them. One could be forgiven for perceiving knowledge based services as a "forbidden economy" - one that everyone needs, yet finds little room for reciprocation. Services as government responsibility has become more difficult at both national and state levels, even though most policy makers would be reluctant to relinquish the role. However, most struggles over services take place within a budgetary context that makes it difficult to contemplate redefinition or reform.

Richard Cornuelle, on the other hand, sought to define a stronger services marketplace that went beyond the terms imposed by government. This week I had the good fortune to stumble on Cornuelle's efforts to transform the services marketplace, during the course of his lifetime. I'm still digging through some online remembrances, and one (April 2011)  was provided by Peter Boettke. I also have David Boaz (Cato) to thank for including Cornuelle's essay, "The Power and Poverty of Libertarian Thought" in "The Libertarian Reader". This book is what brought Cornuelle to my attention. From the essay:
...if it is true that the state is bound by its nature to bungle the business of making steel or shoes, what makes us think it is any better at the vastly more complex responsibilities of the modern full-service state: educating the children, providing pensions and healthcare, eliminating unemployment, protecting depositors from the imprudence of their bankers, and providing hundreds of other services, presumably necessary but beyond the reach of the market, not just for the few who have been left behind, but for practically everyone...The American polity has reached a kind of dead end, and libertarian thought, in its present state of development, doesn't help.
How can communities do a better job of providing necessary services, so that populations need not be endangered when governments prove insufficient at the task? Cornuelle grappled with this question, yet it remains to be answered. When budget struggles give way to hard budget realities, important services are often abandoned, because cohesive voluntary arrangements are not already in place. Populations end up accepting a diminished services marketplace with resignation, not realizing that local communities could plan to fill the void before economic circumstance are allowed to deteriorate. Cornuelle wanted to know - why can't libertarians embrace community as a valid concept?

Without an adequate services marketplace to contribute to economic growth, "buy America" is not only back in vogue but backed by both political parties. This is but one of the reasons services need to be organized so that they can directly contribute to growth, instead of depending on other forms of growth in order to remain possible. Otherwise, nations could mistakenly "turn inward", reasoning that they must return to mercantilism and nationalism, in order to maintain economic stability.

Some aspects of the services economy could be endangered, so long as widespread knowledge use remains forbidden. The main problem for these circumstance - at least in monetary and economic terms - is the effect low expectations might have on the long term growth trajectory. Neither governments or special interests help anyone, should they decide to reason, "If we can't have knowledge use the way we want it, no one gets it." And yet more national production (of product separate from time) may be required to satisfy those demands for limited engagement, than populations are able to support when labor force participation remains too low. As Richard Cornuelle said,
We need now to understand voluntary social processes as completely as we understand market processes, and libertarians could again show the way.

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