At first glance, time based services don't even appear capable of generating meaningful productivity gains. In contrast with the comparatively exponential output of tradable sectors, time based product is limited to the possibility of contributing to new time based product, one hour at a time. So why bother? Especially since today's time based product, is constructed in ways which are notoriously difficult to measure or understand.
Some would even find this reality, reason enough to replace our personal participation with automation, wherever possible. Before others end up making these decisions on our behalf: Are there better ways for us to conceptualize time based productivity, in relation to the productivity of other economic activity? After all, if we don't reconsider the worth and organizational capacity of time based product, ultimately there may not be enough consumers, for all that recently acquired automated product capacity.
Consider two reasons, why thinking about service based organizational patterns has not been a straightforward process:
First: Even though services contribute to equilibrium flow, they are not organized, so as to recognizably add to its output formation. This is also why Say's Law of markets - given the earlier prevalence of tradable goods, - held more relevance (for defined output gains) than Keyne's interpretation that "everyone's income is someone else's expenditure". In particular, Adam Smith was among the first to note, that time based services are dependent on other revenue. Consequently, time based services output (as currently constructed) is not capable of generating new income streams on direct terms.
Second, and equally important: Time based product is person specific. In other words, this particular product - even though it is not often enough expressed as such - is connected to an individual whose actual time constraints cannot be waved away. While this time constraint factor isn't a problem for institutions which hire individuals based on their skills capacity, it's a problem for marketplaces where the personal attention (time) of individuals is deemed an important product component, by other individuals.
Again: What are standard ways of thinking about potential productivity gains? One approach is to cause the same amount of output to yield a larger output. The other approach, is to produce the same output via less input. For centuries, the first approach was most commonly observed. Yet more recently, developed nations are gradually generating the same amount of output, via less input.
The reason this is a problem, however, is that less input currently means reductions in personal participation, in relation to aggregate output. Which translates into fewer buyers, for roughly a constant amount of output. Unfortunately, central bankers are reflecting this real economy development, as they seldom speak of the importance of nominal income, in relation to aggregate output. In a sense, IOR is little more than a representation of those who currently stand on the sidelines.
Could time arbitrage address the second productivity option, of generating the same output (for time based product) via less input, without further reductions in human participation? One way to do so, which could also preserve the economic participation of millions, is to organize education as a direct component of wealth creating functions.
Even though general equilibrium has formal requirements that consequently make the "education as workplace" approach untenable, this approach could feature in alternate equilibrium scenarios. And while matched time arbitrage units can't "multiply" the time of their unique providers, these units are capable of contributing more units of time overall (due to increasing levels of economic participation), than what presently occurs today, via the Solow Residual. Also, even a single set of matched time, is a recognizable contribution to aggregate output and consequent exchange potential, much as Say described the tradable sector markets he observed, centuries earlier.
Presently, quality gains for time based product, have substituted for quantity in a merit based workplace. Merit based participation has gradually come to require increased levels of input (or personal educational requirements), for the amount of person specific time based output which is possible, in aggregate. These merit based requirements also run counter to traditional production expectations to such an extent, that widespread cultural skirmishes are now taking place, for the knowledge based access which is still possible, given budgetary constraints.
Fortunately, achieving the same output via less input, is also possible without subtracting humanity from the economic equation. Until now, it wasn't necessary to focus on the difficulties of extensive input requirements in relation to outputs, for time based product. As more constituencies question the validity of education, it helps to remember that education is not the problem. After all, the experiential value of education, is one of the most important aspects of being human. Education is - and will continue to be - among the most useful and highly valued products of our era. The challenge is to expand the definition of what education actually consists of, rather than restricting learning processes in the belief that meritocracy - with its associated cultural limits - is the only valid educational approach.
Nonetheless, formal education has become problematic, due in part to special interests which gain from the process of increasing input requirement levels. Alas, everyone's knowledge use requirements have become everyone's burdens, as well. Education could more directly contribute to productivity, when our efforts provide a torch of knowledge which can be passed to others, at the outset. Since our personal efforts would no longer exist in isolation, they would contribute to additional income streams. Time arbitrage moves the criterion of inputs to outputs towards a recognizable outcome - one which provides a continuum, for the dispersal of knowledge based wealth.
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