Wrap Up for September 2017

At the level of general equilibrium, today's urban networks continue to drift towards resource use imbalances. For instance, Kevin Bryan posts on urban stickiness: "...owners of land have used political means to capitalize productivity gains into their existing, tax-advantaged asset."

Is pure-ecommerce the endangered model?

Which rural areas are more conducive to mobility?

A heartfelt call from Brink Lindsey for greater economic inclusion.

Making introductory economics more relevant

One would think that the U.S. is more exposed to international trade, than is actually the case.

Lars Svensson:
Tight monetary policy as intended for financial stability, can lead to a weak economy.

Adam Ozimek talks up "Philadelphia momentum" as worthy of a new Amazon headquarters.

Will blockchain technology make central banking obsolete?

"For every $100 increase on taxes at the poverty line, we saw...a quarter of a percentage point decrease in high school completion."

Russ Roberts: "It feels as if we're in a very dangerous moment."

"...median household today is more impacted by higher inflation costs pertaining to necessary non-discretionary expenditures than median household in 1999."

"The excesses of IP law are now a serious obstacle to innovation and economic growth."

"A monetary regime change has occurred that has lowered the growth rate and growth path of nominal demand." http://macromarketmusings.blogspot.com/2017/09/monetary-regime-change-mission.html

"There has been no recent (real) growth acceleration."

The Fed needs to abandon its floor system and reduce the IOER rate.

"Going off the gold standard did the opposite of what many people think" (FT Alphaville)

It's becoming more difficult to locate and develop ideas through standard organizational means.
http://voxeu.org/article/ideas-aren-t-running-out-they-are-getting-more-expensive-find

The Fed has become anxious to "downsize"

A closer look at the industrial heartland.

A new approach to self driving vehicles would bypass some of the deep learning algorithms which autonomous vehicles now face. "The approach could lead to self driving vehicles that are much better equipped to deal with unfamiliar scenes and complex interactions on the road." This article is an apt reminder that we could also benefit from the exploration of ideas which apply beyond the bounds of "necessary" deep learning (for human capital investment), so as to make time based service product more accessible.

Whatever happened to the "empty nest" syndrome?

"It's notable that the rates expected to prevail over the long run have been systematically reduced."
Clearly the Fed has bought into secular stagnation.

Why are economists stumbling into some of the same macroeconomic mistakes which contributed to the severity of the Great Depression? What's more, economists did not have the same (hard won) monetary guidelines for economic stability back then, which decades of research have since brought to light.

Why we (still) have QUERTY: "It is not that once-off switching costs are that high. It is that on-going switching costs are."

Not every country can compensate skills via the same monetary terms, which is among the reasons I've promoted the internal coordination of skills preferences in a time based framework.

Headline unemployment rates are no longer reliable for labour market slack.

Non Tradable Sector Dominance Has Economic Effects

More specifically, this historically recent sectoral dominance, includes dramatic effects on wage structure and long term growth potential, which have yet to be addressed. A recent Brookings article, "Thirteen Facts About Wage Growth", provides useful framing in this blog post for what continues to transpire, particularly since the turn of the century. From the article:

Fact 1: The share of economic output workers receive has generally fallen over the past few decades.

While this is true, there's a contextual issue in the above statement, which - if not taken into account - can obscure missing clues re both wage structure and economic stagnation. Due to imbalances (human capital requirements) in required inputs as contrast with outputs, the relative output potential of non tradable sector activity, is dramatically less than tradable sector output. Consequently, less output takes place which could otherwise accrue to either nominal wage aggregates or real wage benefits. That said, contextual framing for missing output is important not just because of its implications for wages, but also the renewed expectations of Washington, for increased revenue through legislative tax cuts.

In the centuries when tradable sector activity remained dominant, for instance, innovation often led directly to consequent gains in both wage growth and actual marketplace dimensions. Yet innovation that corresponds with non tradable sector time based product, tends to be more important for the relief of budgetary burdens, then the support of wage aggregates or marketplace capacity.

Since the structural dominance of input intensive activity leads to less output overall, entire economies bear the additional costs. Even though central bankers clumsily attempt to reduce non tradable sector internal inflation, via less than complete monetary representation, the main effect is instead a slow but steady reduction of a society's total economic commitments. Thus the central banker response to non tradable sector crowding, unfortuantely intensifies the initial crowding effect. Meanwhile, the lack of flexible income options for time based services, has made it difficult for lower income levels to fully participate in non tradable sector activity, in spite of its present dominance.

Fact one required a long response, since the lost potential output of non tradable sector activity is by far the most important consideration, for either lost consumption capacity or sufficient revenue sources for governmental needs. However, I also want to touch on some of the other points raised by Brookings:

Fact 2: Wages have risen for those in the top of the distribution but stagnated for those in the bottom and middle.

When tradable sector formation was dominant, more revenue was composed of income which derived from total output. Management shared this revenue with workers, for workers shared in the creation of the product. Whereas in non tradable sector activity, it is simpler for business owners to assume ultimate responsibility, for the knowledge based product they represent. Given these conditions, today's time based service providers are under no obligation to share output revenue with employees, and may choose to compensate employees according to other criteria.

Consequently, much of today's non tradable sector knowledge based work has wide income variance by system design. While skills variance among employers and employers may not be as wide as income variance implies, there's little room for skills egalitarianism, given the revenue streams which these forms of organizational capacity rely upon. Likewise, much of today's dominant pass through businesses, derive income from non tradable sector activity, which in turn limits potential growth gains from tax cuts.  Again, from the initial Brookings article:

Fact 3: The education wage premium rose sharply until about 2000, contributing to rising wage inequality.

Non tradable sector activity dominance was just beginning to make its full effects known, at the turn of the century. One notes - for instance - when some of the initial losses took place in marketplace share, for a wide range of tradable sector product. Among these were tradable product as represented in my own workplace (at that time), for alternative healthcare OTC remedies.  As revenue claims for non tradable sector time based product began to displace the market share of tradable sector product, less overall output was the result. In aggregate, this also meant that fewer individuals would gain full monetary compensation from either tradable sector or non tradable sector employment.

Fact 7 from Brookings, also warrants a mention:

Workers have become less likely to move to a different state or to a different job, reducing wage growth.

Mobility is more closely associated with tradable sector activity, in large part because its organizational capacity and product definition, is dynamic and still evolving. Whereas, too much of today's non tradable sector activity - especially time/knowledge based product and housing - are rigidly defined. This lack of flexibility only adds to the perception of non tradable sector product as lacking in mobility, rooted in geographic preferences and too closely tied to specific revenue flows.

