Wrap Up for July 2018

"Hospitals are one of the very few places left where you encounter the whole span of society."

"Unfair inequality undermines people's willingness to take risks and work hard."

"Like so much in healthcare, the roots of the drug shortage are complex and seemingly without a simple fix."

"The best we can do is to start experimenting with new forms of institutions and build on those that look promising."

Martin Feldstein: When will the U.S. make the necessary changes for social security? Alas, his Project Syndicate article was more on point, than a recent WSJ article which benefited from some corrections from Scott Sumner.

The slowdown in productivity growth predates the Great Recession.

Sometimes when machines replace labour, there are output gains. But not always.

Timothy Taylor is skeptical about cryptocurrencies.

Before auction processes are completely radicalized (or not), more options for practical auctions could be put to use in the here and now.

As it turns out, there is a lot of sand that does not bind well in concrete.

"Contrary to popular opinion, the low rate of unemployment does not signal a strong labor market."

Given the extensive growth of the state since the Constitution was written, a quest for originalists could be mostly wishful thinking.

"The Medicare Hospital Insurance trust fund is projected to be depleted in 2026, three years earlier than estimated in last year's report."

"A radical book would outline a new means of assigning value", however she was defending the value which she believes should exist.

In a sense we're subsiding firms for using machines rather than labour.

An AEI podcast: "Madison, Hamilton, and the struggle to create a national republic."

Don't expect the 1.1 billion people who still go without, to make the jump straight to clean energy.

Artificial Intelligence, as defined by the Stanford Encyclopedia of Philosophy

Josh Hendrickson asks (in Part I), "How Did the Gold Standard Work?"

When are bureaucracies effective?

The community land trust as a low income alternative.

"One thing about markets is you have to bring the participants together."

Why isn't time taken more seriously, as a part of economic theory?

Asking "Is your pain tolerable?" is a good question. For instance, as someone who has dealt with migraines for more than twenty years; what isn't tolerable, is a level of pain that will not allow either rest or sleep, especially at night. Recuperating after migraines takes less time, if the highest pain levels during the event at least allow one to rest comfortably. Oh, and if I were younger it might be good to think twice before sharing this kind of data.

"Housing is eating the world."

Bridges are important for much more than market access to goods.

Instead of increasing the power of the individual, the age of computers has increased the power of the elite. "Most people are actually at a relative economic disadvantage compared with where they would have been 25 years ago."

Tax increment financing is a poor means of urban renewal.

The Fed remains determined to maintain a "floor" system of monetary control.

Why does it take three different experts with advanced degrees, just to repair a foundation crack in the garage? Plus experts aren't always keen on taking the job, unless it's substantial enough to pay well.

Internships as the new entry level job.

What is the secret to happiness once the robots take over?

Forgetting, as a filter for what is actually important.

The "War on Poverty" is over and hardly anyone even noticed. But does that mean individuals with limited incomes are living normal lives?

The Middle Classes: Is There Cause for Concern?

Why are populist tendencies taking hold, especially since middle class income levels have actually been on the increase for some time? This reality could lead to some unusual outcomes in Washington in the years ahead. Hence I'm trying to wrap my head around middle class worries which are encouraging a revival in support for socialism, and even communism in some instances. How would these kinds of responses do anything for the very real structural issues which now limit economic opportunities at the lower end of the income spectrum? What's needed is a bottom up response for economic reform - one which exists independently of top down posturing and blame.

Of course, while plenty of "not to worry" arguments continue to surface from the right, one occasionally comes across support for the status quo, from the left. In "Democracy and Prosperity: The Reinvention of Capitalism in a Turbulent Century" (Feb 2019) (HT The Enlightened Economist), Torben Iverson and David Soskice argue that global capitalism and advanced democracies remain capable of mutual support. The authors are still confident in the ability of democratic states to

continuously reinvent their economies through massive public investment in research and education, by imposing competitive markets and cooperation in the workplace, and by securing macroeconomic discipline as the preconditions for innovation and the promotion of the advanced sectors of the economy. Critically, this investment has generated vast numbers of well paying jobs for the middle classes and their children, focusing the gains of "aspirational" families, and in turn providing electoral support for parties. Gains at the top have also been shared with the middle (thought not the bottom) through a large welfare state. 

