Monday, May 29, 2017

Matched Time: New Wealth, Complete Debt Obligation, or Both?

Matched time - or time arbitrage - can be likened to a debt obligation, in the sense that a completed time obligation resembles a completed loan. However, unlike the completed loan which solidifies a given state of resource capacity (often in the form of income capture), matched time arbitrage incrementally moves growth forward. Even though traditional loan formation can still generate a similar process; at root it remains technically stationary, or dependent on real economy conditions. On the other hand, matched time could generate new wealth which moves beyond traditional resource shifting functions.

Unlike the nominal representation of money in a loan process, time arbitrage is resource capacity, with real economy or supply side potential. Where a traditional loan is one unit of transferred real economy activity, matched time would generate two units - both of which are capable of expanding the marketplace outward or "forward". Only recall that money is not an actual wealth component, to understand why matched time (as matched loan) is different from the monetary obligations which are gradually reduced on ledgers. Should matched time become part of a recording process, it would tell stories of voluntary economic commitments - each capable of wealth generation and the contribution of real activity to the economic landscape.

In time arbitrage, the mutual employment of time commitments is no longer a system cost, but rather, a cost in terms of personal time choice. Whereas one's time is normally sold as skill demand in the system costs of asymmetric compensation, and skill providers in these circumstance tend to have limited bargaining power for personal time management. Knowledge use systems which organize for symmetric compensation, allow personal time value to become a functional consideration in decision making for skill supply. Via this method, time arbitrage becomes an integral supply side tool, for services generation and mutual coordination.

Some of the confusion about finance as wealth generation, stems from the notion of money as actual wealth. Nevertheless, Adam Smith and many others have emphasized money as merely a representative tool, of the real economy wealth already taking place. While money is the nominal measure of all economic activity, its most vital role is economic stability, in a faithful mirroring of the aggregate spending capacity which occurs along an economic continuum.

Only consider that when central bankers fail to represent real economy circumstance "on the ground", production losses can ensue which aren't readily recouped in the short run, or possibly longer. Perhaps it's the fact monetary policy is fully capable of destroying real economy growth, which sometimes lead to the confusion that money somehow creates growth - independent of real economy circumstance.

Money's representative role is not the only confusion, in terms of wealth creation. Indeed, there were times when it was easy to confuse finance with wealth creation, since broad gains in scale have correlated with a wide range of financial innovations, for centuries. The growth "potential" of fiscal policy, has been caught up in some of these same resource realignment - versus resource multiplication - strategies. And today, many financial tools are not utilized so much for real economy growth, as for holding patterns in already existing wealth. As many earlier gains in scale have moderated, so too the ability of finance, to assist real economy wealth creation functions.

Time arbitrage could help to restore the kinds of long term growth which benefit from incremental time use gains, among populations as a whole. Time value as a supply side function, could eventually contribute to total factor productivity, for it encourages new services generation which does not make demands on the revenue of other productive enterprise. Indeed, today's governments have a limited ability to achieve growth through tax reductions, since so much important economic activity includes budgets in need of those very taxes. In other words, too much knowledge use in the marketplace, remains dependent on the very government revenue, which citizens have become increasingly reluctant, to provide.

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