While most points made in the first Brookings article have relevance, some are more important for economic outcomes than others. However, the second Brookings article (re pass through businesses) reminded me how non tradable sector dominance would reduce growth potential from recently proposed tax reductions. When economies were still tradable sector dominant, reductions in taxes were far more capable of contributing to economic vitality via additional capital to increase output. Today, additional income gains from tax reductions, are relatively more likely to accrue to what is already well compensated skills capacity. The problem? Time based product - regardless of compensation - cannot multiply itself to create additional output and marketplace capacity.

First, Abandon the Concept of Labour...

Would it be irrational to sideline the concept of labour, from the workplace of the future? Especially given the fact that some forms of physical labour will remain necessary, that are repetitive, difficult, and even dangerous. Fortunately, however, these kinds of labour are no longer needed in the quantities they once were.

Nevertheless, nations which lack economic complexity, continue to expect their citizens to perform an excessive amount of physical labour, in relation to more desirable forms of work. As Timothy Taylor recently noted, for instance, children still bear too much of this burden. Alas, for some nations, better forms of organizational capacity are needed, which can finally give these populations more hope for the future.

For advanced nations, however, the conceptual environment for labour is quite different, and has been for some time. Here, the challenge is to insure that no group of individuals should be left out of economic participation, or else expected to perform all of the work of a society which is necessary, but not intellectually stimulating. In particular, when physical labour becomes the primary economic choice for older citizens (as other skills become less relevant), the result is akin to the child labourer who bears too extensive a daily burden, to realistically pursue a well lived life.

Why has the concept of labour, proven so confusing? In developed nations, the work that a majority of individuals seek (when they have the chance to do so), is not just a matter of necessary production. Meaningful work includes many activities which also function as forms of personal, time oriented consumption. In order to gain such work, individuals became willing to expend considerable sacrifice and human capital investment. This fact alone, helps to explain why it isn't helpful to place stimulating and desirable work, in the same framing as mind numbing yet necessary work.

One reason it is important to distinguish these categories separately, is that people are often well compensated for work they already wanted as a form of psychic consumption. While there is nothing wrong with this, more people need a chance to partake in work as psychic consumption, even if and when they aren't compensated via high incomes. Many of us would be more than willing to perform such work with minimal monetary compensation, whenever internally shared costs of assets and time based services (defined equilibrium), make it possible to do so.

The work that is especially sought in the near future is less about labour, and more about improving how we experience shared time with others in workplaces and marketplaces. An important feature of time based services, is that production and consumption are part of the same "package", or service product. Likewise, the practical often blends with the experiential, in terms of what is sought by all who are involved in the process.

Part of abandoning the concept of labour, includes acknowledging the fact that our time is a scarce and hence precious resource. Today's institutions treat aggregate time potential as excessively abundant, which is why they can't tap into time based resources so as to allow this natural commodity to come into its own.

Even though formal education attempts to improve the quality of the time we offer to others, these institutions weren't constructed so as to make use of one's personal time offerings in a broadly relevant framework. Instead, both not for profit education and for profit education, were constructed to gain profits as the primary marketplace in which human capital investments could be purchased. The problem? A lack of organizational platforms in workplaces and marketplaces, which could consequently make full use of these extensive personal commitments.

More platforms for human capital potential, are greatly needed. And by recognizing the reality of desirable work as a form of consumption, we can also safely sideline the concept of labour, so that future work might finally be conceived and applied in more meaningful terms.

Why Are Normative Healthcare Arguments So Confusing?

Normative approaches for the distribution of time based product, especially in its most basic constructs, don't work at the level of general equilibrium. These discussions can quickly turn into cultural quicksand, given the lack of thoughtful consideration re supply side architecture. Yet there's little incentive to make things less confusing, when policy makers need to please everyone and generate a one size fits all healthcare result.

Regular readers by now are familiar with my rationale in this regard. Why aren't normative arguments for healthcare "redistribution", a reasonable approach? One cannot redistribute a supply side factor that does not actually exist. And when institutions use the revenue of existing wealth to compensate time value as a random component of available skill capacity (as opposed to total time/skills capacity), the result isn't representative of time aggregate potential. Hence I have argued for local and decentralized time arbitrage systems, which would focus on the wealth generation potential of any entire set whose common component is human resource capacity.

I thought about the downfalls of a normative approach for general equilibrium healthcare, after noting some of the puzzled commenter responses to a recent post from Tyler Cowen in which he opened his argument with this:

1. The strongest argument for redistribution is when redistribution boosts economic growth and benefits all or most of society.

Since compensated skill (via general equilibrium distribution) is not representative of aggregate skill potential, even the "best" Obamacare result could not make a positive marketplace contribution. Based on what we surmise regarding resource utilization, when might government best contribute to citizen support and marketplace stability at the same time? After all, besides the logical public good of general equilibrium physical infrastructure, governments once held a larger role in the wealth creation of tradable sector activity; the success of which which has understandably reverted to private interests, since economies became vastly more complex.

The problem is that governments - so as to gain the support of their most successful constituents - have inadvertently undermined local economic settings where normative approaches have a reasonable chance of positive outcomes. Once Washington began to subsidize healthcare providers (with all the lack of redistributive transparency this implies), many onlookers concluded that healthcare now belonged to - and could be negotiated in - a broad normative platform.

Despite this extensive societal assumption and also paradoxically: Economists often approach public policy as though it should merely support a non-normative or spontaneous marketplace. But in doing so, they give up the possibility of contributing to effective normative institutional responses which might generate positive outcomes. Consequently, economists who reflexively defend the supply side as it already exists, give up the possibility of powerful and valuable input, into supply side organizational potential.

Meanwhile, healthcare would scarce appear any different should it devolve to state levels, so long as any legislation continues this unfortunate history of granting favours through limits on supply side production. What's interesting is that existing original limits on supply side sources, hardly even enter serious discussions. Meanwhile, as the effects of original sin limits spread across the larger political spectrum, the normative debates of philosophers, sociologists and others, only make the matter more divisive than it was to begin with. How could this be the level of discourse, where supposedly practical and results oriented economists, find it beneficial to engage?

And what our government has yet to recognize, is that by granting oft permanent institutional privileges to particular associations, the New World is following the same familiar path of hereditary advantage which was associated with the Old World. In the future, as governmental legislatures contemplate their participation in economic matters, they might recognize the extent to which they limit economic opportunity, and the future destinies of every citizen, whenever they are tempted to bestow permanent prestige on those they believe to be most deserving.