Contrary to the prevailing wisdom on globalization, advanced capitalism is neither footloose nor unconstrained: it thrives under democracy precisely because it cannot subvert it. Populism, inequality, and poverty are indeed great scourges of our time, but these are failures of democracy and must be solved by democracy.

While such observations are encouraging, are they still convincing? The fiscal burdens of many nations have changed in ways which now inhibit meaningful centralized approaches. What's more, the structural nature of secondary markets in relation to primary markets, has led to a reality in which institutional support for knowledge based endeavour reached a tipping point, towards the end of the last century when it reached the height of its trajectory.

Consequently, the preferred means by which middle classes have been structured, has in turn created its own limits. Yet one reason this also creates a barrier for lower income levels which seek to improve their lot, is the fact too much non tradable sector activity has been generated with mostly middle and upper income levels in mind. Other than domestically produced food and commodities, much of the tradable sector activity which benefits lower income levels in advanced economies, derives from international trade - especially emerging economies. Yet even though advanced economy markets experience hard production limits, education is still treated as a panacea, despite the fact production/employment platforms have been limited by design.

Also consider the above quote regarding the fact gains have been shared with the middle but not the bottom. The relative rise of the middle classes, has also translated into a harder fall for lower income levels. In all likelihood, much of today's populism derives from the fact that a hard fall from the middle class is no longer simple to remedy. Indeed, of all the economic differences I've noted in recent decades, this one stands out the most, since I had little cause to worry about "bouncing back" from economic difficulties throughout much of my adulthood.

Too many rungs have indeed been pulled away from the bottom of the ladder, however thus far public policy is going about it the wrong way. Those rungs represent missing production possibilities, particularly at the lower end of the income spectrum. While democracy is an important consideration in all this, centralized democracies aren't equipped to address these issues in a top down manner.

How, then, could democracies play meaningful roles? Direct democracy via the use of time as an economic unit, could create decentralized local markets which generate a full range of services potential for lower income levels. While there's still cause of concern for the middle classes in terms of overextended governmental budgets; allowing lower income levels to generate new wealth, would eventually relieve budgets for which all income levels bear responsibility. Ultimately, bottom up solutions are likely to be a lot more effective, than the tired rhetoric of top down approaches which simply weren't built for the structural changes we've experienced in recent decades.

Time Arbitrage as Direct Ownership Reciprocity

How might time value - as an operational unit of economic wealth - function in a different context from for profit and not for profit institutions?  Even though time arbitrage would hold less monetary value than minimum wage, this seeming drawback is offset by the fact time value would serve as direct ownership reciprocity. It's the direct negotiation capacity that time arbitrage could lend to local environments (including real money/time wage effects), which would gradually build up the economic viability of time aggregates in relation to monetary aggregates.

Consider why this is important. While now existing forms of corporate ownership are quite functional, they mostly serve as indirect means of ownership reciprocity. For instance: If corporations don't appear to have a lot of social responsibility, shareholders also mostly lack real responsibility to the corporation, for that matter. Still, this form of ownership is so flexible, that it's standard for average citizens to have corporate earnings as part of their retirement accounts.

What's also needed, are flexible ownership arrangements which include a more direct form of reciprocity. This would allow participants the economic option of being directly accountable to each another in local settings. It's clearly not an approach that would suit everyone, yet it could provide tremendous benefits in terms of newly created ownership capacity. Such options are particularly important, if non tradable sector activity is to become more viable in terms of ownership and production opportunities for lower income levels.

