Regular readers already know what I believe to be missing from the marketplace: time value. I'm convinced that it's crucial, for individuals to have a functioning marketplace for the time they actually have, to meet their own personal obligations. Too many markets are constructed, so as to make it impossible for individuals with limited income to use their time effectively. When free market defenders dismiss those with additional burdens, and neglect to explore proactive alternatives for the crony capitalism which causes these problems, free market defenders ultimately risk the demise of the markets they celebrate. If and when people lose the ability to freely exchange with one another, some are going to lose faith in the process.
Time is the one resource we all have, which naturally functions as an exchange behavior: whether through our physical abilities, our skills, or both. Yet time value has been subtracted from economic exchange in too many instances. We need the full approximation of our time to build and maintain our environments and seek exchange with others - particularly when monetary representation is limited, due to general equilibrium constraints.
As to the ongoing reality of exchange as a human trait, and in response to an article which highlighted Adam Smith, Gavin Kennedy writes:
In short, exchange behaviors are not unique to a 'capitalist economy', nor specifically only to markets. Smith notes that the 'exchange propensity' functioned long before capitalism...
The notion that a "capitalist economy works efficiently to determine what people really want as opposed to what they say they want" is pure fantasy. That capitalism can be more efficient than non-capitalist and pre-capitalist economies is broadly true; that they are always faultless is less certain...
Free markets do not, and arguably never have, operated in the real world. Smith understood this and indeed makes many references to the behaviour of 'merchants and manufacturers' who in his day (and still in ours) colluded with each other and with governments to introduce the very same 'peverse effects'...No one who feels strongly about a dynamic marketplace should be resting on their laurels now, especially as attacks from the left become more insistent in the Trump era. What's unsettling about this latest round, are the numerous historical examples when (spreading) lost faith in markets, ultimately meant lost national dynamism. Lest policy makers and pundits in the U.S. imagine themselves "immune" to this problem, why even take a chance on misplaced confidence becoming the "pride before the fall"? If no one is willing to pursue measures which can finally generate dynamic non tradable sectors, we may all be in for a bumpy ride, in the foreseeable future.
Time value has often been a crucial economic element, when populations didn't have sufficient money at their disposal for the local markets which are now referred to as non tradable sector activity. If funds were limited, people built dwellings through their own stamina and natural resources, and coordinated their time to realize mutually desired ends. The progress of the last century has fooled us to some extent, in assuming no one needs to rely on neighbors anymore for economic purposes. While these assumptions may hold true for higher income levels, lower income levels have not only lost the resource patterns of the past, but are quickly losing access to the expected patterns of the present, as well.
Because of this circumstance, I've promoted a new institutional construct, which - since it would generate an alternative equilibrium for local non tradable sector activity - could be referred to as an equilibrium corporation. Via alternative equilibrium for non tradable sector activity, people could more closely anchor the use of their time to the requirements of their local environments. The equilibrium corporation would be designed to preserve pathways for economic freedom - at least to the extent it is possible, given the natural constraints of time and resource capacity.
Every nation needs to make certain they don't lose the capacity of their citizens with limited incomes. Granted: it's okay if higher income levels don't want mass produced lightweight building components for living and working, especially if these components would reduce local property values. But it's not okay that lower income levels don't have these options, and equilibrium corporations would make building components central to an asset creation role which combines tradable and non tradable sector functions.
Only remember that when political leaders ignore the circumstance of their own citizens, even the strongest economies can falter. Adam Smith also knew, how the possibilities of falling backward were always there, even when nations were experiencing tremendous economic progress. "The Wealth of Nations" was understandably viewed as a celebration of prosperity. Still, this important work held warnings which are still important, centuries after he penned them. If policy makers do not stand behind strong economic pathways that allow freedom of choice, the intentions which do win the day, could be the ones which make freedom a forgotten memory.