Skills and Time Arbitrage in Liquidity Context

JP Koning has a valid complaint, in that the nature of liquidity can be difficult to pin down. Just as time value does not have its own marketplace, liquidity is resistant to being singled out. Koning likens liquidity to a remora, for it attaches to other goods and assets. As a result, he says, measuring liquidity can be a "pain in the ass"! Here's Koning:

The value of a good, say an apple, is easy to calculate; just look at the market price for apples. Unfortunately, doing the same for liquidity is much more difficult because liquidity lacks its own unique marketplace.

There's an interesting parallel between liquidity relationships, and those which utilize both time and skill value. How to tease apart cause and effect? Even though time - like liquidity - is prized, time value in an aggregate sense has become murky, because skills value is presently tied to a meritocracy framework. As a result, even human capital appears as though diminished to some degree, because of external valuations now in effect. Meritocracy based time compensation can be likened to a source of "captured" liquidity. Even so, meritocracy - like liquidity - is not easy to measure in services systems which cannot take aggregate time values into account.

Koning's post provides a good example, why I gradually moved away from skills arbitrage phrasing in earlier posts, to the use of time arbitrage. After all, it turns out skills arbitrage as a marketplace has already been "claimed". And high skills level arbitrage in particular - instead of being able to respond to evolving marketplace conditions - has become a form of human capital which is mostly useful in limited and specific settings.

However, in spite of so called "guaranteed" liquidity, skills arbitrage relies on what remains a secondary context for growth - the marketplace which is government backed. In other words, the most important settings for knowledge use remain reliant on preexisting forms of wealth. In turn, even nominal income is limited by these fiscal restraints, because merit based knowledge use cannot easily contribute to new wealth formation or readily be dispersed where it is needed most.

Limits on nominal income are limits on aggregate economic participation and services capacity. Think why this matters, in terms of inequality. People of all incomes need access to services, but it is the services marketplace which is already limited. Even if more money were somehow redistributed from the one percent to others, this relatively small amount would not even come close to providing what remains missing from the supply side. The flexible skills coordination of time arbitrage is needed, for long term growth.

Without domestic time based marketplaces, the fixed liquidity value of today's healthcare providers can mean a brain drain for any nation that is disadvantaged in some respect. For instance, approximately 35,000 Greek doctors have emigrated to Germany of late, even as Greece recently restored 15,000 of its other government workers.  In a recent Project Syndicate post, a Ugandan doctor makes a plea for healthcare providers and their nations to remain committed to one another:

There has to be a way to encourage doctors to contribute to their country's health-care system, while offering them an opportunity to achieve their personal and professional goals. 

Unfortunately, some countries are struggling to assist to their healthcare providers on the terms which were once possible. Today, every nation is in need of a broader marketplace for skills capacity. Unlike Koning's liquidity dilemma, it is possible to disentangle skills value from time value. What's more, the process of doing so will not only make it easier to measure productivity, but to maintain vital services creation, as well.