Granted, production reform is more of an issue for non tradable sector activity, than that of tradable sectors. With some exceptions, many forms of tradable product aren't perceived as "necessary". Hence tradable sectors have experienced fewer production restrictions, than non tradable sectors. Many technological gains in recent centuries, are due to the freedom and flexibility of the tradable sector marketplace.
Production options for non tradable sectors - particularly housing and time/knowledge based services - became severely constrained by comparison, in the twentieth century. Even though municipalities continue to prefer traditional housing, they are less able to provide it for lower income levels, which lack the resources necessary for new infrastructure costs.
Since lower income levels (thus far) face requirements to purchase the same professional services, housing and physical infrastructure as others, that means less discretionary income in aggregate, to support the tradable sector activity which is everyone's economic growth base around the globe. Yet lost retail opportunities are only the tip of the iceberg, as fewer individuals remain able to form families, own property or otherwise maintain an active presence in the marketplace.
Even so, it's not just the plight of lower income levels, which has led to more fragile economic conditions, of late. Why? The burden of today's non tradable sector organizational patterns, falls equally on citizens and governments alike. Despite the fact governments still tap into vast revenue sources, the monetary flows necessary to fulfill non tradable sector responsibilities have become too unbalanced, in relation to other existing resource capacity. Production reform is needed for non tradable sector activity, in order to provide economic stability well into the foreseeable future.
Consider some "big picture" factors in this regard. Too many pensions are becoming an endangered species, even as municipalities continue to come up short in revenue for infrastructure maintenance. And a recent Bloomberg article provided an apt reminder, why more sustainable services formation is needed in the near future:
A 65-year-old couple retiring this year would need 57 percent of their Social Security payments just to cover their health-care expenses. For a couple 10 years younger, with plans to retire in 2026, that jumps to 88 percent. For a 45-year old, it's 116 percent.At this rate, how would any Social Security be left for retired individuals to provide the taxation necessary for the local municipalities in which they reside? Let alone anything else, especially for a 45-year old? Or...if pensions can't be relied on as a fallback (for Social Security) to continue paying property taxes, what is? Does anyone really wonder why a 68 year old woman was glad to be able to "pass into the eternal love of God", instead of having to vote for either Clinton or Trump as the candidates to remedy domestic concerns? God knows I wish my outlook were as positive as that of Deirdre McCloskey, but the facts of recent years suggest otherwise.
All the more reason, why I stressed in my last post that innovation needs to take place across multiple disciplines, so individuals and governments alike might regain the capacity to coordinate their ongoing responsibilities. Only consider the legal dimension, which in some instances can derail low income levels as surely as any health crisis. Alongside the need to directly confront unemployment issues, is the equally large issue of bringing aggregate resource capacity into better alignment - regardless of public or private labels.
Thus far, political factions do everyone a disservice by pretending these problems are all about victims and aggressors, instead of confronting system imbalance problems head on. Among other glaring discrepancies is the "maker taker" reasoning, which would turn everyone into a "loser" if they have not maintained economic access. It's time to back off the hysterical judgments, for too few now hold the vital production rights which continue to destroy time value on the part of everyone else. Governments have already tried to make up for extreme differences in time value, for too long.