Saturday, July 15, 2017

Knowledge Enclosure as Limits to Growth

The land enclosures which took place centuries earlier, posed hardships for many, who faced the challenges of generating new livelihoods elsewhere. Yet fortunately, this form of enclosure led to long term economic benefits. Ownership of property, made it reasonable for individuals to commit to better production methods, which gradually increased total output. The result? A dynamic marketplace, which includes a rising global standard of living that continues to this day. Why, then, hasn't the more recent enclosure of knowledge, provided similar benefits?

When knowledge is utilized in the context of a specific individual's time, that unit of time cannot be multiplied. In recent decades, time based services have partially supplanted forms of economic activity which were capable of higher output levels. Initially, the artificial knowledge scarcities involved in this process, weren't so problematic. Many institutional claims for time based knowledge use went unnoticed, since populations had numerous opportunities to produce other goods and commodities. As the marketplace continued to expand and diversify, automation in one sector would eventually lead to new opportunities in other areas.

Yet automation could have different results this time. Even as many individuals continue to prepare for what is essentially knowledge based work, much of what currently exists in this regard, is not structured to benefit from the full inclusion of human capital. In recent years, these limits are finally making themselves known. As people begin to question the benefits of formal education, one can't help but wonder: Will we end up with a future, where millions are born, only to discover there's little if any room for the contributions they seek to provide?

Decades earlier, when tradable sector activity was still dominant, staying connected mostly meant being willing to relocate and start over, when necessary. Access to work today is a more complicated matter. The knowledge enclosure of today's time based services, means years of personal commitment and sacrifice, before one can even help anyone for the first time, on economic terms. Consequently, the marketplace for time based services, is not as extensive as commonly assumed, given its costs.

Revenue dependence contributes to the problems of non tradable sectors which rely on knowledge enclosure. Whereas much of tradable sector innovation accrues to customers, healthcare's revenue dependence may translate into innovation which doesn't reduce costs or increase output. Often, tradable sector activity can centralize, yet maintain marketplace output. But when healthcare providers centralize so as to reduce costs, the result is less time based product, which means fewer opportunities for knowledge use to respond to specific circumstance. While centralization is a understandable response to budgetary pressures, ultimately this approach leave societies less able to utilize knowledge effectively.

Restrictions on the use of knowledge, can't be lightly dismissed. We shouldn't wait too long, before taking new approaches to improve the organizational capacity for knowledge based wealth. Already, asset formation and human capital investments have suffered, as many cities and communities lose the productive agglomeration which has become a 21st century requirement. Granted, no one should expect today's knowledge providers to abandon their present day organizational structure. Still these individuals need to reach out to the people and places that are falling behind, so that knowledge use might be better harnessed for the wealth of the future.

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