Keep Time Use Commensurate With Money

What is it that makes our time use important, in monetary terms? The actual limitations and capacities of time use seem so basic, that one would think such a logical consideration would be part of any monetary policy in the present. After all, many individuals in society are now expected to carry their own weight in economic terms, as they go through the course of their lives. In recent decades we've increasingly accepted and even welcomed that role. What's more, in terms of societal expectations of the developed world, the reality of total economic participation is practically a cultural "given" which - with a little luck - will eventually play a greater role in legal definitions as well.

However, the reality of (expected) total economic participation in monetary terms still "feels" new, which could explain the reluctance of policymakers and central bankers to come to terms with its true significance. Certainly it explains the knee jerk response in the U.S. of throwing entirely too many people into prison, instead of seeking out more rational economic environments for them to survive in. That very "newness" of expected economic participation may lie behind some of the confusions surrounding representative anchors for money in the present. It is particularly unsettling to see how nominal targeting could assist economic stability, and yet know that policymakers at the highest levels remain adamantly opposed to the value of our own time use as an anchor for monetary policy.

Prior to the 20th century, only a small portion of individuals in society were expected to be responsible for both oneself and family, in what we would consider today's economic terms. Certainly, the limitations of gold standards made sense, when it was primarily governments and wealthy citizens doing the majority of the buying and recorded economic activity. Even the reality of income tax is but 100 years old in the U.S., and our government did not really discourage citizens from utilizing barter or other non monetary forms of sustenance until after the system was put into place.

While there were certainly no 100 year celebrations in 2013, the income tax was nonetheless an acknowledgement of the growing importance of every citizen in economic life. It would seem we all "got the memo" in the 20th century, and agreed with government that our time and skills were really starting to matter, in monetary terms. And every time central bankers considered our time use and its incremental value in nominal targeting, it appeared as though governments might actually keep what appeared as though a reciprocal monetary promise with their citizens. After all, the economic use of our time was the most reliable indicator for economic stability, of all the resource options available. More people than ever were starting to agree: time is money.

Even so, not everyone has been sold on the idea of our ability to participate in the economy as the "new" gold standard. How does anyone know if jobs remain available? What's more - so the reasoning goes - there's more money and gain to be had "at the top", for the not so incremental requirements of both higher education and "bigger is better" definitions for environment use. For one thing, the incremental nature of what our time can actually accomplish is too transparent, too indicative of where rational thought and action might lead, for some who gain from hijacking the value of our future time for their own ends.

People in power have multiple reasons for their desire to keep credit appropriations and balance sheets as primary - even going so far as to insist they belong in definitions of macroeconomics - which is certainly not the case. Alongside the bastions of credit and finance, go the unnecessary coercions of living and knowledge use standards, for those who can ill afford or scarcely need today's superflous signals of "wealth" with their actual incomes.

Because governments refuse almost all innovation and efficiencies in building and construction requirements, a hidden feudal system exists for lower to middle classes such as what once existed in the Old World, and is slowly destroying the middle classes as it continues. For the lower classes it is apparently not enough to work all day, as they also have to take on additional jobs just to be able to live in housing as it has been mandated as necessary for all, by government. One's time is increasingly given over to the mortgages and rents which are a prime means of governments everywhere for their own wealth appropriations. Landlords - for all the blame they get - are but a foil for the real "action".

As long as monetary policy is thought of primarily in credit based terms, and wealth in terms of inefficient housing, the time to money link which is so vital for economic prosperity, will struggle to materialize in a rules based sense. Even though nominal targeting corresponded with other policy instruments in the years of the Great Moderation, in retrospect it may not have even happened for the right reasons in terms of monetary stability. We are in danger of governments continuing to turn their backs on the time to money perspective they once encouraged in the 20th century, as knowledge and skills use continue to be pared back for budgetary balance.

Why so? Because in the last 100 years of income taxes, the things people used to do that provided value outside of monetary terms no longer exist as true possibilities. Even though some may think of farmland as a "hedge" for the future, the idea is silly in any aggregate sense. The family farm, for the bulk of populations, is no longer a true option short of complete breakdown of monetary systems - which a Market Monetarist such as myself seeks to avoid in any circumstance. We cannot afford for governments to give up on the skills of their populations at the very historical moment when populations have never been so dependent on said skills for their very survival.

By the same token, women cannot just automatically resume the homemaker role as in past days, in that many of the jobs of the 21st century demand two incomes for housing, especially as it is presently defined by governments. Or, if someone needs to stay home because there's not enough jobs, then allow innovative thus affordable housing, for Pete's sake. More realistically - and more ominously - the continued call of the left for "living" wages is a pipe dream in terms of real government objectives, which in the present are all about capping off inflation so that it doesn't "froth" or "bubble" too much!

The real issues for our economic futures go well beyond the realm of politics, which is now mostly about fighting over the pie of static wealth that governments and their financial advisors have already envisioned. We know why monetary ideas evolved away from the use of the gold standard in the 20th century, for as populations became more involved in the economic life of nations, fiat money became ever more important for their actual representation. What perhaps was not so obvious? The degree to which finance and credit use, with tight definitions of wealth all around, could completely hijack the entire process.

Governments in particular need to let up with the silly staged hissy fits every time finance "gets out of control". Just allow affordable living and working conditions so that people don't invariably have to rely on credit use in the first place. What's more, if governments would get real about their special relationship with finance instead of pretending it's some kind of monster when the *** hits the fan... people might actually start to believe - once again - that it pays to be responsible in life...that it pays to be accountable and trustworthy.

If we can only convince our governments to keep time use commensurate with the true capacity of money, the mysteries of the "disappearing" middle class will finally be a thing of the past. And - by so doing - a thousand other confusions can also be laid to rest.