Trust and Class Commonality

Are societal trust issues affected by widening differences in income level? As populations continue to sort both geographically and monetarily according to skill and merit, it becomes more difficult to coordinate basic time use functions across groups. Plus: When high income groups compensate low income groups for economic activities, doing so sometimes involves a degree of risk - particularly when time based services occur within one's home. Nevertheless, in part due to new digital means which make it simple to monitor the transaction, Walmart is now willing to offer at home grocery delivery, straight to one's refrigerator.

Walmart is betting that today's high tech reality, can generate sufficient trust so that strangers might enter when we aren't home. Their advertising approach includes an interesting low cost/low skill twist, given the usual appeals to trustworthiness so often observed. In countless television commercials, local service providers assure potential customers that services will be carried out by someone whose professional level is "top notch".

Yet the local service provider approach has proven effective for good reason: Commonality between those who hire, and those who would be hired, implies less risk involved in the transaction. People are most comfortable coordinating personal activities with those who share similar income levels and backgrounds, since there tends to be less reason for theft in these circumstance. Normally, whenever groups come together which hold wide variance in skill and income levels, public settings tend to be preferred, so that more eyes can see what takes place.

Hence shared preference for class commonality, suggests that a different approach to work coordination is ultimately possible. We could build upon greater class commonality, by coordinating a wide range of skill sets in our daily routines with others. Our openness to sharing the most sought after workplace challenges of our time, would make it possible to coordinate a wider range of economic activity at much closer range. When individuals and groups are willing to share a full range of skill levels that are related by proximity, group commonalities could eventually be constructed, that are more amenable to mutual trust.

Why might skills sharing be such an efficient approach? For one, it would greatly minimize today's commuting and real estate issues which otherwise increasingly stand in the way of multi skill coordination. Even better, the willingness to share a full range of skills sets with others, could be one of the best means we have, to restore societal trust.

Some Thoughts on Dynamic Property Ownership

Part of the decline in economic velocity over time, can be attributed to difficulties in making the most of property ownership, especially for properties which are mutually owned by family members. Even though housing has mostly become associated with consumption in the present, some still rely on mutually owned personal (family) property as primary production means for goods or services.

However, it can be especially difficult for lower income levels, to successfully work out disputes regarding the use and/or control of mutually owned personal property. Due to the inflexibility of legal ownership guidelines, family owned resource capacity can end up utilized at a fraction of its true potential. Too many people have lost everything - time and again - for no better reason than family members could not, or would not, agree among themselves regarding common usage for mutually owned property.

In recent years I've suggested a flexible institutional structure for property use, which could make more dynamic forms of property ownership possible - especially for physical assets as utilized by individuals. Property ownership of participants within an equilibrium corporate structure, would function like the pieces of a dynamic jigsaw puzzle, which allows property holdings to adjust for group and individual work/life patterns, as they change and evolve. The ownership process begins with each participant's basic level of property acquisition, which corresponds with entry into time arbitrage via peer to peer educational assistance.

These base property holdings would function as a form of group insurance, via replacement base building components in the event of natural disasters and the like. Basic levels of services access in the course of one's lifetime, would coexist alongside this (time value backed) property insurance pool.* While specific locations are sometimes important in their own right, often the specific geographic location is a second consideration. This way, each group is able to retain its ability to shift holdings for life and work patterns so that families and individuals who have shared time based obligations, can remain in reasonable walking and/or commuting distance from one another.

Often, ownership is not so much about a specific building component or property, but one's ability to utilize buildings and property so that their personal efforts and risks in relation to others, aren't unduly compromised. If specific properties in this setting function as dynamic jigsaw puzzle pieces, one might imagine building components in this context, as similar to Lego pieces. While many properties would closely correspond to changing life/work settings, other more permanent property designations would provide ample room as well, for the personal expressions which personal ownership can beautifully impart to the landscape.

Dynamic property ownership would reduce the legal problems which arise when physical property ownership is subject to the inevitable risks of life. While divorce is among the greatest risk for lower income levels, these groups are at greater risk from the vicissitudes of nature as well - particularly floods. With more viable options for individual ownership, it would become a simpler matter for many individuals with small incomes, to remain economically engaged for the full duration of a lifetime.


*Additional ownership beyond the base insurance levels agreed upon by individual communities, would function as more normal aspects of property ownership.

Economic Settings vs the Realities of the 75%

Who are the 75%? These are essentially the individuals whose paid work tends to fall short of meeting the expected general equilibrium costs for housing, transportation, and healthcare. At issue is the fact that over time, all of these costs need to be met to effectively participate in the workplace. Today's core income structure in particular, which generally provides full time work (with benefits) for college graduates, is the approximately 25 percent of the population which can meet these responsibilities. A lack of flexibility in non tradable sector setting requirements, has only made it more difficult to match the aspirations of employers and employees, across a full range of skills.

Just the same, there's still a lot of wishful thinking, in that too many municipalities and governments continue to plan budgets as though a much larger percentage of their populations held core workplace responsibilities. As Brink Lindsey recently wrote, regarding the core workforce which has tightened since the new century:

Outside a well-educated and comfortable elite comprising 20-25 percent of Americans, we see unmistakable signs of social collapse.

As the reader may note, I'm also being generous in the assumption that 25 percent of populations can easily afford today's general equilibrium expectations. What if the problem of inadequate workplace revenue for infrastructural maintenance, could be met via more college graduates? Existing businesses can't just readily add more core workplace compensation, because more personal ability becomes available for hiring potential. By way of example, the Economist writes:

So far, university degrees have been a reliable proxy for skill but this may change as artificial intelligence starts taking away jobs from white-collar workers. Projections from America's Bureau of Labour Statistics show that four of the five fastest growing occupations in the country involve personal care; none of these jobs requires a bachelor's degree.

There are three primary issues at stake, regarding future potential matches between individuals, communities, and workplace expectations: housing, transportation, and healthcare costs. Let's consider how these structural elements are currently playing out. As it turns out, the first two have been simpler to subject to external design than the latter, hence new corporate municipal structure is most likely to focus on basic reduced non tradable sector costs for housing and transportation which also make it possible to hire sufficient employees without extensive compensation.

Nevertheless, these arrangements to reduce costs for future employees, may still carry the unspoken assumption that already existing supply side healthcare will also expand to meet their needs. Hence new community design stops short at the third non tradable sector element.

How do these recent corporate efforts for new community, compare with citizen led initiatives for small community formation? While spontaneous citizen led initiatives may seem insignificant (compared with corporate design); again, insufficient local healthcare, presents the same institutional barrier.

