Too many needed services are held back today because of supposed "austerity" circumstance, in spite of the fact that service formations represent great potential for economic growth. While some growth potential remains missing because of slowdowns in traditional production, gains in services formation would eventually expand the marketplace for manufactures and commodities formations as well. After all, it is difficult for citizens to fully participate in the marketplace when services access remains limited.
New services generation could be defined either as nontraditional or alternative production, should services be created so as not to generate further debt or societal obligation. In effect, these services would become a valid part of the supply side structure, in that they would not incur hidden societal obligations. Whereas traditional high value service formation often relies on proceeds from traditional production and international monetary flows, in order to take place.
As to the latter, the growth they generate is more interdependent, than would be necessary with nontraditional services production. While further growth would be a benefit of alternative services formation, services and production would not be "joined at the hip" in growth based terms. That would make it easier to accommodate supply side shocks as well - whether "good" or "bad" - because time use would become relatively more important than other resources which define environment.
How could services formation exist more independently of production? The fact that services become self supporting, would mean that production can move at different levels without completely upsetting transmission structures. The prime example in this regard are the ways in which assets are used to provide services flows. If asset structures are not completely bound to these roles, that in turn frees asset structures to more closely approximate what people want them to be.
The best part? Asset formation can in turn be readily subjected to highly productive (i.e. good deflation) innovations which would otherwise be held back both by special interests and services needs. If communities can generate services wealth directly, their infrastructure, asset and building component options immediately become more flexible. What's more, internally defined coordination patterns makes it far easier to accommodate higher population densities in a small core.
Consider the normal travails of declining production in recessionary times. In a larger sense, production aggregates should be increased because people find real gains in doing so, instead of being compelled to do so (i.e. maintain production) for needed services formations. By the same token: with fully developed time arbitrage, production levels could be relatively low (in given settings) without undue harm.
That would be possible, because of good deflation measures in currently existing assets and building formations for both living and working environments. Some individuals would choose to work less because lower cost living accommodations would not require a full work week. Or, they could opt for work which does not provide monetary compensation in a normal sense.
Presently, the entangled nature of traditional production and services, is part of the reason why governments struggle to make up for lost economic activity in recessionary periods. After all, governments are dependent on the proceeds of traditional production (which falters in recession) in order to generate the limited quantity of services which production aggregates provide. This also has bearing as to why a low interest rate doesn't imply government gains in borrowing for infrastructure provisions. Monetizing service formations - hence "setting them free" from production restraints, could assist governments in overcoming this fiscal recessionary quagmire.
Regular readers know that I use the term "monetized" in a specific sense: as compensation for local organized services formation and access, in coordinated time aggregates. Much of the austerity which limits work formations is arbitrary in nature, because of how services have been defined. What's more, some services are overemphasized because of legal and structural issues, even as service formation for the public as a whole continues to languish. Too much services access is also limited by hard credentialing* processes.
High skill knowledge use of the present is more often monetized (not backed by government redistribution), when it exists to serve middle to upper range incomes. Growth in this area became evident - for instance in the nineties - when legal offices emerged in central locations which were previously zoned for residential use. Commercial retail areas in that time frame were also increasingly replaced by tax preparation offices and the like. In more recent decades, what once would have been retail areas was instead given over to large freestanding structures for specialized medicine. However, these marketplaces cater more to a given portion of the income spectrum, than the marketplaces of the earlier twentieth century.
A lack of desirable or productive services formation is all the more problematic, given the fact that many with degrees also end up accepting work which exists below their skills capacity. Some of this, however, is due to higher education as an all too easy source of wealth capture. Again, the primary problem for education in the present has become its isolation from actual marketplace conditions. One result is a now inadequate services marketplace, for knowledge use engagement.
So long as many vital services exist mostly in a fiscal capacity, they will continue to be limited in relative terms. In a sense, one could think of fiscally provided services as existing in half the capacity that might otherwise be possible. Not only is their fiscal nature indirect in terms of job formation: it also involves a debt formation process which means the service is paid for not once, but at least twice. In some instances, perhaps half of the population is employed than might otherwise be possible.
Time arbitrage would not only monetize new services formations, it would make them possible in areas lacking in economic complexity. Furthermore, time arbitrage could alleviate the burden of sticky wages which contributes to unemployment. By compensating time use as anchored to local asset and production formation, citizens gain a better idea what compensation is actually possible. While these forms of employment are more self directed than traditional employment, the fact that locals support the inherent safety net structure is what provides work security, rather than job security. Much as individuals once tended gardens well after retirement, individuals would tend their local gardens of economic connections, well after more strenuous forms of work have been set aside.
The fact that production aggregates have been held back because of limits to marketplace access in general, is what makes it difficult to determine what a long term growth trajectory might actually consist of. Once populations achieve better balance in terms of asset formation and services structures, it will become easier to determine what future possibilities could be.
Monetizing services would also provide greater opportunities for returning time use aggregates to a central role in the economy. Not only would this be a tremendous plus for measurement in terms of a nominal level target, but it would also make economies more resistant to the dutch disease which can be problematic when nations become too reliant on commodities instead of individual input. Presently, many still view production as more important than individual participation, but any continued focus with this mindset only generates further economic imbalance in the long run.
I could easily continue, for the question posed by this post title is quite general in nature! Monetizing services could go a long way to establish normalcy, even though it would be a slow process which occurs mostly at the margins of primary equilibrium. Indeed, that is a good thing, because inevitable mistakes would be small scale. Plus local "victories" would present potential knowledge and land use patterns that populations might dare to undertake, if the risks of doing so are better understood.
*Hard credentialing is a major contributor to wage stickiness - hence a lack of overall work availability and knowledge dispersal in services formations. Soft credentialing would allow local populations to credential based on voluntary project and skills proposals, alongside ongoing negotiation for services needs.
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