While Williamson highlights the gains in consumer choice which have resulted from globalization, he neglects to take into account the domestic supply side intransigence, which limits those gains. It's the arbitrary limits to markets in housing, education and healthcare, which will mean continued calls for higher wages if those limitations are not addressed. Consider Williamson's quote:
Everything in the economy is in reality priced in terms of other things - everything is relative to everything else - and price tags would look like the Library of Congress if we had to list the price of an airline ticket in wheat, coffee, gold, Bitcoin, signed Andy Warhol prints, Hermes scarves, etc. Real people simply want things that are different from what the planners want.There's just one problem with Williamson's otherwise sound logic. Unfortunately, the beautiful mechanism and rational marketplace of spontaneous coordination for tradable goods, does not hold true for time value or the assets directly associated with it. Not only is the marketplace for non tradable goods somewhat irrational, those excessive limits mirror one another in terms of both knowledge use and asset formation. Unlike product which exists separately from time, time value thus far has not existed relative to other time aggregates in the marketplace. As a result, time value is caught in a realm of minimal coordination and skewed price signals.
When "special" time value remains exogenously determined, elements of planning once again take over what could otherwise be spontaneous market conditions. Many important consumption realities will remain in the hands of experts and policy makers in these circumstance, be they "planner" governments or anyone else with special privileges.
Regarding the time aggregates of populations: even though some coordination is possible for exogenously determined time based product, the cut off point is never quite clear. Once that point is reached, the marketplace for knowledge based services can become both uncertain and irrational, especially in tight money conditions. Individuals get caught in the never ending cycle of seeking additional time value through higher wages, in order to access the "special" time value allotted to some groups without a pricing context in terms of time based coordination. The irrationality of knowledge use allocation creates a services grey area, which not only affects the marketplace for assets but also the capacity of governmental response in a larger sense. The uncertainties of the services marketplace also make it difficult to determine a nation's wealth capacity in relation to other nations.
The irrational nature of the knowledge based services marketplace was fairly well concealed, so long as it was possible for nominal income in developed nations to extensively benefit from traditional production. However, given the dematerialization of developed nations, exogenous determinants for high skill services wage structures are no longer as easy to conceal or remedy. What's more, people no longer want as much "stuff" as they once did - hence a push for more services, experiential product and environment management has been ongoing for some time. From Jesse Ausubel:
American use of almost everything except information seems to be peaking. This is not because the resources are exhausted, but because consumers have changed consumption, and because producers changed production.Information has scarcely begun its growth potential, because many populations are not able to utilize it for local and spontaneous time based coordination. For instance, education has mostly been used to provide lottery tickets for basic economic access and the more important knowledge markets of the present. Hence the current efforts to balance income asymmetry, in spite of the fact wage adjustments do not address the actual problem. Instead, the problem lies in the still missing marketplace for services and time. Now that less nominal income is needed for traditional production, the logical response is to make more room in the marketplace for knowledge based production.
And in order to do so rationally, a marketplace which takes time value into account is needed. Otherwise, there are too few places in the economy for strong hearts and strong minds to have an impact on others and the world at large, in a sustained manner. Without that marketplace, too many strong hearts and strong minds have already been broken. Only consider: even though one finds room in the marketplace for strong muscle, even muscle isn't always needed, when it can be replaced by technology and machinery. Will a rational marketplace for time value emerge, now that traditional production requires less nominal income? Only the supply side knows for sure.