Indirect forms of ownership such as shareholding, are particularly logical when corporations can benefit from increasing gains from scale. Increasing gains of scale are not only important for long term growth, but for the discretionary social options of not for profit institutions - given their secondary market status. Importantly, when markets are increasingly shaped by special interests protecting product that doesn't scale, the lack of overall scale potential can mean less general equilibrium revenue is still available for non profit operations over time.

I felt the need to reflect on these basic aspects of capitalism and ownership, after coming across some articles in which the authors expressed solidarity with the rationale that capitalism "can't last forever". They may as well have said "good riddance"! Nevertheless: Again, how would we propose to rid ourselves of these reliable constructs, without carefully thought through institutional replacements - particularly those capable of taking the (presently negative) service sector effect on scale into account? Of course I'm starting to sound like a broken record, but could we instead build new institutional structures which also provide scaffolding for the wealth creation we already have in place?

Bryan Caplan emphasized something recently which also encouraged me to write this post:

Perfect competition is socially optimal in industries with constant returns to scale.

It's difficult to recall when I've come across a quote which so simply expresses the rational for time arbitrage, in terms of time based product. When monopolies are formed in markets which generally exhibit constant returns to scale (such as time based product), over time the initial error will compound, as societies bear more more of the burdens for quality product costs. In the process, knowledge dispersal and resource efficiency can be compromised as well.

Since time based product features constant returns to scale (automation changes product structure and is a different matter), we need options in which time arbitrage can function as small forms of competitive equilibrium. This would allow individuals to negotiate preferred time options in direct relations to others. Perhaps one might refer to this form of organizational capacity as time profits, in contrast with for profit or not for profit institutions. Unlike time profit activity, most for profit and not for profit organizations will likely always function in a close relation to the total resource capacity of general equilibrium conditions. Indeed, their organizational structures are often more similar than is sometimes acknowledged.

This subject matter deserves a lot more elaboration than I'm able to provide today. However, I will return to these thoughts as soon as I'm able to wrap up work which covers the earlier phase of this project. Presently the first book of the upcoming series is demanding my full attention. Some of what I touched on in this post, will be further developed in the third book of the series.

Nostalgia for the Past? It's Not the First Round.

Have people the world over been "seized" with irrational nostalgia? In "The Global Nostalgia Epidemic", Edoardo Campanella writes:

Surveying today's world, one might well conclude that it is increasingly trapped in the past. Many people across Europe and North America believe that life was better 50 years ago...Whether the problem is rising inequality, economic stagnation, or technological disruption, nostalgia offers relief from socioeconomic angst. But far from being innocuous, infatuation with a mythicized past is shaping our politics in dangerous ways, not least by creating fertile ground for jingoistic leaders who are happy to exploit nostalgia for their own ends.

I'd like to suggest that this is only the latest round of sentimentalism, for a time when one's personal efforts in the economic domain were generally more likely to generate rewards. Hence for baby boomers such as myself who ended up leaving the workplace too soon, cultural battles can seem as though a belated national reaction, to the hollowing out of economic dynamism in far too many local communities.

However I disagree with much of the polarized political response which has emerged. Thus far, political posturing offers no real solutions for the fact the center can't hold, given its excessive reliance on the institutions which no longer have room for all comers. Nevertheless, that doesn't mean that capitalism or governments have "failed", only that their present organizational capacity is insufficient to move forward into a more dynamic future.

My own nostalgic attempts for retail based self employment began in the early nineties. That's when baby boomers such as myself, discovered that office work with benefits was a declining option, for many without college degrees. In retrospect, those baby boomer hopes for Main Street retail locations, were ill fated from the start. So what, them, prompted too many of us to make losing bets with our capital investments, knowing full well the extent of mom and pop businesses already facing displacement by chain stores?

Put simply, there were too few other economic options, for individuals who wished to continue engaging with others locally. Imagine for a moment, former office workers abandoning "ships", but the most obvious local option (without a college degree, for work that wouldn't be too physically demanding as one aged) was one's own Main Street business. In other words, with a little luck on one's side, retail opportunities appeared as though nearby "ships" which could still be boarded successfully.

