This post is mostly a consideration of some theoretical constructs that are important to me. Hopefully these thoughts will assist any new readers who may have experienced difficulties, in trying to determine what underlies my work. In two years of blogging, the symmetry theme has come up frequently. Still, I have yet to come across other areas of economic thought with a similar approach - particularly in terms of labor force participation aggregates.
First, I need to explain how my contextual idea of symmetry is different from symmetric equilibrium as expressed in monetary terms here. Robert E. Lucas, Jr. in "Collected Papers on Monetary Theory" stressed a symmetric equilibrium as one in which "all producers choose the same strategy, and all consumers get the same fraction" of the goods available at a given price.
The symmetric equilibrium as stated by Lucas also reminds me of the one price "law" and something interesting about government in this regard. Non tradable economies exist in tension with tradable and global goods production, in part because local conditions play havoc with one price (hence democratic) concepts. If that were not enough, governments try to enforce one price circumstance, despite differences in local monetary flows which leave unique imprints on local service structure (availability) and asset formation.
Hence the oddity of minimum wage floors tailored for city conditions, planted in the outbacks of wherever - at least in the U.S. But that is only where "one price" problems begin, given government's propensity for subsidized services first subjected to special interest requirements. The above referenced symmetric equilibrium exists, but it is mostly a NIMBY equilibrium which is perfectly happy to function with little further growth or inclusion. This "let's don't change a thing" approach has also done some serious damage to central banker monetary logic. Without a marketplace for time value, symmetric equilibrium does not have adequate means to encourage full labor force participation. As many readers are aware, this is the symmetry I am most concerned about.
From here I'll construct my initial thoughts for this post. Symmetry - as expressed above - does represent spontaneous economic coordination - up to a point. After that, equilibrium becomes murky, and economic access becomes limited or otherwise informal. This is to be expected, for a tremendous amount of resource coordination has already occurred which follows the patterns of external (global and tradable) wealth generation. In other words, each addition or component of GDP is incorporated into previous patterns through asymmetrical flows. Where it is not possible to maintain economic diversity through these externally driven flows, wealth generation could also utilize the internal coordination of time aggregates, as a starting point.
Internal coordination would provide an immediate and recognizable symmetry, through matched services time. This organizational method holds promise not just in terms of new wealth for human capital, but also for purposes of accurate representation of services and knowledge use activity. Skills capacity is asymmetric and normally compensated as such. However - through the symmetric means of local organization - a greater degree of knowledge capacity can be preserved, alongside full economic representation at the same time.
So I will suggest a symmetric theoretical interpretation, which relies on human capital additions to wealth creation. This contribution can be measured in time based (hourly) units and accounted for directly as a monetary component. The asymmetric approach to skills compensation would normally not be problematic, but too much of it has hidden government subsidies which have led citizens to question democratic processes in the U.S. For instance: even though many citizens do not question the authority of physicians, they do question the right of governments to apportion taxpayer funded physician time to those who do not have the means to pay, which only exacerbates supply side limits in this regard.
Even though physicians can hardly be expected to make dramatic changes for supply structure in primary equilibrium, some would have the time and ability to assist in efforts to generate alternative equilibrium for knowledge use. Doing so would relieve the work and government deficit pressure of all concerned. Even though additional wealth formation would not compare to normal high skills compensation, doing so is not the point. Rather, individuals would be compensated for their time and efforts in assisting one another - a valuable societal contribution indeed, as voters and central bankers alike clamp down on efforts to extend present day economic conditions to those who still seek access.
Local knowledge use systems would also provide a more precise monetary option than is possible through credit formation, even though the process would take decades to develop. This monetary stabilizer could also begin the process of restoring the output level which existed prior to the Great Recession. A primary benefit for monetary policy, is that a time based symmetrical approach would be accountable at the outset, for its contributions to economic conditions.
Also, knowledge use systems would legitimize informal capacity which extends beyond one's immediate family and friends at local levels. These systems would allow small groups to envision the processes which exist between monetary representation and the efforts which individuals extend to one another for services and other forms of production. Because the wealth creation is contained in a complete cycle of local asset formation and services production (non tradable goods), local processes can be set into motion which over time would relieve the pressure between non tradable and tradable sectors of the economy.
Doing so would erase some of the confusion which now surrounds government economic participation. Even though asymmetric compensation for valued skills sets is highly logical, so many knowledge based services are government compensated and subsidized, that system wide imbalances have resulted which now affect the outcomes of bond formation. Further, what appears as problems in productivity, can also be attributed to the fact that too much redistribution occurs which cannot be directly attributed to knowledge based product.
Knowledge use systems would seek to redress these problems. Not only would the confusing asymmetries of time aggregate utilization gradually decline, but also the need for debt accumulation of asymmetric services compensation (and its associated asset structures). Symmetric compensation would allow individuals to purchase time value through their own quantitative time, rather than the unknowable depths of specific skills values. The result would be a product which is worthy of direct monetary representation, albeit of a limited nature. Most important is the fact that millions would once again have a foothold in the economy by which to expand their horizons.
One way to sum up my perspective on future growth potential, is this: many important forms of knowledge based services have natural growth limits when they are constrained by secondary and asymmetric forms of compensation. Once any society reaches a certain point of maturity in terms of traditional production, asymmetric skills compensation - and the asset formations this approach relies on - can contribute to tight monetary conditions around the globe.
Several aspects of recent economic circumstance should give anyone pause. For one, services growth has been more important in developed nations for GDP than other forms of production for decades. Not only do developing nations expect services to eventually outpace traditional production, but many nations utilize a high expectations consumer framework by which to expand services further. Alas, these government directed consumption strategies are reaching natural limits. Consumers now need greater roles in their own destinies. Many groups need the options of both direct services formation, and the ability to define consumption (and infrastructure) needs in multiple environments.
Will nations be willing to accept these realities? Future growth depends on it, and symmetric services formation would make more accessible forms of growth possible. In the past, services depended on the secondary support which traditional production made possible. Many institutions were once able to reward high skill levels through concentrated resource means. But now, representatives of the supply side must recognize the fact they need to expand the definition of growth potential, in order to maintain economic stability across all sectors of the economy.