One responsibility for the equilibrium corporation as an institution, would be accounting for the new wealth which a marketplace for time value could generate. In this scenario, time value enters the marketplace as a basic commodity, and it brings new money into the economy which is also resource linked. Resource linked money would specifically focus on resource sets which are important for all individuals, in order to as closely approximate monetary compensation as possible, for one's workplace efforts. By utilizing internal organizational capacity for these resource sets, good deflation would finally become possible for non tradable sector activity. This particularly matters in a macroeconomic context, since it provides a way for time based services generation to sidestep the problems of Baumol's cost disease.
Baumol's cost disease is a general equilibrium problem, in that the income levels of (relatively) less productive time based services, nonetheless need to rise to meet equivalent work offerings in local primary market employment. This organizational capacity for time based services (as secondary market formation) is externally based, due to its dependence on the valuations of primary market positions. Consequently, the amount of time based services possible (on these terms) is determined by the amount of primary market resource capacity (and valuation) which is available.
This secondary market resource structure, which reflects local aggregate income and real estate value, may also include state and national revenue. While these additional income flows are positives, the valuations they create are nonetheless a double edged sword, for economic access. Further: the most prosperous regions include international resource connections which contribute to local equilibrium values as well. Steve Randy Waldman recently noted Baumol's cost disease as a factor for population density limits, and in a post last month I also wrote about some of the challenges for generating more density in cities which are particularly composed of secondary markets.
Far more is at stake in general equilibrium conditions, than simple building costs or personal time use considerations. Multiple markets tend to overlay the ones which are obvious, and these additional markets operate according to their own sets of supply and demand constraints. The availability of resource capacity which flows from other nations and regions, translates into higher local costs than would otherwise result for working and interacting in the most prosperous regions. Yet these aren't the only additional cost factors, since traditional construction in many locales, has seen little innovation for materials, design or even mass production.
The sticky markets (and wages) of general equilibrium, make it difficult for non tradable sector factors to be organized as a clean slate that could extend across multiple categories. However, it is possible to achieve good deflation for non tradable sector activity, when the process is channeled through an alternative equilibrium, which would create a clean slate for both services generation and local asset formation.
Doing so would allow building construction to more closely approximate actual costs. Meanwhile, these costs can be further trimmed through innovation in materials and design, along with mass production of the more basic building components. This physical environment makes it possible to approach knowledge use as an internal coordination mechanism. Due to the lower local costs of living, the level of income one normally associates with knowledge based endeavour is no longer necessary.
Consider how resource linked money can contribute to this scenario. In alternative equilibrium, time based services - regardless of the level of skill involved - would no longer have to directly compete with the productivity requirements of prosperous regions, because these services would operate in a time based continuum which exists solely in relation to overall group time value. The resource link is made explicit, in that it is institutionally connected with the time continuum social benefits, alongside lower costs for the physical components of local environment. Even though this time value is monetarily compensated at less than minimum wage, it does not face the housing or time based services costs which are expected in general equilibrium conditions - particularly in prosperous regions.
Another important consideration: the compensation of resource linked money, creates a coordination space for individuals, which accrues from the first workplace efforts of one's youth. After all: how much of what is sought in today's prosperous regions, really consists of more than one's personal space for coordination with others? This lifetime position is flexible to an extent that portions of it can be rented to others, when not currently in use. Should any group begin anew elsewhere, each individual's coordination space remains intact, within the overall structure.
Resource linked money would make it possible for more individuals to enter knowledge based work and services in regions that now lack economic complexity, yet without having to sacrifice basic life amenities just to do so. Resource linked money could provide means to grow knowledge and time based services directly, without having to transfer wealth from other sources in order to do so. Indeed, should knowledge become more closely associated with wealth creation, much of the political confusion of the present, might very well subside.
No comments:
Post a Comment