Saturday, July 9, 2016

Notes On the Output Potential of Time Arbitrage

Could the time arbitrage method which would be used by knowledge use systems, generate output gains? Time based product would exist as newly created wealth, in that the time value of others would be directly purchased from one's own.

Unlike the time value associated with meritocratic "value in exchange" compensation, time value as a "raw" commodity good with common exchange value, means that everyone is eligible to take part, in what is essentially a socially and monetarily compensated value in use structure. While monetary accrual, asset formation and time based services are part of this process, the primary value exists in the social and knowledge coordination which accrues over time, as held in relatively small group formation.

In recent history, most forms of beneficial economic coordination have been limited to the activity of cities and/or the large profit and non profit institutions which tend to locate in these regions. Much of this activity has been the result of fortuitous circumstance over decades and in some instances, centuries. However: in the 21st century, it has become vitally important for individuals and groups to generate further economic complexity, in areas and regions where it does not already exist.

Time arbitrage is one way to begin this process. Most important, the time arbitrage of an equilibrium corporate structure would be new wealth, which leaves no residual, fiscal or budgetary obligation to be met by others besides the actual participants involved in the process. The symmetric structure of matched time value, makes human capital viable as an economic starting point - one not dependent on the capital or resources required for asymmetric compensation.

However, this process is a completely different form of productivity gain. The compensated value of time arbitrage is not a residual of other (previously) existing economic activity, but a point of origination for broader resource use patterns which ultimately follow. Even though these coordination patterns would often resemble those of cities and towns, they would not be as location specific in nature. In other words, they would be less reliant on specific physical environments and their related real estate factors, to generate value.

Knowledge gains would not be quantitatively valued as specifically related or assigned to any one individual, but instead categorized as part of a communications process between individuals and groups. This also makes it possible to quantify the nature of the services process, as a way of recording what compels individuals and groups to seek assistance from one another, rather than a specific component of the process that may otherwise generate profit.

Asymmetric compensation often means that time value is reduced to its lowest common denominator, in order to meet costs and stay within budget. While this is generally not problematic when resulting product doesn't include current time value, other factors come into play when time value needs to be a part of the final product. This is all the more true, when knowledge apples to product which includes an experiential or non specific outcome.

Even though asymmetric compensation greatly benefits from merit and personal time investment, asymmetric compensation cannot meet vital knowledge based needs without detracting from other forms of wealth. So long as an economy continues to grow this problem can be overcome. Today, economies have ceased to grow and asymmetric compensation of knowledge is increasingly endangered.

The problem of compensating time value and knowledge use which is not associated with tangible or tradable product, has a long history. Indeed, part of today's ambivalence regarding time based product, is a result of the fact both public and private enterprise have little choice but to meet budget requirements through the same means - reductions of time based product wherever possible. For instance, of the revenue that government sets aside for purposes of employment, Adam Smith wrote:
Had they not advanced this capital to government, there would have been in the country two capitals, two portions of the annual produce, instead of one, employed in maintaining productive labor. 
Of course, these dead weight losses are offset to some degree, since wage and income are taxed in a continuum regardless of productive or "unproductive" origination. For instance, Smith stressed that "unproductive labor" as paid for by government, is also compensated by diverted revenue from the same:
The public expense, however, when defrayed in this manner, no doubt hinders, more or less, the further accumulation of new capital; but it does not necessarily occasion the destruction of any actually-existing capital. 
Symmetric compensation could make it possible to generate further employment and the preservation of applied knowledge use, which need not destroy other forms of existing capital. In the process, human capital gradually becomes a part of the "annual produce" which Smith spoke of. Even though the formation of knowledge use systems would start slowly, it would represent a much needed turning point, so as to reverse today's no growth environment.

Productivity - until now - meant the ability to apply asymmetric compensation wherever human merit appeared as most warranted. Just the same, greater productivity can coexist as directly applied human capital, so that the preservation of knowledge and full employment need not represent a problem for the depletion of other existing capital and resources.

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