That initial round of nostalgia, was also part of what capitalism had provided for so long, via the earlier dynamism of tradable sector activity. Barring other business opportunities, one might instead recapture the sentimental Main Street memories of a baby boomer childhood. Despite the extensive investment losses many of us ultimately endured, this seemingly "dumb" response to unemployment, was a lot more benign than what is playing out in the present.

For anyone who was "shipwrecked" after the loss of once reliable office work, the hope of course was that other nearby ships weren't "taking on too much water" to stay afloat. Even though many local Main Streets were under threat, where were the other additional ships (local institutions) designed so as to lend certainty to local commitment and investment? Indeed, some structural problems which contributed to the Great Recession were probably temporarily delayed, as many baby boomers continued as long as possible - often a decade or more - investing in small business capital, which could hopefully allow one to coast to retirement.

One reason this societal struggle has finally moved to a cultural level (where little good can be expected to occur) is that no new institutional frameworks were explored at local levels - decades earlier - when it mattered most. Indeed, nostalgia for the past is rational, when societies don't create new organizational patterns that provide possibilities for a better way forward. What's not rational, is the impulse to destroy previous still functioning institutions just because they can't be all things to all people. Hopefully we can bring down the cultural battles a few notches, so as to explore the possibility of new institutions that prove worthy of the risk and commitment of those with the courage to believe in them.

Focus on the Whole. Why Isn't it Sustainable?

Instead of seemingly endless cultural debates about our differences, why not focus on the "whole" of our economic reality. Why has it become so fragile? Let's get to the bottom of this. We also need an understandable framework for structural issues (especially debt formation) at a macroeconomic level, so as to make a well reasoned economic response. Populists, with all their inconsistencies and wrecking ball proclivities, will only become more popular in the years ahead, if we can't get real about structural problems that are beginning to undermine too many aspects of our organizational frameworks. Many of our institutions are aligned in ways that existing revenue won't be able to maintain, much longer.

Of course, facing up to reality involves combined political efforts where overstretched budgets are concerned. Otherwise, explaining the bad news to one's constituents and taking the appropriate action, means a likely removal from public office in short order. However, so long as neither party dares to have honest conversations with the public, it will only become more difficult for governments to follow through on their promises, in the years ahead. Why not save face now, while it's still possible to do so? If our fiscal affairs aren't carefully managed in the years ahead, they will certainly unravel in ways that cause more pain and hardship than should be necessary.

In the meantime, elected populists are giving in to the temptation to stress political "gains" which are mostly figments of the imagination. Once governments give up on promoting new forms of wealth creation, and instead struggle instead over still existing revenue flows, there's little time left to lose for a meaningful response to systemic burdens. Even though the Great Recession provided a "warning shot", most economists have been slow to encourage new forms of wealth creation which requires less debt to take place. Economists have an important role to play, in promoting more diverse means for generating wealth. Otherwise, policy makers and the business elite aren't necessarily likely to take such options seriously.

Despite the fact some structural problems aren't amenable to centralized reform, there is much that could be accomplished through experimental versions of decentralization at the margins. It's particularly important for instance to address the reality of wage divergence, so that future forms of social and physical infrastructure can reflect these realities. Perhaps such efforts could take the form of production reform zones, for the use, application and preservation of knowledge.

Rather than taking a wrecking ball to global wealth, as some populists are seemingly inclined to do, why not try a "blank slate" approach in local environments where the results can be observed. By way of example, perhaps some outmoded organizational methods even deserve a wrecking ball: No one in their right mind, today, would build Department of Motor Vehicle offices (HT Marginal Revolution) where people have to stand in line a full day (or more) in hopes of securing an appointment. Instead, for individuals who still have the patience and fortitude to drive, why not simply allow them to split the time required with others who could locally maintain digital databases which take care of whatever registration citizens actually deem necessary. The use of our time as a completely accountable "tax", would serve as an important vote for such processes. There would be no cross subsidies, with our time as a recognizable percentage of a local "tax" base. Alas, whenever we allot tax dollars to government and/or special interest activities performed on our "behalf", too much of the revenue gets diverted to competing claims. In these instances, the extremely fungible nature of money works against us.