None of these new community groups - large or small - have been able to effectively change the costs or access of their healthcare outcomes. After the flower children of an earlier era (60s and 70s) moved into rural areas, many of them returned to the cities, once they realized their offspring lacked access to local doctors. Recently retired like minded individuals who seek cooperative living patterns, face similar problems now. These groups come together, yet once a participant begins to need more than simple healthcare assistance, is compelled to return to the already strained service networks which neither national or state governments have been able to effectively coordinate. Whether new community is large or small, the lack of healthcare as an integral component of system design, is a major inhibitor to new community options.

Spontaneous community becomes most viable, when local participants can directly contribute to new production potential. In the present, the greatest opportunity for doing so, exists in time based knowledge product. The equilibrium corporate structure, by focusing on healthcare production alongside more focused design for housing assets and transportation needs, could provide means for today's 75 percent to meet their basic responsibilities. One might say that current corporate efforts to streamline transportation and housing, are two thirds of the way to better equilibrium definition. By making time based services production a part of local non tradable sector formation, the 75 percent could make it to the goal line.

Time Centric Economic Development

Economic time value as a parallel component (alongside money) for societal coordination, could make it simpler for economies to remain in dynamic patterns. For instance, the incremental ownership aspect of time arbitrage, in which one "owns" knowledge to the extent they incrementally use it, could also add much needed velocity to GDP. Time centric economic development, would generate new knowledge use patterns which provide institutional options to the knowledge which inadvertently ends up caught in the passive revenue flows of domestic assets.

Time centric economic development could eventually help us break out of what have become static roles for knowledge use. Limits to knowledge use now contribute to economic stagnation, since productive agglomeration has become closely tied to specific geographic locations. The potential of the digital realm to bring dynamic knowledge use to all corners of the globe, only highlights the current breakdown in knowledge use patterns which has instead taken place.

Since there are hard limits on the groups which can work in areas where knowledge wealth accumulates (via valuable real estate), the potential of long term economic growth remains at stake. It would be far better for all concerned, if knowledge benefits could also accrue to the purposeful activity of informally defined groups. Personal time value as a wealth building commodity, would allow knowledge to function - once again - as ongoing informal activity. Indeed, knowledge wealth accumulated for millennia on similar terms, before knowledge use processes were circumvented by extensive 20th century limitations for economic participation.

Meanwhile, the combined efforts of many groups for the coordination of knowledge, are accumulating like so much sediment at the end of today's major knowledge use arteries. As different groups continue to separate from one another by skill level, it only becomes more difficult to coordinate for total skill capacity across groups. Kevin Bryan explains how path stickiness has occurred, in today's major cities:

Much of the developed world has, over the past forty years, pursued development policies that are very favorable to existing landowners. This has led to stickiness which makes path dependence more important, and reallocation toward more productive uses less likely, both because cities cannot shift their geographic nature and because people can't move to cities that become more productive.

By way of example, the recent concern that society may be "running out of ideas" goes back to the fact that too much resource capacity is caught in institutional formats which are no longer able to make room for the knowledge based aspirations and challenges of individuals who lack advanced degrees. When knowledge use becomes mostly professional activity made possible by graduate level degrees, the results tend to be either skill access struggles (healthcare), or constantly debated professional opinions (formal education), much of which resembles a Winchester Mystery House, in which knowledge fills halls, stairways and rooms, but otherwise has few viable places to go in which it is capable of benefiting anyone.

Knowledge use now faces these unexpected limits, in large part because of its external dependence on other existing revenue. Unfortunately, when money becomes the only means by which a society can coordinate economic patterns, too much revenue eventually pools into the passive asset holdings of location bound real estate. Time centric economic development, in which time becomes a unit of commodity wealth alongside money, could help to prevent these losses in economic velocity. Since time arbitrage would also be asset backed (via flexible building components and infrastructure), new productive agglomeration could occur with a mere fraction of the infrastructure that is presently necessary.

Time centric economic development could allow groups to maintain the use of knowledge via the coordination of multiple skill levels across group participants. This process would allow knowledge to continue dispersing so as to activate further activity, through the "vehicle" of time as commodity based wealth.

We need better institutional means by which cumulative knowledge has a chance to remain accessible to all who find it useful, practical, and beneficial. Knowledge use systems could be designed in ways that should one group become unable to maintain the use of knowledge in certain specific settings, the knowledge at stake could readily be absorbed by other groups which operate within the same systemic design.

Monetary Rationale for Time Value as Commodity

How did so many of us become convinced that gold standards are "bad"? Could it be they are simply outdated, or is something else at stake? In a thoughtful post, Josh Hendrickson concludes:

To assess whether the gold standard, or any monetary system, is "good" or "bad" requires careful consideration of the institutional characteristics of the system. A gold standard can work quite well within the right institutional structure. But the same could be said for a fiat regime. To argue that one or the other is inherently bad - or worse, claim that everyone agrees with you - is to do a disservice to those who want to learn about monetary economics.

Regular readers aren't surprised that I'd also like monetary economics to be expressed in ways which at least make basic sense to the public. For one thing, the more a given population understands about the basic workings of their monetary system, the more likely they may be inclined to trust their own governmental institutions.

One of the most useful aspects of today's fiat monetary systems, are their flexibility. As services have become more dominant components of developed economies, fiat monetary regimes help to streamline the process of incorporating time based services and knowledge use into a broader monetary framework. Why don't we tell simpler institutional stories which might encourage citizens to be more confident in these systems?

Meanwhile, the effects of services dominance on equilibrium conditions have yet to be broadly discussed, and even some economists and central bankers don't appear to be comfortable with the monetary claims of services generated wealth. Perhaps we would benefit from a closer look at how services sector dominance influences macroeconomic outcomes, particularly effects on long term growth and overall debt load structure.

Many have wondered why central bankers still use inflation targeting, instead of a more precise tool such as a level nominal target. It could be that inflation targeting serves as a foil for central bankers to dismiss the recent complications which today's services dominated economy present for overall macroeconomic structure. Just the same, avoidance such as this needs to be dealt with, especially since central bankers haven't been faithful to a full level of monetary representation, in terms of what is being produced by all concerned.

Real economy conditions have only become more important, for the maintenance of an appropriate monetary standard. Gold standards existed in a historical framing when not only was wealth more closely associated with commodity dominance, this wealth was easier to measure and ascertain. Indeed, some economists would still prefer a commodity standard in the present. Wikipedia explains that in a fiat standard, the value of currency is set by the federal government, and continues:

Not long ago, America's monetary system was built on a commodity standard, where the value of currency depended on a fixed exchange rate between money and a single good or a basket of goods.

