Thursday, August 27, 2015

Knowledge Use Systems: Prosperity's First Rule

In a sense - crazy though it may seem - the social and knowledge based components of mutual assistance, might be the easiest part of the process. Why? Establishing a wage compensation base is where things can get tricky. Participants would have to resist the urge to set the hourly wage base too high, in order to maintain complete coordination patterns. Any attempt to rely on compensated hourly wages alone, i.e. without income supplements (local ongoing investment patterns), would gradually lead to reasoning that not everyone is capable of participation.

Only witness the gradually developing exclusion of today's workplace. Someone recently joked that the requirements for an entry level position had become "5 years of experience, 6 Olympic gold medals, and superpowers." There's no getting around the fact, that a rising minimum wage floor can contribute to lower labor force participation over time. In certain instances, this also limits the kinds of small business formation which have small profit margins to begin with. While some would shrug off any worries about seemingly minor businesses losses, the reality is less marketplace choice, overall. Instead of using rising wage floors as a consumption "survival mode", why not strive for solutions which provide better lifestyle outcomes?

Hence prosperity's first rule for knowledge use systems, would be to generate access by encouraging environments which reflect existing wage and income capacity. This is a more logical approach than attempting to force wages closer to arbitrary consumption requirements. Granted, too many of life's necessities have become difficult to achieve through low wages. But a rising minimum wage mostly encourages governments and special interests to make the requirements for access more rigid than ever.

Knowledge use systems would integrate base wage capacity into local investment structures, from the first compensated hour that young students learn to provide for one another. These matched wages are simply how participants begin the process, through measuring and coordinating time use among everyone concerned. How would a given group determine a base wage? It really comes down to what everyone who participates, feels comfortable with. The opinion of the average individual matters greatly in this regard, because present minimum wages are already beyond what many adults are comfortable with, as starter wages in the workplace.

Hourly wages would represent the measured contribution of local time aggregates, instead of skill levels. Wages would need to be measured separately from income for all participants, in any knowledge use system that is established. Even though the hourly wage is small, its purpose is twofold. On the one hand, it is newly generated wealth because of a purposeful match which leaves no time debt. Just as important, it is the monetary representation of the services security these groups would gain, in lieu of government provided services.

Income potential - on the other hand, would depend on how individuals choose to interact with other forms of resource use and asset formation. There would be a minimal (expected) investment "floor" in the sense of basic living quarters, should anyone experience difficulties which negatively affect personal circumstance. The primary goal is to make certain each individual is able to maintain economic access in their community over the course of a lifetime, even if their active participation eventually becomes minimal.

How to think about economic access, as compared to "equality of opportunity"? Those who promote equality of opportunity, often promote mobility as being able to move where good jobs can be found. Whereas economic access - at least for this blogger - is about the capacity to generate local economies which provide opportunities for individuals where they already are. The paradox in this regard is that when local economies have a chance to flourish, there is less concern about immigration "taking away" jobs and services from local citizens in the first place.

One built in system advantage, would be the time based support for those who may not prosper financially in their later years. Suppose one is close to "retirement", albeit with few savings -  not to mention few remaining social connections. Through the group coordination of time arbitrage, one would still have others nearby for mutual assistance, even when family and friends are no longer close. Individuals would gradually be able to exchange earlier housing investments for simple building components that are easier to maintain as one ages, and closer to needed services.

Historically, people understandably prefer to seek security through the certainties of guaranteed income and wages. But much about capital flows has changed in recent decades, in ways that have yet to be understood. As a result, security needs to be sought not just through the investments which money can make possible, but also the reasoned security of time commitments on the part of local groups. Decentralization is greatly needed, even as governments have moved further in the other direction. If governments can embrace decentralization for needed services and local economic prosperity, it will also be easier for nations to remain open with one another for the continued prosperity of tradable goods markets.

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