Monday, January 5, 2015

Why a (Monetarily) Compensated Time Use Base?

While answers lie beyond the scope of a single blog post, both social and monetary aspects hold equal importance. Monetary equivalence needs policies which back the possibility of turning identity into economic reality. A marketplace specifically designated for time use, would also restore balance to the production and consumption asymmetry which exacerbated the problems of the Great Recession. This asymmetry remains in the existing output gap, and a less dynamic growth trajectory which continues to deviate from the earlier level trend.

There are also important social reasons for closing this gap, to include more citizens who continue to experience limited economic access. At a personal level, loneliness has become a paramount concern in the developed world. People need better reasons than they currently have, to meet one another - face to face - for economic purposes. Unfortunately, time use value has been negated to such a degree, that many will need to start over from the very beginning.

Too often, a lack of economic access means loneliness. George Monbiot of the Guardian writes about loneliness and notes:
Social isolation is as potent a cause of early death as smoking 15 cigarettes a day.
Life as nasty, brutish...short or long, which is worse? Labor force participation rates began to decline, once the feelgood social replacement of consumption for agricultural production began to run out of steam. Consumerism used to be a lot more fun than it is now. What's more, it was a perfectly understandable coping strategy for people to come together, in lieu of both individual and group production which once served that purpose. Retail provided the common environment through which individuals could still relate to one another.

So it was difficult for baby boomers such as myself to watch that era pass. As Frances Woolley recently wrote, getting more stuff isn't what it used to be. While one might think it shouldn't be so difficult to make the necessary adjustments, this reality constitutes a labor shock nonetheless. Dietz Vollrath notes that some think it's impossible to revive work, in a response to Nouriel Roubini:
For that supply shock to generate no other employment you have to assume that the $15 trillion dollar a year U.S. economy is so rigidly inflexible that it has a definitely fixed set of jobs that can be filled. That's ridiculous.
Ridiculous, yes. But enough rigidity obviously does exist (in services formation particularly) that someone such as Roubini can write a post like that and get away with it! Vollrath also writes:
There is no greater dignity to manufacturing than to providing a service. Cops produce no goods. Nurses produce no goods. Teachers produce no goods.
True, services transactions are not traditional goods and these functions have remained in a secondary role for many reasons. Also, services often involve knowledge use, which can be particularly difficult to quantify as a good. Consequently the marketplace for time aggregates became externally defined, once time use became a smaller factor in production. Now, the marketplace for time use needs to be redefined on its own merits. Doing so - in some instances - could provide a much need assist for services transformation.

Doing so also means rediscovering economic freedom. When individuals have an understandable marketplace for time use to help others, that also means others have viable means to help them. Of course, reversing the earlier process will doubtless involve some stumbles along the way, in part because labor divisions in services are the greatest inflexibility of all.

Some theoretical oddities are also involved. Monetary compensation for time use involves rationale which otherwise wouldn't make sense. Some readers likely want to know: Why would I refuse to back a minimum wage in primary equilibrium, yet advocate a "one price for time" monetary base - of all things?

As Nick Rowe has explained, money is the only asset in every market. Still, money is quite capable of generating a freestanding market in which time is the only asset being utilized. In this instance, money would serve as backing for the existing time of both individual and community, instead of a means to indicate price for skill variance. This allows complete skills interchangeability. The only price for time in this environment is an averaged proportion of current value, for time aggregates in relation to local investment and production structure.

In alternative equilibrium, equal time use means individuals can arbitrage changing priorities in time value, as an option to arbitrage of skills capacity under normal circumstance. Time is the missing element in a marketplace which is able to find prices for most everything else. Only consider how people tend to feel they don't have enough time at their disposal, or else they can't find a way to create value with their time.

There is no mechanism in primary equilibrium, which make it possible to arbitrage time value the same way. What's more, under normal circumstance, economic access is increased when a minimum wage does not exist. That's why I advocate for no minimum wage. But in an alternative equilibrium, an equally compensated time base is what preserves economic access, because all participants can optimize the time at their disposal. In turn this is augmented with local investment as means to build needed wealth.

It helps to remember that the monetary backing which generates a marketplace for time use, is only the first backing. It has the secondary backing of local investment which allows a full expression of choice. Why is this so important? Consider that if compensation for time use were the only backing available, that individuals would still end up with a similar dilemma such as exists in primary equilibrium.

That is, one normally pursues personal growth not so much based on personal preference, but based on what others seek from us. That is what time matching would still compensate: what everyone seeks from one another on time based terms. And what everyone seeks is not necessarily the highest or most valued skills which someone holds, in many circumstance. Equal time value means not needing to worry about that. However, a problem still remains.

What about the times when we need to continue our growth in a form that cannot be presently matched? Under normal economic conditions, those options may be dropped. Local investment pools would provide a form of secondary backing, so that the pursuit of individual challenges (at any age) does not have to rely on other forms of support.

Time use in alternative equilibrium can simplify the "unknowns" in knowledge value. Think of arbitraged time use as individual containers in which knowledge can take different shapes and forms. This is a helpful format, because no knowable timetable exists for the transformation of knowledge value. Innovations may take place based on one's energies, but often they never get the chance. This is why the self - and group - support framework can provide such value.

A time based marketplace does not have to shoulder the burden of unknowable knowledge value. It need not judge given skills as more valuable than others. However, the rationale for this is not so much based on egalitarian reasoning, but simply the ability to remain both flexible and responsive to changing circumstance. In the long run, being able to thrive greatly depends on both.

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