Friday, January 23, 2015

The Knowledge Problem in Time Use Context

A recent post from Nathan Snow, "The Raving Bully Model of Property", is a good rebuttal to Matt Bruenig's insistence that property is theft. The "property as theft" assertion on Bruenig's part, is one that readers may also remember from several Scott Sumner posts. Nathan Snow frames his thoughts in a way that will be familiar to those influenced by Hayek's arguments.

In many respects I agree with Hayek's interpretations of knowledge use applicability. Given the chance, individuals and groups alike will instinctively assign merit to those who clearly deserve it. Even so, merit has become too narrowly defined, within price contexts which have gradually demonetized the value of time aggregates. Too many aspects of services organization are unnecessarily centralized and hierarchical. This leaves little room, for folk to determine value for the kinds of abilities which others in their midst would like to put to use.

Worse, no local marketplace currently exists - at least in the U.S. - which would allow greater diversity in time use. If knowledge use is the most important property of the present, why isn't it more widely distributed and recognized? Something about the way Nathan sums up his post makes me feel I owe my readers a couple of explanations, regarding my present stance on knowledge use. Here's Nathan Snow:
Bruenig is wrong about property. Workers are not atomistically interchangeable. We have specific talents. The only way to get rich, apart from political abuse, is by making other people better off. The right way to deal with injustice is not by overturning the whole system. Rather, the right approach is to work under the system, to subvert it, to be an agent of grace and mercy. Be the exogenous shock you want to see in the world, stop blaming other people. Yeah they are wicked, but so am I, if I'm honest with myself.
The knowledge problem exists at a basic level of economic coordination. As a result, critical differences in outcome have been missed, regarding knowledge use strategies for tradable and non tradable goods. How so? High value skill sets pay off best when product is mass produced at optimal levels. When a given product exists separately from its initial (high value) time use input, product costs can be lowered to an extent they become quite competitive. This form of production has been more responsible than any other, for improvements in the standard of living.

Unfortunately when time use is built into the actual product - as is the case with services - everything changes. Even though aptitude for the task at hand is a tremendous plus, skills value in this instance may not scale for further profit or otherwise add efficiency. While it is possible to achieve desired institutional services goals through automation, sometimes the human component is lost in the process. Already, automation is beginning to limit what were once considered normal social functions and responses. In some instances, the ability to relate to others in everyday (economic and social) environments may now need to be learned in new ways.

Hence when time use is a part of each intended product, the desire for strict allocation of (perceived) "one size fits all" merit begins to break down. Governments have made the mistake of assigning merit to knowledge use positions which cannot possibly fulfill the roles they currently attempt to provide. Unlike tradable goods which only need to be produced in relatively few environments with relatively little labor, services product is needed in all local environments, and not just the most prosperous regions of the present.

Some readers are likely wondering about the times I've mentioned skills sets as interchangeable components for local knowledge use systems. How to think about Nathan Snows' comment in this regard? "Just in time" knowledge is already affecting the long education trajectory which has been expected for knowledge use work. In some instances, educational investments can go quickly out of date, which suggests that broader knowledge sharing across disciplines as a good way to adapt.

Also, interchangeable skills makes it possible for local citizens to work in combined capacities which would otherwise not be possible. Much of the merit decisions of the twentieth century involved environments where individuals were brought together from geographically diverse areas. A similar process needs to develop for work environments in which individuals are already living and working in close proximity to one another.

Sure, some interchangeability within local systems would involve compromise and - at times - even sacrifice. But important to all this is the fact many time choices can remain both personal and meaningful. The most important criteria for knowledge use systems is that time management - and choice sets - are endogenously driven. No one need be "interchangeable" according to someone else's definition, but by their own means within the frameworks of community activity that is possible. Anyone who has worked in areas not densely populated, knows that one's work responsibilities are often more varied, because repetitious functions are not needed as frequently.

Strictly speaking, productivity and efficiency could be best achieved in cities. But this dehumanizes too much of the human experience which needs to remain economic. No one minds the occasional trip away from home for occasional goods, which have themselves come from other regions and parts of the world. But it is unreasonable, to expect important services time to always be carried out in regions other than where one lives. This is particularly true, given the fact that digital capacity could quickly adapt for this purpose.

Ultimately, for skills value as linked to tradable goods production, the system isn't broken at all - in spite of recent uncertainty given world trade. As Nathan Snow indicated, the system needs to be transformed, not overturned. Too much protectionism among nations exists because of unresolved issues for knowledge related time use. In a sense, the only part of the system which truly needs change, is that part which remains to be built.

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