Compared with a fiat monetary standard, a commodity standard was relatively simple. One could assemble a broad sampling of commodities and regularly manufactured product, and glean a reasonably good approximation regarding the dimensions of an equilibrium, in which both manufacturing and services sectors basically circulated revenue flows in balance with each other.

In spite of the flexibility they contribute to spontaneous coordination at a national level, fiat monetary systems tend to distort this circulatory balance in ways that many groups have reason not to completely trust. As governments switched to fiat monetary regimes and set about utilizing extensive debt formation for time based services, an element of uncertainty was introduced, regarding reliable equilibrium dimensions. While a nominal level target is best equipped to represent equilibrium dimension, central bankers may doubt the ability of their governments to maintain present conditions for time based services contribution, to wealth creation in general. In spite of this recalcitrance on the part of policy makers, it remains vital to get monetary representation right, for the wealth and economic activity that people seek to create.

Part of the problem, is that too much services generation and knowledge use have proven notoriously difficult to measure. How many other resources are expected to be redirected, for any given unit of time based service product?

Personal economic time value, as a wealth generating commodity unit, could eventually lend better measurement capacity for knowledge use and overall economic stability. How so? As an internally generated, non debt producing unit of commodity wealth which is accounted for at the outset, time arbitrage could contribute to reliable general equilibrium dimension in the same (primary market) capacity as traditional manufacture. Time based commodity units would eventually help to restore circulatory balance between primary market wealth creation, and secondary market wealth circulation.

Even though fiat monetary systems are reliable for the external compensation of knowledge use up to a point, these highly specific skill rewards aren't fully accountable at the outset. Consequently, fiscally compensated time based product contributes to a debt driven equilibrium which distorts the true capacity of monetary flow potential. Time arbitrage would be instrumental in returning to a status in which equilibrium capacity could be more readily determined.

While fiat monetary regimes are still quite useful in the present, they cannot simply continue as open checkbooks which don't determine the nature of ongoing debt formation in relation to overall resource capacity. By utilizing time value as a commonly held commodity, time based services generation could eventually place less demand on overall monetary representation, thereby generating more public trust in knowledge generation processes.

Some Healthcare Musings and Market Possibilities

Single payer healthcare is back in the news, since the introduction of a "Medicare for All" bill by Bernie Sanders. In an article for Bloomberg, "Incentives Are All Wrong for Single-Payer Healthcare", Tyler Cowen writes:

It's worth thinking through why some single-payer systems, such as those on the European continent or in Hong Kong and Taiwan, seem to work. Typically these systems were instituted while health-care costs were still fairly low, and then kept down by government fiat. The U.S. is not in that position, and it's hard to see doctors and hospitals -- powerful lobbies -- going along with significant cuts to their payments.

Essentially, most special interests in the U.S. are important parts of the "buy in" for legislative results. Tyler Cowen continues:

When it comes to access, the major problem in the U.S. is distributional: Some of the poor have insufficient access, and arguably some of the well-off have insufficient access, and arguably some of the well-off receive healthcare at too low a user price. Given Americas' love for consumption, it's probably too late to fix the latter problem.

However, there's somewhat of a paradox in the "Americas' love for consumption" argument. There are many potential treatment options across the spectrum, besides what may be suggested in the doctor's office. Many such options also happen to be less expensive. Nevertheless, alternative treatments and remedies have been systematically devalued as long as anyone can remember - not just by healthcare practitioners but in particular by major media sources. While this barrage of reasoning helped to reduce marketplace competition for professional providers and pharmaceutical remedies, it simultaneously made too many people who often couldn't pay for formal healthcare, more dependent on a system which in many respects wasn't structured to include them.

For decades I've observed the effects of "alternative healthcare product is bad/worthless/dangerous" reasoning, in spite of the fact formal healthcare has its own risks. Risks go with the territory! And while the intent of many healthcare professionals may have been to preserve the loyalty of high paying customers, they inadvertently gained the loyalty of low income customers who not only lost faith in lower cost alternative options, but also tended to prefer guaranteed access to treatments with built in higher costs.

Indeed, the government fiat which Cowen mentioned in the above quote, probably makes it simpler for other governments to include older tried and true methods alongside current medical remedies and procedures. Given the chance to visit other countries, I like to imagine that I would not encounter the negative media attitude towards informal and alternative methods, which exists here.

Healthcare in the U.S. is a more substantial problem at an equilibrium level, than elsewhere. Once governments set up processes in which they are expected to "give something back" (subsidies for those who can reciprocate) for legislation, that's difficult to change.

Regular readers know that I have high hopes for knowledge use systems which could incorporate the practical from modern medicine, alongside tried and trustworthy methods from the past. Interestingly enough the "single payer" framework suggested a suitable framing for small group approaches: Contributions from "single disease" specialists. Where once such specialization would have been impractical in small or local settings, the digital realm means new horizons for the cross fertilization of approaches and remedies, across local knowledge use systems. Not all research and development which takes place via time arbitrage, need be local in nature.

Of course, no participant need concentrate on a single disease, if they wish to continue. Rather, a single disease approach would provide means for individuals to gain solid economic footing at an early stage in their incremental learning process. Some participants could make a single disease focus their healthcare contribution for aggregate group efforts, while others may choose to expand into further healthcare studies.

In his above linked post, Tyler Cowen mentioned Medicaid expansion as an option. However, as noted by Dana Goldman at Brookings, the first "go to" of Medicare has its own problems:

People also forget that Medicare is a hidebound system. It took Congress more than 40 years to offer a prescription drug benefit, for example. Physicians are paid using an arcane system developed decades ago and that has now ballooned to more than 140,000 procedures codes, all of which is supervised (and gamed) by physicians themselves. Standard private sector cost-saving measures, like competitive bidding for routine services, are rarely used.

There is a better way - called universal catastrophic coverage - which borrows from both progressive and conservative playbooks. It would combine the federal guarantees of insurance for all with the cost controlling benefits of insurers competing for that business.

While universal catastrophic coverage sounds promising, the main problem for implementation, still goes back to the way our "rewards for all" system was developed. Likewise, today's formal healthcare specialists need to focus their efforts on what clearly pays in the marketplace. And because of the costs of their education, most specialists need our government to maintain the subsidies which are already in place.

