Even so, replicative knowledge is not sufficient, insofar as individuals experience knowledge as a truly valuable experiential or practical good. If a strong growth trajectory is to be regained in the near future, organizational capacity needs to make the most of time aggregates as a whole, instead of only utilizing the most skilled in the marketplace to generate replicative and non time dependent product. The most important forms of services provision are about individuals in relation to one another, not just individuals in relation to existing institutions. Monetary policy would also need to make this service product distinction, so that broad based backing of local services creation would be possible.
Presently, the critical differences between time dependent non tradable sector activity, versus non time dependent tradable sector activity, are not being taken into account. As a result, product from both sectors is treated as though interchangeable. While interchangeability occurs to some degree for the higher income levels of general equilibrium, this process doesn't hold for small wage settings.
As a result, time based services for small wages and income, need additional coordination within a separately existing and time based continuum. Granted, one does not often think about the problems that occur when general equilibrium tries to "fold" in small wage capacity. Possibly the best example in this regard, are painful discrepancies for services coordination at lower income levels, in hospitals which constantly have to make hard decisions whether to even assist people who won't be able to pay for services.
Meanwhile, time based services product is still treated as though abundant, in spite of the fact that relative to other forms of wealth creation, asymmetrically compensated knowledge use will only become more scarce with the passing of time. And yet consider how Brad Delong defines an age of abundance in a recent article:
The challenges we face are now those of abundance. Indeed, when it comes to workers dedicated to our diets, we can add some of the 4% of the labor force who, working as nurses, pharmacists, and educators, help us solve problems resulting from having consumed too many calories or the wrong kinds of nutrients.Note the fact Delong doesn't distinguish between the real abundance of tradables product, versus the supposed abundance of purposeful application for economic time value, particularly in a time of declining labor force participation. The 4 percent of the labor force he cites for instance, is not equivalent in terms of actual marketplace capacity in the same sense that is true for agricultural workers. Why? Time based product includes ongoing economic activity in both supply and demand of time value. Delong continues:
More than 20 years ago, Alan Greenspan, then-Chair of the US Federal Reserve, started pointing out that GDP growth in the US was becoming less driven by consumers trying to acquire more stuff. Those in the prosperous middle classes were becoming much more interested in communicating, seeking out information, and trying to acquire the right stuff to allow them to live their lives as they wished.Does anyone see some problems with Delong's assumptions? Too few are taking into account, a still existing dependence on previous wealth (particularly that of the now less "desirable" material stuff!) and government redistribution, to create the knowledge based services product which is now sought. In order for time based services to contribute to the "abundant" marketplace Delong imagines, they need a front row seat where it becomes possible to originate new wealth through knowledge use. There is no avoiding the fact that fiscal policy of the future will become mostly limited to the higher income needs of general equilibrium, and knowledge based services will need to be generated on more closely coordinated monetary terms for lower income levels.
This post actually began with some thoughts about recent efforts to expand liquidity through negative nominal interest rates. The comments section in a recent post from Nick Rowe, prompted me to retrieve an older post from Miles Kimball, in which he compared negative interest rates with an earlier strategy on the part of Silvio Gessell, for stamped money. Both represent efforts to increase liquidity which are sometimes difficult to provide, otherwise. I need to spend more time with these referenced links, but want to at least express some initial thoughts about the possibilities of a negative interest scenario at national levels, as opposed to the local levels which do not fully participate in general equilibrium conditions.
Coordination issues between time based services and other resource capacity would likely remain unchanged in national economy general equilibrium, through the sole contribution of negative interest rates. However, negative interest rates would allow for economic gains in tradable goods and stabilization of assets - both of which are no small feat. One problem would arise just the same, should governments expect to eliminate the use of cash, in that most finance costs are too high at the margin for those with small wages and income. If nothing else in these potential circumstance, groups with small wages and incomes would need to tend to monetary arrangements through locally managed means, to maintain economic viability.
While negative interest rates wouldn't benefit coordination for time based services nationally, local stamped money settings might partially fulfill this role, given the fact that this money would circulate within specific groups which already seek ways to coordinate time value among one another. This desirable liquidity component is quickly lost at national levels, however, where additional monies quickly enter the exogenous realm of tradable sector activity. Indeed, stamped money would need to note the difference between endogenous and exogenous wealth origin.
Non tradable goods and sectors are those most closely associated with income. Time value, knowledge based services and the assets which reflect them, are often the local environments in greatest need of stabilization. Fortunately, the stabilization of tradable sectors through negative interest rates in the short term (i.e. till more growth becomes possible), could also assist this process. In all of this, the environments which are most important for nominal stability, are those that are also endogenous and time dependent.