Notes on Time Value as a Commodity Market

Time value is one of those rare economic resources, which has yet to be well defined at an aggregate level. However, a marketplace for time value could eventually provide a better understanding of time potential, via its commodification. Even though today's corporations only utilize partial time value, a new form of corporate structure could be designed to function so as to harvest full time value potential, on meaningful terms for the individuals involved.

Of course, this form of commodification would need to be distinguished from a somewhat different partial accounting, which emphasizes what are far more specific sets of skills in the marketplace. In other words, what today's institutions presently ask for, is but a fraction of the skills potential which individuals could likely appreciate from one another. From Wikipedia:

Commodification is the transformation of goods, services, ideas, and not least, people into commodities or objects of trade. A commodity at its most basic...is "anything intended for exchange," or any object of economic value. People are commodified - turned into objects - when working by selling their labor on the market to an employer....Commodification is often criticized on the grounds that some things ought not be treated as commodities - for example education, data and knowledge in the digital age.

Let's consider this explanation. Do people really become "objects" when they sell their labor? Whether or not someone agrees with what is essentially a subjective interpretation, could depend on the nature of the work at hand, the degree of control one has in any given setting, and one's desire to hold on to a particular work opportunity.

On the other hand, commodification of education, data and knowledge has actually become a necessity, to the extent these components provide sufficient (profit originated) income for all concerned. This is the nature of asymmetric compensation, when individuals are compensated via discretionary income and government redistribution. While it is certainly possible to generate working environments where education and knowledge need not be commodified to this same extent, more direct means for wealth generation need to be in place, in order to do so.

Regular readers may already recognize such a possibility, as symmetric compensation. Symmetric compensation would allow time value (arbitrage) to become commodified or prioritized as value in exchange, albeit in local value in use settings. In these settings, specialized knowledge sets and specific educational components would not have to be the primary limiting factors, for productive activity to take place. In knowledge use systems, time value could serve as a specific commodity market - one which would function simultaneously as monetary units and measures of time/resource value. While the monetary value provides a given constant, the time to resource value would always vary.

Granted, some don't understand why I advocate time value as a commodity. Doesn't that "cheapen" time value? Oddly enough that is precisely the point. When time value is held dear, knowledge use, data and education have little choice but commodification, so as to meet the costs of labor expectations. Presently, not only is it difficult to trade one's time value in the marketplace, it is also becoming more difficult to gain access to the time value of others. Further, when governments attempt to amend this situation, they too often do so in ways which don't take existing supply limitations into account. As a result, more money (in the form of redistribution) "chases" an already limited supply, which only adds to the initial problem of access.

It does not help that some reactions towards commodification, can also be too general in nature - even on the part of economists. Of commodification and his concerns about the temporary settings of a gig economy, Branko Milanovic recently wrote:

The problem with this kind of commodification and flexibilization is that it undermines human relations and trust that are needed for the smooth functioning of an economy.

Diane Coyle responded to his post, and while she agreed with the above sentiment, she challenged his questioning of the commodification of what had once been domestic activities in the home:

While I absolutely agree that there ought to be limits to what resources are allocated by markets as opposed to other means, Branko lost me in this early paragraph. "The most obvious case is commodification of activities that used to be conducted within the extended families and then, as we became richer and more individualistic within nuclear families. Cooking has become outsourced and families do not eat meals together. Cleaning and child rearing have become more commercialized than ever before."

The trend towards buying 'domestic' services outside the home dates back decades now, linked to urbanization and women's participation in the paid workforce. The switch from home cooking to 'outsourced' meals, and similar market activities, has saved women millions of hours of labor in the home. I'm all for it.

Indeed, one of the social advantages in general of a switch toward markets (or 'commodification') is precisely the anonymity of the market as compared with the personal (patriarchal) power relations involved in from home production and household/village economic activity. 

Like Diane Coyle, I find the economic freedom aspect of commodification extremely important, especially for anyone who presently lacks economic access. Meanwhile, we are hardly at a point of true economic possibility, so long as time value is not recognized as valuable production potential in its own right.

A marketplace for time value would provide new horizons for voluntary economic engagement. Time value as a central anchor for service capacity, would allow more flexible settings for knowledge, skills and data, than what is now possible. By measuring aggregate time value - instead of always having to make random (disaggregated) judgement calls regarding skills capacity, skill sets and knowledge gains can occur within continuous and measurable timelines. This is important, since there are few benchmarks by which to measure services productivity in relation to tangible commodities.

Also consider time value as a given potential, depending on the years one may actually live. It has proven difficult in part to put a monetary value on life, because only a portion of aggregate time value is accounted for monetarily on general equilibrium terms. For instance, time value potential particularly matters, when considering whether to go into debt for what could be a lifesaving surgery. Indeed, such a decision will depend on whether one has already had previous major surgeries, along with the success rates of surgeries on the part of one's family and friends.

By incorporating time value into mutually desired services, lower income levels could eventually realize gains in life expectancy, much as has already occurred for higher income levels. By far the best way for low income levels not to impose on the existing resource capacity of today's general equilibrium, is to generate additional wealth capacity within a low income spectrum, in the form of valuable skills sets and local asset formation.

As a commodity market, units of time would gain a common monetary value in the form of a commodity price - one which would hold across other knowledge use system capacity within a given nation. With this price as the primary constant, local quality of life adjustments in asset and skill formation can readily be ascertained, since aggregate time units become a base measure for productivity gains over time.

For building components, it helps to remember that many quality of life adjustments come in the form of innovation that minimizes the need for constant maintenance and expensive replacement costs. While these structural innovations would reduce basic housing costs, they would particularly reduce overhead costs and risks for local business formation.

Hence while time value for knowledge use systems would held constant in monetary terms, other resource and time value capacity would vary - initially and over time. Different equilibrium corporate structures would generates varying sets of resource capacity, which would also reflect the level of innovation they are able to tap, both through internal means (local invention) and external sources. By making time value a given commodity value on monetary terms, knowledge use systems would be able to generate structural reform which would eventually contribute to productivity gains as well.