Time arbitrage could finally allow individuals to focus on healthcare issues which don't provide the same profits. How so? Since time would compensate time, system participants would be able to pursue research and development which isn't profitable in general equilibrium conditions. Plus, healthcare participants would be able to allocate time to individuals where it is most actively sought. We don't really know what time would be sought, because time based compensation has often been allocated according to institutional needs instead of the personal needs of provider and recipient. Fortunately, by making each individual an active component of wealth creation, there are market possibilities for healthcare which have yet to be imagined.

Asset Ownership is Key for Base Velocity

In particular, stable levels of base velocity are necessary, for lower income levels to reliably participate in the economy. One might also distinguish this base velocity from low income discretionary spending, which is of a more random nature.

One way to generate stronger base velocity, is to support knowledge use as an ongoing economic learning process which begins in youth. Asset formation would take place alongside mutually held time commitments, while time arbitrage contributes to personal autonomy by allowing shared daily routines to function as incremental economic processes. In recent years, I've suggested incremental asset ownership for individuals who sometimes struggle to maintain a full plate of financial obligations. Simple and flexible building components, could encourage individuals to discover and maintain levels of ownership and participation which work best for them, at different points in their lives.

When ownership options such as these are lacking, many individuals tend to end up in solitude and dependence, who otherwise could have remained socially and economically engaged. It's a reality which creates problems in terms of both basic levels of economic velocity, and production potential. Since this lack of full economic participation has yet to be addressed, the fallout of lost access generates additional burdens for higher income levels - both in taxpayer obligations and the additional costs of social separation. In some instances, a dearth of productive economic environments, ultimately translates into indirect but real lost wage capacity, for higher income level groups.

Structural considerations such as these should be taken into account, in that they provide a broader framing for related concerns regarding future wage potential. The Hamilton Project is just one of the latest groups to convene and discuss "What can and should be done to promote the economic growth that will lead to higher earnings for more American workers?"

Without sufficient base velocity for lower income levels, there are general equilibrium effects which negatively impact both nominal and real wage potential. When supply is already restricted for non tradable sector product, wage increases do nothing to increase access to non tradable sector product. This is the supply side reality in basic amenities, which consequently impacts discretionary income for higher income levels. If supply remains restricted in basic housing assets or time based services, wage increases alone cannot contribute to marketplace formation.

Tyler Cowen noted an example of supply effects on general equilibrium in a recent post. He stressed that relatively lighter regulatory environments can create positive "unseen effects", which increases supply so as to reduce the pressure on the most expensive markets within the same general equilibrium.

What Cowen highlighted in terms of housing, has a similar general equilibrium equivalent in terms of taxpayer obligations for the negative externalities attributable to those who lack economic access. A better way to address wage issues, is through equilibrium growth potential where it is most clearly missing. Again, attempting to do so via the demand side is misleading, since government redistribution doesn't create additional supply for either housing assets or time based services formation. A more appropriate government role, would be to give a green light to new institutions which generate dynamic economic conditions for lower income levels.

Granted, higher income levels sometimes face wage constraints which impact discretionary income. But the main reason for this reality, are non tradable sector supply side limits on production requirements and economic participation. Even so, quality control requirements such as these should not prevent higher income levels from full economic participation. Whereas, when lower income levels lack economic access, they are less able to contribute either to non tradable sector activity via base velocity, or tradable sector activity via discretionary income velocity.

Kevin Erdmann continues to press for broader ownership of housing assets as well. Recently he wrote "This is your occasional reminder that the stagnation we are experiencing is housing." Nevertheless, this lack of housing for individuals and families alike, is matched by a lack of personal participation in services generation. Indeed, services capacity which is capable of creating new wealth, would likely contribute more than the 1 to 2 percent of additional GDP which Erdmann believes would be possible through better housing access.

No discussion re aggregate wage levels is realistic, so long as economic velocity remains too low to generate economic complexity for lower income levels. This loss of economic capacity affects income potential along the entire spectrum. Even though general equilibrium is too tightly defined to accommodate incremental growth, new growth is possible via defined equilibrium settings which would once again generate base velocity for lower income levels. Once lower income levels become better able to meet working and living requirements, these groups will gain new options for discretionary income. What's more, discretionary gains for lower income levels could eventually translate into positive effects for the discretionary income of higher income levels, as well.

Personal Economic Interaction Can Be Regained

Are we purposefully eliminating ourselves from direct interaction with others, both economically and socially? At MIT Technology Review, David Byrne writes:

We are beset by - and immersed in - apps and devices that are quietly reducing the amount of meaningful interaction we have with each other. 

What if tech development has an "unspoken overarching agenda", as Byrne suggested, to reduce direct forms of personal communication? In other words, what if the ongoing reduction of human activity (in the marketplace and otherwise) turns out to be a feature, instead of a bug?

While some reduction of interpersonal activity has been intentional, it helps to remember how our present economic alignments inadvertently encourage social isolation. Society remains in a position where it's still necessarily to treat compensated personal interaction as an institutional cost, rather than a personal source of wealth potential. Meanwhile, the same technology gains which previously led to both increased wages and output, now mean less human input in relation to output, in a services dominated economy.

Nevertheless, an increased degree of involvement on our part is key, if we are to maintain a dynamic presence in our own economic settings. Fortunately, one means to do so, is by generating new interpersonal economic value. Indeed, we can do so not just through mutually allocated time for daily routines, but also the less routine experiences we seek via the assistance of others. Fortunately, time value as a commodity, could make our purposeful time with others, a direct component of both wealth and economic freedom.

For our time value to gain personal and social economic relevance, we transform it from an institutional cost into a shared resource. In order to do so, we purchase the time value we hope to gain from others, through the personally invested time of our own. While this time arbitrage process becomes recorded and categorized, it also gains monetary backing. Those who take part in the process, present mutually held time preferences as a commodity value constant, so as to grow the knowledge use network.

The challenge of making one's time valuable for others, would lead to a level of competition in services generation which otherwise isn't possible, whenever time based services have to rely on external resource capacity for skills compensation. And presently, firms which might otherwise choose to preserve human interaction to the greatest degree possible, remain threatened by directly competing firms which choose to reduce the need for human interaction. By making time value capable of purchase via the time of others, more individuals would gradually gain the option of preserving personal interaction at higher levels, in both the workplace and elsewhere.

Much of this comes down to the conscious decisions we can individually and collectively make, about the value of our economic time. There are two obvious essential areas which define interpersonal time based product:  Practical product, and experiential product. When time value cannot be bargained for directly (via the time people have at their disposal), certain forms of practical product deemed particularly important, will slowly but surely undermine the ability of a given population, to engage in experiential product which includes direct human interaction. Which is vitally important, because high levels of experiential product which include human interaction, are one of the most important markers of any civilized society.

