Sunday, November 26, 2017

Time Value as a Core Economic Principle

When asked to define basic economic principles, one of the first things that might come to mind for an economist, is efficiency in resource use. According to Investopedia:
Economic efficiency implies an economic state in which every resource is optimally allocated to serve each individual or entity in the best way while minimizing waste and inefficiency. When an economy is economically efficient, any changes made to assist one entity would harm another. In terms of production, goods are produced at their lowest possible cost, as are the variable inputs of production.
Given this rationale, why has the resource of our time been exempted, in so many instances? In contrast with other resource capacity, the time of many citizens is poorly utilized - given what is manifestly possible. Perhaps the fact economics is still such a young science, accounts for the fact that our time management efforts in the workplace have yet to fully adapt to the time use preferences of others. After all, the time at our disposal for interaction with the world, is the most important resource we hold in common.

Presently, we are not even close to full coordination and effective time management for all concerned. Even though some of us are able to successfully manage our own time, we need opportunities to do so which take the optimal time management of others into account as well. The struggles that many face in coordinating mutual efforts for mutual obligations, has generated substantial political burdens. Even so, too many policy discussions take place as if the marketplace were operating efficiently for time based services provision.

Consider the Investopedia argument re efficiency, for instance. Some physicians will reason that "changes made to assist one entity would harm another", specifically referring to how changes to help patients would burden a doctor's time priorities and create additional monetary burdens for taxpayers. While this argument is superficially correct, there's more involved, since the time value of physicians and citizens was not generated via a common time resource equilibrium. Granted: It's not logical for anyone to insist that government "force" others to provide special skills on their behalf. We simply can't insist on "rights" to the time or skills capacity that others possess. But likewise, no knowledge provider should insist of government that certain skills be exempted from the possibilities that individuals might pursue via their own time and resource capacity. 

Governmental impartiality for personal freedom and skills production needs to extend to all citizens, if valuable knowledge and skills are to be sustained and preserved for the future. When production and consumption provision are confused in any supply and demand model, the result is lost efficiency, for governments and citizens alike.

Nevertheless, the efficiency that individuals seek via time based product, is essentially different from the divisions of labour in which efficiencies are management driven. When final product includes personal interaction, time compensation need not be solely an institutional cost. When time purchases time, the nature of its use becomes more effective as a cost that individuals elect to personally manage, through mutually agreed upon divisions of labour. For the time based product of time arbitrage, time efficiency would derive internally and organically, from shifting preferences on the part of all involved. Time based product is multifaceted, and its efficiency is not so much a specific product outcome, as an experiential voluntary exchange between individuals.

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