One way to think about changing governmental resource capacity over time, is to consider how sectoral output - or the lack thereof - influences aggregate output and redistribution. By way of example, today's non tradable sector dominance - given its effects on limited output capacity at a general equilibrium level, contributes to the lack of broad based wage hikes for the average worker in the near future.
Historically, the tradable sector wealth of recent centuries made it possible for governments to centralize economies to a significant degree. However, as more tangible forms of goods production have been partially displaced by non tradable sectors, less wealth creation is now possible through centralized means. Only consider how political uncertainty re economic stability has led to problems for democratic institutions in general. In order to maintain prosperity, today's governments need to come to terms with the striking differences in how tradable and non tradable sector output, affects revenue flows and economic outcomes.
In particular, governments won't be able to rely solely on tradable sector wealth, to back the budgetary responsibilities of future non tradable sector activity. It's the non tradable sector activity which is connected to time and place, that needs internal resource reciprocity so as to generate wealth directly. If these vital activities are to function as a general equilibrium anchor capable of generating growth, their resource reciprocity will have to more closely resemble the tangible output of tradable sectors. Otherwise, populations may become increasingly reluctant to believe in the use and preservation of knowledge, as sources of prosperity and employment.
Tradable sector activity thrives best when it is encouraged at global levels. Nevertheless, this global activity is being threatened, as governments miss important signals re the need for local economic participation in non tradable sectors. Too many national leaders are also questioning the wisdom of continued technological innovations, as they mistakenly attempt to return to a recent past which simply can't be regained.
Non tradable sector activity will need decentralized coordination at local levels, in order to provide broader marketplace potential and opportunity. Even so, growth in non tradable sector activity could be difficult, if global tradable sector activity is not maintained by national governments as a reliable general equilibrium anchor for stable economies.
What about the tradable sector activity which takes place in decentralized settings? Even though this activity would also contribute to local wealth, it needs to remain as open to global settings as possible. Local to global connections are important for tangible goods and services, and it is especially ill advised to bind tradable sector wealth creation to specific time or place.
Tangible goods are not only capable of exponential output in the right conditions, their taxation - unlike income taxation which creates equilibrium imbalance - is simple and direct. Taxation that takes into consideration the natural scarcities of time and place, suggests what is realistically possible to achieve in terms of revenue flow. What this means for decentralized communities, is that locally generated tradable sectors would remain open to state and national taxation. Even though these settings would be self contained for services and (local) asset generation, they would ensure that tradable sector activities and their tax potential remain porous to the activity of surrounding states and nations.
Even though tradable sector wealth can - via governments - still be diverted to fund knowledge use and preservation up to a point, we are beginning to run into the limits that the price making of time based product can impose on general equilibrium capacity. Much of this professional activity takes place in the guise of "intangible" services. Nevertheless, the lack of ability to measure such activity, not only presents problems for monetary representation, but likely contributes to societal reaction in the form of separate monetary arrangements as well.
Fortunately, it's not necessary for the most important knowledge of our time, to remain solely in the intangible use categories which increasingly encourage citizens to question the validity of GDP. By allowing time arbitrage to function as an economic unit for the use and preservation of knowledge, vital service activities could be quantified in ways which improve the value of GDP as a measure. Knowledge use as a part of tangible product, could ultimately make it easier for populations to embrace knowledge as wealth.