Thursday, February 9, 2017

Skills Use Permissions as a Malthusian Constraint

Economies that rely extensively on skills permissions will eventually run into problems, if those permissions include basic time based functions - especially during times of economic stagnation. Permissions based time value can easily become a Malthusian constraint, in part because this organizational structure leads to a fixed product which is relatively inelastic. Is it possible for individuals of widely varying income levels to live well, without time based product that requires such a high level of skills permissions? Answers may depend on whether other structural options exist, that can taking the finite nature of time value into consideration.

Even though skills permissions have evolved for good reasons (people want well qualified health providers for instance), constraints may become Malthusian, if organizational capacity for time based product remains mostly permissions oriented. Nevertheless, it's difficult to think about supply constraints in context, when time based product becomes an outsized component of marketplace costs. Those costs also imply a broader marketplace range, than what may actually exist.

The time based product of healthcare, is likely more of a Malthusian constraint than is recognized. Recently, Dietrich Vollrath explained how Malthusian constraints might hold:
First, living standards are negatively related to the size of population. This would occur if we had some sort of fixed factor of production. Typically, one might say it was agricultural land, but you could just say resources if you like. It isn't even important that they are truly fixed. So long as the resources are inelastic, whether due to a physical limit or because bringing them into use is prohibitively expensive, you'd satisfy the first characteristic of a Malthusian economy.
Malthus was "proven wrong" so to speak re his original argument, when advances in technology made it possible for agriculture to overcome the tremendous food production constraints he witnessed during his lifetime. However, even though healthcare has also greatly benefited from technology, the underlying problem is the way healthcare is positioned as a secondary market structure. Even though technology could make some aspects of time based healthcare production less expensive, that fact alone won't dramatically affect the revenue sources by which healthcare providers gain incentive to increase output. The harder it is to access revenue gains in general equilibrium, the more difficult it is to pass the lower costs of technological progress, to consumers.

On the other hand: not only did technology greatly increase agricultural output; the reality of vastly more food, benefited other crucial marketplace factors at the same time. That - in turn - meant revenue growth in aggregate from multiple sources. Technological expansion of agriculture was a major first mover - or primary market - event. In order for healthcare practitioners to accomplish anything remotely similar, the process would include providing assistance for institutions which structure aggregate time value as a central feature for replication and output gains.

In other words, time value would function as a basic commodity for further knowledge and skills processing, in a first mover market position. Think local services "refineries" perhaps, only with less costly production procedures! Instead of pipes and metal running everywhere across the landscape, human neural networks would make the crucial connections. Or perhaps one could refer to these processing plants as "farms" for new areas of productive agglomeration. Ultimately, the product of additional economic time value would provide benefits to other marketplace components simultaneously, much as more food meant earlier gains across entire economies.

While time based product will remain a fixed factor of future production, those limits need not exist to such a degree that services production and consumption face arbitrary limits. Today, time based product cannot easily replicate itself, without facing further dilution of the external revenue sources it requires. Fortunately, replication of services product is also possible via internal wealth creation, through cooperative time processing. By organizing for greater services output which need not rely on already existing revenue sources, time based product would be able to overcome some of the Malthusian constraints that presently exist.

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