It's time to create simpler means for going about our days and getting things done. Meanwhile, too many aspects of life are being subjected to the wrong kind of complexity. Even though it's no longer feasible to build bridges across political divides for budgetary needs as they currently exist, ultimately, we could dramatically change many organizational patterns which governmental budgets are expected to support. With a little luck, technology, innovation and local experimentation can create a more sustainable whole for all of us, before populists have the chance to tear the existing whole apart, piece by piece.

Associative Time Value as a Source of Continuity

Associative time value in the context of this post, refers to value in use functions which have naturally occurred in the past, particularly among groups which share similar identities and common interests. Some of these settings have fostered divisions of labour which hold cultural meaning, as well. Of course, much of this activity has been largely displaced by value in exchange functions - especially in developed nations.

Value in exchange activities provide considerable societal coordination and knowledge use continuity, but not to the extent one would expect. What's more, governments often aren't well situated to coordinate vital services - particularly those out of reach of lower income levels. Which is just one important reason why - ultimately - production rights for knowledge based services shouldn't be limited, as they are today.

Nevertheless, present day institutions are too siloed, to provide continuity in the form of value in use settings for the preservation of knowledge. Unfortunately, value in exchange activity lacks some of the "glue" which binds a civilization, if and when systematic burdens become pronounced. For one, extensive knowledge use now occurs in rival context, especially when it is directly aligned with the value of knowledge intensive time based product.

Today's schools are a prime example, of institutions which hold only limited associative group time value for lifelong continuity and knowledge preservation. Formal educational roles - in spite of their appearance of local community continuity, are mostly extended to those who are not yet adults. And while formal religion is one of the few remaining local institutions which still encourages multi generational participation, its value in use societal functions are by no means as extensive, as they were in the past.

It would be difficult to radically change the definition of formal schooling for the better, without a recognition of the need for lifelong knowledge use continuity, and the voluntary mutual assistance which makes it possible. Any learning institution worthy of the designation, needs to preserve spontaneous associative time value to the greatest degree possible. Without the continuity in knowledge preservation that spans generations, communities end up supporting young students time and again, only to watch them go elsewhere in search of horizons where economic prospects appear more promising.

Knowledge use exclusivity now contributes to losses in economic stability as well; since supposedly, only those with the "best" skills sets need apply for an increasing degree of economic participation. However, this "perfection" imperative could make our institutions more fragile, as it becomes difficult for ever more citizens to take part in their active support. We need new ways to tap the tremendous amount of wealth creating capacity, which largely exists in a medium skill range. After all, there's no logic in assuming that the bulk of future prosperity could - or should - derive from workplaces which utilize mostly extremes in skills use potential.

So long as individuals hold sufficient production rights, they have a real chance to contribute to societal continuity and economic stability in their own environments. Much of today's institutional fragility is due to the fact that governments and special interests alike have excessively benefited by reducing the production rights of the average individual. Hopefully, many of these lost production possibilities will ultimately be restored, so that average citizens will - once again - be able to resume their own unique roles in the continuity of knowledge preservation.

Employment vs Staked Claims on a "Material" World

Now that the Walmart effect is also "forcing prices down" in India, Tim Worstall reminds us how this process is ultimately for the good. However, in "The Benefit of Killing Jobs" he asks:

But who should we be supporting here? Clearly, our innate prejudices are in favor of the small operator, that struggling family business, as opposed to some monster of late stage capitalism. We could further believe that a thriving community of sturdy independents is more valuable to us than some mere reduction in the prices of diapers or milk. 

But that's not the point here, nor is it what makes us richer. Economics advance is about using less labor to do any one task. This is why we obsess over productivity. It's not so that we can gain more from the same amount of labor either. It's so that some labor is freed up to go and do something else, which is the important matter.

