Time value needs a more careful economic assessment in the near future. How so? Labor value is what institutions still need (to some degree), and labor in the traditional sense is closely associated with the needs of primary equilibrium. However, labor definitions are insufficient as indicators of human capital value, in what some refer to as the second machine age. This holds particularly true, given the fact time value needs to remain a central component of GDP.
One way to think about this: the time aggregates of populations as a whole, have to overcome at least two present day problems in the marketplace - a shrinking labor force participation rate, and the fact that new small business formation has been on a gradual decline. And as Ryan Decker recently noted, small businesses remain a more important part of any local economy, than is often realized.
The economic value of personal time, could potentially capture elements of GDP which are otherwise difficult to represent through the gains of the digital realm. If this is difficult to envision, time value would be closely associated with efforts to generate a (continuous) local group value growth trajectory, in terms of knowledge use and other local investment safety nets. A base monetary compensation would emerge from local group cooperation, which also reflects the ways in which a group becomes responsible for a wide variety of activity sets in a given environment.
This is also an alternative equilibrium, which would utilize a production norm somewhat differently from how it might be envisioned for primary equilibrium. How so? Unique price levels for local non tradable settings, would "float" as direct correlation for local asset formation and time based services. Populations would improve "income" capacity by directly tapping into innovation to improve their own living conditions.This would directly affect locally owned assets so that a community benefits from good deflation, instead of seeking price inflation to improve local living standards. On the other hand, any desire for a production norm or zero inflation in primary equilibrium, has to contend with the fact not all populations find benefit through good deflation for non tradable factors such as services wages or asset formation.
A psychological adjustment is also needed, in order to overcome the tendency to discount time value of those not presently economically engaged. So long as no one is convinced (regarding the worth of underemployed or unemployed), the economy will remain fragile and resources in danger of being lost. Without the "blessing" of societal monetary compensation for personal effort; in the future it would become increasingly difficult to serve, assist or otherwise help one another if one is not already gainfully employed within primary equilibrium.
Fortunately, the societal divisions of the present could still be mended. What's more, the process could contribute to economic activity which is not bound by the limits of government backed services formation. But first, think how time value is already recognizably different from earlier definitions of labor, and what that implies regarding the potential of time value in the future.
As labor gradually shifted from agriculture to manufacture, labor was increasingly thought of as a component which contributed to a final product, but was not directly correlated with that product in any time based sense. In other words, it became possible in recent centuries to diminish time aggregates from specific product formation without any noticeable effect on product quality. For centuries, time aggregates could be shifted towards knowledge use work without problematic debt loads on the systems that compensated knowledge use indirectly. This also became part of the standard definition of increased productivity.
Now, productivity needs a broader definition set as well: one that is capable of accounting for the contributing factor of direct knowledge use compensation. Not only are psychological considerations necessary for the restoration of time value, so too is the idea of productivity as a potential continuous trajectory for local group gains.
Think how labor value contributes to product in the standard institutional sense. People using machinery to create a ditch, does not necessarily mean the ditch is the desired end product. Rather, the product might be part of a project for an improved system of water flow. In traditional labor, one's primary time use is mostly subordinate to the plans of single institutions. Whereas time value is horizontally coordinated in knowledge use systems, by allowing a single institution to take on the functions of many. This means individuals would need to manage and be personally responsible for their time in a management capacity, even if one's time is used in relatively simple ways. Time arbitrage - as determined by ever changing product definition - would be structured based on both group and individually coordinated decisions.
Here's a way to think about time value as it relates to local group activity, versus individually matched time value. There are two sets of base group projects in the course of a given year for a "full" knowledge use system. These two sets are what represent time arbitrage coordinates beyond matched activity for personal needs. First, the services set is representative of what often occurs through taxation in primary equilibrium. Whereas, local assets include one's personal investment and responsibility for initial production capacity. As a result: in the latter, the entire group benefits from innovation gains through machinery and other technology that is utilized for both building components and infrastructure.
Hence time value comes into play not just when personal time is most desired component of the end product, but also as it relates to local group investment for for base production needs, and the production needs of ongoing projects. When matched time closely relates to local group projects, this is where machinery and automation have a chance to augment time value, instead of detracting from or otherwise taking personal time value out of the picture.
Likewise for investments in machines that local citizens might choose to augment ongoing healthcare needs. Indeed, one's cooperation with others to increase innovation and decrease costs, would play a large role in the flexible (internal) price points which result. This is where consumption definitions (and even certain price levels) become possible on the part of consumers, because the institutional function becomes internalized in local production and services structures. In normal equilibrium it is more difficult for the consumer to affect greater productivity in the same sense.
In knowledge use systems, time value becomes an important arbiter of outcomes - not just for the more immediate association of time value as end product between local citizens, but also for the indirect value of time as it relates to group investment of both time and resources. Machinery and other technology are considered by citizens for local group projects when that technology is capable of contributing to outcomes which are capable of freeing the time of all participants for more purposeful economic pursuits. Instead of local communities being limited by monetary budgets for pressing needs, the main limitation would simply become that of the time local citizens actually have at their disposal.
Time value grows as it contributes to the knowledge which reinforces and adds meaning to local support systems. In other words, one does not need to assign a certain monetary value to time value, because the coordination value of time proves capable of distributing knowledge and information where it is needed most. What's more, quality of life is gained by the fact that the group organizes in a way that neither innovation or technology is a threat to "jobs" or status.
Why is it not possible to think of time value through similar means in primary equilibrium? Monetary transmission in terms of asset and service formation does not operate smoothly across a wide variety of local equilibrium settings. This can also lead to problems for production norm application in national macroeconomic context. Resource sets do not always align well with time aggregates. As a result, time value needs monetary representation which can reimburse one's time use efforts over lengthy periods.
Locally coordinated equilibrium allows skills sets to become interchangeable, and reimburses time value throughout the entire socialization process. No one needs to become indebted in their youth or as they prepare for high skill levels, because they are compensated for sharing skills and knowledge sets with others as they move through the educational continuum. This allows time value to closely align within local economic settings - even as these communities remain connected with the tradable goods economies of primary equilibrium.
Update: Pete Boettke has an excellent post regarding the riots in Baltimore, which indicate how there is no time to waste, to start turning things around. Much as I stress the need for real work in rural areas, the same remains equally true for urban areas which have remained forgotten for too long. In terms of knowledge use, services creation and production potential, both rural and urban areas need to be able to utilize some of the same methods to regain economic access and vitality.