Sunday, September 18, 2016

Knowledge Use Limits in a "Predictable Outcomes" Context

Among the more difficult aspects of economic stagnation, is that centralized structure can mean unexpected limits for knowledge use. So, too, the ability of societies to provide asymmetric compensation for a wide range of (massively investment backed) skills capacity. Asymmetric compensation in this context is either that of private institutional discretionary revenue, or government redistribution, to monetarily reward skills capacity.

Yet in today's world, for many individuals it no longer appears rational, to perform research or take on intellectual challenges, if no public or private rewards appear to be in the offing. In particular, more than just a dearth of monetary opportunity for specific skills sets is involved, because social connections also tend to be missing - if and when one is not (already) gainfully employed.

Consequently, many individuals are unable to (productively) engage in ongoing societal concerns, if a series of degrees is not a part of one's background (clearly this problem has not stopped a lot of unproductive engagement). One almost has to wonder, in spite of plenty of historical evidence to the contrary: how was it ever possible, for individuals to pursue intellectual challenges alongside others, through means other than higher education?

This is an important issue, since the present framework of institutional structure now places real limits, on the personal challenges that can be met by society on well compensated economic terms. While degrees are needed to participate in important aspects of present day realities, there will only be so much economic room - in spite of the extensive investment required - to assure inclusion on these terms.

Even more problematic, is that a higher degree of asymmetric compensation is being usurped by a wide array of crisis circumstance which crowd out ongoing maintenance functions. While this may simply present another cost factor for private enterprise, more is at stake for governmental budgets. What is not already committed to entitlement requirements, is increasingly expected to respond to systemic breakdown along the margins.

In light of this, governmental budgetary management includes a factor equally important to GDP correlation: how much revenue potential exists on discretionary terms? What purpose in demanding more taxation, if and when taxation can no longer respond to present economic circumstance? It is certainly difficult to assume the potential of fiscal measures for recessionary times, when discretionary revenue is overcome by both existing obligations and emergency funding needs.

Here, it helps to note how authoritarian regimes gain a certain degree of economic origin for their rationale. Should budgets lose room to provide funding for daily economic needs (that aren't entitlement or crisis driven), ironclad rules and automated procedures begin to substitute for knowledge use discretion and asymmetric compensation. While rules and greater automation are sometimes appropriate (depending on the purpose of discretion), there are also times when they substitute for better suited responses which include both compassion and human logic. It always helps to define: what is the lever, and to who does it apply, that discretion may serve.

"Predictable outcomes" via rules and regulations are - in part - a response to both public and private budget demands. But when do "predictable outcomes" also reduce our economic freedom? This is important not just in terms of authoritarian tendencies and more laws, but also automation as a response to every budget problem. Only remember that governments are not necessarily alone in their inclinations to reduce economic freedom, especially if private interests attempt to dismantle government processes without sufficient consideration of the knowledge use which could be lost.

Important though asymmetric compensation has been, and the knowledge use associated with what has been a useful economic tool, remember: monetary compensation and knowledge use mostly exist in a "permission only" format. What is sometimes missed by hard liners and inflation nutters, is that even the first mover position of tradable sectors is affected by this reality. Today, the permission of government to effectively operate on a wide societal scale is being challenged, as much of its existing revenue becomes bogged down in prior obligations.

Among the many reasons I suggest organizational capacity in the form of symmetric compensation: people would not have to constantly "ask permission" of authority figures, so as to get things done and respond to life's challenges. The "burden" of equally compensated time value for daily, useful knowledge application, seems small indeed, if it means regaining the ability to steer the ship of humanity.

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