Earlier this year, Alice Rivlin at Brookings, in "Seeking a policy response to the robot takeover", concluded her article with these thoughts:

If the enthusiasts of smart machines are right, the truck drivers are just a small fraction of the workers soon to be displaced by a new wave of technological advance. Americans will be forced to face up to the daunting challenge of what we want our society to be when we no longer have to do hard boring jobs like driving a truck. We have to figure out new ways of developing and adequately rewarding the skills that only humans have, like emphathizing, nurturing, and fostering athletic skills and artistic creativity. That is the particular challenge posed by smart machines. There are no easy answers to this challenge, but focusing on the soon-to-be-displaced truck drivers is a good place to start.

An Epic Storm of Inane Hurricane Articles

Numerous articles have been written about Hurricane Harvey, in what continues to be a destructive hurricane season. Unfortunately, with some notable exceptions, too many articles took advantage of the already trying circumstance of Hurricane Harvey, to bash Houston in particular, and politics in general. It helps no one, for the media to use major storms as yet another tool to divide public opinion.

In times of devastation and tragedy, which are already difficult enough, why not write instead about the positive efforts of countless heroes and volunteers, as they come together to help one another? Or at the very least, provide useful discussions regarding infrastructure design options which are short on inappropriate blame, and long on potential solutions.

Hurricane Harvey was a most unusual storm, which remained in our coastal regions far too long. Consequently, local municipal systems were strained to the limit, and we are fortunate these systems held up as well as they did. Harvey, with its record setting levels of rain across Texas coastal regions, was a storm in which the least bad option for many of us was to shelter in place. Just as one emergency management director said, re ongoing evacuations for Hurricane Irma, "Honestly, I can't tell you where safe is." And many emergency coordinators remember all too well what took place when millions tried to leave Houston in advance of Hurricane Rita. As Wikipedia noted, regarding that ill fated evacuation:

The combination of severe gridlock and excessive heat led to between 90 and 118 deaths even before the storm arrived.

Dietrich Vollrath, an economist at the University of Houston, expressed his frustration with a onslaught of "Hurricane Harvey as X" articles which were written even before floodwaters worked their way downstream. This hurricane was a catastrophe, not some ill begotten metaphor, and Vollrath's rant is worth reading in full. From his "Harvey" post:

For those of you wondering why the whole city didn't evacuate, do you really think that the city was shocked to discover it could be hit by a massive hurricane? Sheltering in place was not some shoot-from-the-hip wild guess of a strategy. It's the best of a bunch of crappy options. If you want to have a discussion, say a month from now after the worst of this is all over, about whether there are ways to effect an evacuation, during the next Harvey-like event, great. Let's do it. In the meantime, your homework is to devise a plan to evacuate the entire state of Massachusetts subject to the following constraints. (A) you have 48 hours. (B) You can't use Rhode Island, Connecticut, or New York, and (C) everyone needs shelter for up to 10 days. Go.

Unfortunately, even some economists didn't get Vollrath's "Harvey as metaphor" memo. The most recent example I came across was Joseph Stiglitz, who used this major storm as yet another excuse to assign further blame with the Trump administration. One doesn't have to be particularly fond of the inanities of Washington, to find Hurricane Harvey an odd connection to such goings on. For those who would enjoy a good rebuttal to similar narratives, Leo Linbeck at the New Geography blog, provides an apt synthesis of various major media complaints, and addresses them one by one.

At the very least, the informal use of social media platforms has been more positive. These platforms made possible a level of decentralized rescue and relief efforts which was not feasible during Hurricane Katrina. And despite what anyone thinks about the "appropriate" nature of centralized efforts, neighbors helping neighbors becomes all the more important, when people need to shelter in place and then respond to local events as the situation changes.

Two articles in particular had the right idea, hence deserve to be highlighted. Ian Bogost, in an article for the Atlantic ("Houston's Flood is a Design Problem"), wrote:

It's not because the water comes in. It's because it is forced to leave again.

Indeed, the same system decentralization which could assist and augment knowledge use, could pair people who opt to shelter in place, with water systems which capture water in place. In "How Long Will it Take Houston's Floodwaters to Drain?", Laura Geggel offers suggestions for site specific solutions to water management. She explains how Houston is slow to drain, which in turn puts additional pressure on its systems. Again, infrastructure design is important.

If there's any takeaway from the deluge of unhelpful hurricane articles, one question in particular comes to mind: Why can't formal media outlets be more helpful and positive in outlook? A more positive approach could make everyone feel better, in the uncertain times of the present.

Working Classes: What's Really at Stake?

Much can be done to improve the lot of today's working classes, through conscious efforts on the part of society as a whole. There are many reasons, why our working classes deserve a more careful economic focus than what they normally receive.

In particular, requirements for housing, time based services and physical infrastructure are too excessive and extravagant, for the future income potential of many citizens. Importantly, however, much more is at stake, than any moral judgments about specific income levels. Should future low income realities not be proactively addressed, community sustainability will become progressively difficult. New cultural markers need to be experimented with. Any discussions about regulation, for instance, should tell specific stories. What do specific individuals wish to accomplish in specific settings? Turn every imaginable resource capacity to these ends, and make allowances for the fact each setting is unique.

Many among today's working classes, hold higher levels of motivation and aspiration to succeed, than is commonly recognized. Despite the fact that much of working class circumstance can be attributed to unconscious societal motivations, we can generate new institutions which include a conscious motivation for more positive outcomes.

Even though automation greatly reduced the need for hard physical labour in traditional manufacture, not much has changed in this regard, for low income services labour. And while the working class of traditional manufacture is in decline, the still plentiful low skill jobs of our services dominant economy, include physical labour which often make "normal" retirement age, a difficult goal to reach. This important health consideration, is by far one of the most important reasons we have, to share the work of intellectual challenge with everyone, so that excessive physical labour need not lead to extensive health problems in one's later years.

Nor can anyone realistically expect to improve the lot of working classes, through monetary redistribution from other income levels. What today's working classes need most, is a chance to participate in the kinds of work and intellectual challenges which make life worthwhile. If the productive use of knowledge use is not shared more broadly in the 21st century, societal divisions may continue to a point that the liberal aspirations of recent centuries could be lost.

We need to reorient our conscious efforts towards greater economic inclusion, instead of simply hoping everything will turn out for the best, should we do nothing. Not every individual can be expected to take low income service work, should better compensated work disappear. As Mosley Vardi (Market Watch) recently noted, "Automation will significantly change many people's lives in ways that may be painful and enduring".

