Monday, May 23, 2016

Economic Time Value is a Perishable Commodity

Of course, all time value is a perishable commodity. However, economic time value deserves special consideration, in part because of today's general equilibrium demands on the part of non tradable sectors. Unlike the majority of other resource capacity, the time we "spend" on anything, is time we can't regain. Yet the fact time is a perishable commodity is often missed. Indeed, one's personal time use options get little respect, if and when they aren't backed through monetary representation. Fortunately, we have the potential to make time value count on economic terms - a possibility that should not be lightly dismissed in an era of automation.

Some would say that time value is a precious commodity as well, and I agree. That said, precious is not to be confused with exclusive, which defines the nature of asymmetric (partial aggregate) compensation for time value in general equilibrium. Exclusive is that which has been "proven" in terms of personal stamina and worthiness. When we arbitrage for skill preference on general equilibrium terms, we lose the ability to arbitrage for aggregate skills capacity. The primary inequality in all of this is not one of general resource use, but of lost aggregate time value which is now beginning to impact nominal income levels.

And even though the broader compensated mutual assistance of time based product would not always appear as though "precious", that does not change the fact everyone spends time in personal effort with others that cannot be regained. In other words, time availability for productive and economic endeavor is the ultimate scarcity. This is important as a reasoning base, for compensating mutual assistance as a basic commodity good. Further, more that is truly precious can be found, in a marketplace for time value capable of greatly expanding the definition of practical and experiential time product.

For anyone who needs the full economic value of their their time as a starting point for personal responsibility, mutually compensated assistance would serve as a social contract - one which could help populations preserve the broad economic gains of recent centuries. By defining time value as a perishable commodity GDP component, the economic role of time value could address today's confusion, regarding long term growth potential.

Lost time value is all the more evident, for youth who consequently have few means to accumulate assets for future goals. In particular, arguments against childhood labor which gradually prevailed in recent centuries, are a mixed blessing. While formal schooling is valuable up to a point, childhood mandatory schooling does not correlate with the kinds of learning that provide either the most practical life skills or personal challenges.

The separation of children and young adults from the marketplace has gradually led to diminishing returns. Part of the confusion in this regard is the nature of labor itself - little of which is "hard" in the same sense as that which took place centuries earlier. Hence today's students have been expected to spend years on efforts which have little economic/social reinforcement or impact with others. The result is like trying to build a strong net, but through the early years of net building, not allowing the strands to connect with one another.

If education is to contribute to future economic gain, policy makers need to recognize time value as the perishable commodity it actually is. Years spent sitting in dutiful rows taking notes, is time that could have been spent applying the fruits of education and exploring them on terms that make sense to one's spirit. A quote attributed to Benjamin Franklin illustrates the much needed integration of education with daily life, quite well:
Tell me and I forget, teach me and I may remember, involve me and I may learn.
Involvement is not a matter of classroom respect on the part of teachers and students. Involvement won't count until students are monetarily compensated for assisting their peers, on terms that allow them to coordinate the process among themselves. Until young people are able to do so, the belittlement of one another, the crude imitation of the meritocratic and hierarchical structure of their elders (i.e. "I'm at the head of the class, she's at the tail"), will only continue. No one can afford to keep pretending that the "important things in life are not about money" (especially for purposes of national accounting!), when absolutely everyone recognizes money as a life structuring priority for obvious reasons.

Even though there is a humane aspect to bringing economics and money into the social mechanism of mutual support, rationale also exists for doing so at a broader level. Specifically, by treating time value as a perishable commodity for purposes of GDP, it becomes possible to support the present evolution of production capacity not just in the sense of technology for tradable sector potential, but also that of non tradable sector potential. By bringing time value into the realm of long term capital gains, societies may gain the confidence to free the productive potential of environmental design, as well.

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