Friday, September 18, 2015

Local Corporations Could "Recreate the World"

While standard corporations - i.e. those with national or international capacity - provide specific categories of product, local corporations would generate unique imprints of what is "on offer" in the world. While such offerings do not always have a place in primary equilibrium; just like the marginalized, they can find "room to breathe" in alternative equilibrium. Even though the investment structures of these corporations would be local in nature, the communities which result would not be closed to "outside" ideas which could positively impact their diversity and growth capacity.

Local corporations would have some important government attributes, even though they would remain part of national government structure and monetary systems. Chief among these attributes is the ability to grant local production rights for local citizens in services, asset and product formation. These production rights are the attribute which make it possible to provide services and infrastructure, that minimal wage compensation otherwise could not support. Local production rights also make it possible for populations in the hundreds and thousands, to provide services formation which otherwise would be primarily associated with large cities.

Physical infrastructure in particular, would be amenable to international ideas, particularly those which result from student innovations which have generated rewards and acclaim. Several aspects of infrastructure would hold additional importance for local corporations. Whereas digital media has mostly been utilized for communication and entertainment until now, it could finally be tapped to aid the time based coordination patterns of workplace capacity.

Organizational capacity across multiple disciplines, would be able to generate "more for less" consumer structures (environments). How to think about this? A wide range of resource sets can be coordinated and defined in ways that reduce the burden for costs on the participants of the system. The reason this is so important, is that when non tradable sectors are not exposed to innovation and coordination among different groups, their costs tend to crowd out more innovative sectors when central bankers tighten monetary conditions, as has been the case since the Great Recession.

Local corporations are particularly needed, to encourage citizens that long term growth is still possible. When potential growth is held back, governments become more like those that Paul Romer speaks of in this recent post re Europe and immigration:
When doing the right thing ("be generous") seems to make the problem worse ("more will come"), it is time to pull back and reconsider. What is the real problem? What would actually be the right thing?  
The real problem is not that people are queuing up to get into Europe. Rather, it is that tens or hundreds of millions of people live in a place where a failing government precludes any chance at the basics that any person wants: "safety, dignity, opportunity, hope."
Romer added, "turn all these people into the resource that solves the problem", and I couldn't agree more. While he envisions cities that can scale spontaneous coordination for citizens, I imagine small communities that utilize a marketplace for time, to achieve coordination as a central starting point for wealth creation.

The worst thing in the present would be to do nothing at all, particularly because of the worsening political situation around the world. I am grateful to Lars Christensen for highlighting the fact that classical liberals on both the left and right cannot be complacent now:
It is time for a counter-revolution against the politics of fear and hatred. It is time for the liberals of the left and the right to speak out against those who would like to close the borders for goods, capital and people. It is time to speak out against the authoritarian tendencies in Europe and US politics...
Like Lars, I am greatly concerned about the potential loss of freedom and the warnings of the past. It is posts such as the one he just wrote, which help to free me from lethargy and give me the incentive to redouble my own efforts. We need to heed the warnings of the Great Depression, given the fact that in monetary policy, too little has actually changed.

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