Tuesday, June 6, 2017

Time Value as an Alternate Equilibrium Lever

In the economic conditions of general equilibrium, time based product lacks the economic leverage, which local group management could otherwise provide for service creation. Presently, personal time preferences are not a marketplace consideration. In other words, time - the one resource we all share via the same provision - still lacks the economic representation, which would allow it to contribute to aggregate skills preferences.

When skills are not coordinated within an understandable time continuum, skills product cannot be readily stored for either current or future use. Since would-be providers don't know the actual time product preferences of would-be consumers, considerable skill potential and human capital investment slips away. If time value were a valid marketplace construct, perhaps it could be considered a power law form of leverage. As Shane Parrish (of Farnam Street) writes:
A power law is a relationship between two things when a change in one can lead to a large change in the other, regardless of the initial quantities. In the case of leverage, a power law relationship exists between the effort exerted on the lever (actual or metaphorical) and the outcome.
Notice his emphasis on quantities, which in this instance applies to both skill and knowledge. Plus, consider how much easier it can be to measure the time context for skill and knowledge use, than to measure the actual skill or knowledge which is applied to individual circumstance. Parrish also highlights the book "Decision Making", in which Alan C. McLucas discusses the importance of leverage:
Leverage is built on the notion that small, well-focused actions can sometimes produce significant, enduring improvements if they are applied in the right place. Tackling a difficult problem is often a matter of seeing where the leverage lies.
...a leverage point is where a small difference can make a large difference. Leverage points provide kernel ideas and procedures for formulating solutions. Identifying leverage points helps us create new courses of action...
With time preference as a lever, knowledge use and skills capacity could coalesce around a common supply and demand structure for time based product. When time coordination is applied in a continuum to both human capital investment and output measure, it becomes possible to manage services creation, so as to mimic the internal wealth creation processes of tradable sector production. Even though time based product can only be "stored" for the future to the degree that participants are simultaneously available, the system works to make these possibilities a greater likelihood, than is the case when time based product is approached via the external coordination of general equlibrium.

The ways in which we wish to apply our economic time with others, are just as important as what we ultimately apply our time to provide on their behalf. We gain personal leverage, for instance, when we mutually coordinate for both leisure time and what we know to be our most productive moments of the day. By allowing individual and group time preferences to act in concert, as a lever for skills actualization, we gain more productive means to manage skill capacity. Indeed, far too much skills capacity has been lost, given the limited human capital investment which is actually tapped by today's institutions.

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