Fortunately, we can build new forms of productive decentralization, which counter today's overly centralized and exclusive framework. Brink Lindsey is one who holds high hopes in this regard, for he recently wrote:

There is no iron law of history impelling us to treat the majority of our fellow citizens as superfluous afterthoughts. A more human economy, and a more inclusive prosperity, is possible.

More Thoughts on Organizational Structure

In a recent post, I gave some explanations why an equilibrium corporate structure would function best as a for profit institution. For that matter, turning time value into wealth, deserves to be closely associated with for profit activity. Also, why do we need time arbitrage as a production means which could eventually lessen the need for debt accumulation? And might it be appropriate for some activities associated with this institution, to function in a not for profit capacity?

Consider that debt has become too important in the maintenance of consumption roles, instead of capital formation. Societies become fragile, whenever debt becomes expected as a matter of course for basic economic access. However: Since traditional capital no longer provides sufficient societal revenue, human capital now needs to assume a larger role for economic functions, alongside that of traditional capital.

Given the right circumstance, debt formation - for centuries at a time - has proven capable of contributing to, and augmenting wealth. Nevertheless, debt is most capable of doing so, when it is primarily utilized to generate additional output. The danger is when too much debt formation occurs in the limited output roles of non tradable sector activity, as opposed to the traditional wealth creation of tradable sector activity.

The basic problem for debt formation, is when it crystallizes a level of societal expectation which progressively becomes more difficult for all participants to reach. Many people now need the option of utilizing the time they actually have at their disposal, to tend to the production and consumption needs which have been too inefficiently allocated by today's non tradable sectors.

Time arbitrage could make it possible to realize productive gains in human capital, without the extensive risks which are now associated with human capital investment. More of today's knowledge based work needs to be opened up to society as a whole, even though substantial portions of these efforts would not receive "full" monetary compensation.

There's good reasons why the United States was once open to all comers. Many individuals could augment and improve resource capacity, with scarce any need to resort to debt formation, to do so. What people were able to create through the time at their disposal, could readily be shared with others. Immigrants left hardened class structures behind, when they no longer had to resort to debt to build a good life. If debt is left in place as the only means to succeed, where would anyone go today, to begin anew? Why has this connection between debt expectations and hardened class structures not been emphasized more extensively?

Debt is no substitute for economic time value. If growing class divisions are to be overcome, human capital will need to be strengthened, so that it functions well not just in prosperous regions, but in many other parts of the world as well.

Again, would the equilibrium corporation benefit from non profit activity to assist this process? Two elements are possible. First,"centralization" is only useful insofar as it brings together a full range of efforts for new community formation, to illustrate to others what works, and what may not work. Each group and area would have its own unique characteristics, and what is needed most are template possibilities for both social and physical infrastructure.

Another area of possibility is sponsored assistance for individuals and groups which may have either limited exposure to the workplace, or workplace experience that is no longer recent. Often, these individuals may require additional help in their efforts to learn how to generate mutual employment with others. They may understandably be reluctant at first to purchase the time value of others, via their own time value. On the other hand, individuals who come to the process who already have additional resources, are more likely to be able to start the process in ways which would not require outside monetary assistance, to build local communities which can eventually sustain their own local services needs.

Equilibrium Corporate Structure: Why "For Profit"?

This is a reasonable question, since some of the organizational patterns involved, generate access outcomes that are more commonly associated with not for profit activity. However, a substantial portion of such outcomes would also gain formal economic recognition, via new means of wealth creation. In particular, the total time value of all involved, could also contribute to general equilibrium wealth so as to gradually lessen the need for centralized redistribution.

Processes such as this, could eventually make possible a stronger trajectory for long term growth. Indeed: From the early days of this project, I suspected a different designation might be needed, which could transcend the standard definitions of profit and not for profit activity.

Basically, the for profit structure of the equilibrium corporation, can be thought of as including both tradable sector capacity and non tradable sector capacity. The tradable aspect of this institution is more traditional, in that the building and infrastructure components it generates, would also be accessible for surrounding economies.  All equilibrium corporation participants have ownership options for infrastructure and building components, whereas these same materials would be available for other potential consumers as manufactured product.

Whereas the non tradable sector (services) aspect of this organization, is intended for internal use, so as to avoid both debt formation and unnecessary divisions in long term knowledge use and personal ability (I'll try to explain this further in a later post). Time arbitrage would make it possible to accurately measure the internal provision of services generation. By decentralizing knowledge use, the productive agglomeration that is associated with capitalism, would finally gain the ability to expand beyond its currently existing limits. New communities would come to reflect a fuller range of economic
complexity and human capital potential.

While physical infrastructure and building components are somewhat typical "profit territory" for any corporation, it's the carefully managed gains of aggregate time value, which uniquely define the equilibrium corporate structure. With time value as an integral part of final product, societies would once again be able to commit to the widespread use of knowledge, as a major wealth creation factor. No discussion regarding long term growth is really complete, without the consideration of full knowledge use potential, alongside manufacturing and commodity potential.

How to envision what is at stake, in terms of economic dynamism? Imagine, for instance, the economy as a living organism, for a broader framing of perceived monopoly positions. What, exactly, is being "monopolized"? Does that monopoly present substantial access problems for final product, or is it simply a way of defining how organizational capacity for the product, takes place? If the answer is the latter, this form of monopoly does not present a Malthusian problem.

For instance, social media monopolies aren't really problematic, because they have massively expanded a marketplace for communication, at a limited cost to consumers. Therefore, efforts to break up social media monopolies could be counterproductive, since such efforts may not generate substantial differences in marketplace size or aggregate consumer access. Think of platforms for social media as relatively unobstructed arteries, in terms of marketplace size and access.

On the other hand, monopolies in non tradable institutions, continue to present problems for marketplace limitations. While tradable sector centralization often functions as efficient arteries, too much non tradable sector centralization has instead posed as arteries for circulation, when in fact it is necessary to include the work of capillaries for these local economic functions.

Again, remember where centralization can sometimes prove effective, as opposed to where centralized activities have no chance of being effective, especially for apparent monopoly activity. When we think of the economy as an organism, the point is not about a need to further divide arteries which are capable of providing full distribution. What's at stake, is restoring activity to the almost imperceptible, basically lateral flows of economic circulation which have been severely disrupted in recent decades. The equilibrium corporate structure, is one institution which would seek to restore economic dynamism to the capillaries of an economic body.