Nevertheless, too many of our productivity gains continue to break down, at the level of total factor productivity. As some individuals continue to lose jobs, others are increasingly tempted to enhance their income through the revenue gains of more recent productivity advances. Carried too far, it's a process which could eventually undermine our structural mechanisms for societal coordination.

When local jobs are lost, this often translates into diminishing local service capacity as well. Much of the obsessing over productivity accomplishes little, when price makers (many of whom function beyond the Solow growth model) reduce aggregate productivity gains which could have contributed to a higher standard of living. Chris Dillow also responds to Tim Worstall's article, and he sums up:

...technical progress and destroying jobs are not sufficient to achieve good economic growth, even where markets are functioning well.

While I agree with Dillow insofar as this sentiment is concerned, how does it relate to his broader perspective, re future employment potential? For example, in what context do we express concern about "losers", if the world has supposedly experienced "enough" material growth? Who still gets a "living" wage, if growth ceases in its tracks and other revenue has already been claimed? In his post, Dillow references Daniel Cohen, the recent author of "The Infinite Desire for Growth", where materialism is questioned in the Amazon review for the book:

a future less dependent on material gain might be considered and how, in a culture of competition, individual desires might be better attuned to the greater needs of society.

What exactly is being implied, by pining for a "less material world"? Who is actually getting a chance to compete for life's wants and needs? Indeed, all is not quite as it appears in this regard. Materialism, like so much present day conceptualization, suffers from a moralistic framing which makes it difficult to approach the issue rationally.

After all, many forms of valuable knowledge are also essentially being hoarded, so that citizens lack the ability to compete in terms of skills production and presentation. How is knowledge hoarding any different from material hoarding, especially if material hoarding proceeds are used to compensate knowledge hoarders? Individuals whose time value seems off the charts in relation to others, are still being compensated via the revenue potential of countless material things. One of the best examples I've come across, is the extreme volume of sales necessary in a hospital thrift store, before sufficient revenue is collected to pay for a mere fraction of human capital value in hospital procedures.

For that matter, material hoarding can be likened to the "lesser" challenges of our natural inclinations for personal arbitrage. Alas, much of what we bring home, can seem more valuable than the extent to which our time may be perceived by others. Yet when we are confident regarding our time value in the workplace, our discretionary time is more often spent in the pursuit of collecting the memories of experiential product. But what about those whose time value has been prejudged and deemed not necessary for 21st century intellectual challenges? Will we further suggest that their junk collecting challenges should be tossed as well, in a less material world?

Is it possible to be a little less hypocritical? When anyone demeans an "infinite" desire for growth, is this imaginary cap expected to extend to the growth possibilities of the human spirit? Why not promote a world that actually needs less materialism to pay its intellectual bills? And above all, let's not assume society should determine the nature of desire and the greater good of all concerned, on specific one size fits all terms. Instead of attempting to hand out consolation prizes to the excluded, find ways to include them, through value in use means. It's one thing to take advantage of a material world for one's own extensive value in exchange benefits, but altogether another, to assume that is the only kind of world that is feasible.

Musings on Disequilibrium and Democratic Dictatorship

What to make, of more nations seemingly guided by a single dominant political "will"? Simon Wren-Lewis recently noted that China is okay with democratic dictatorship, and he asks, "Could the U.S. become a democratic dictatorship?" What about Trump's admiration for dictators, for instance? Is it naive, to hold out hope that more flexible forms of democracy can endure?

Nevertheless, many present day political struggles are largely due to limits on fiscal options, in a time of growing budgetary burdens. Few political parties are willing to concede defeat on earlier expectations, and meaningful fiscal reform appears less likely than ever. During the centuries when governments benefited from tradable sector dominance, opposing parties tended to have more fiscal room for their revenue preferences. However, once non tradable sectors begin to dominate, fiscal options gradually became more difficult, and disequilibrium became more pronounced as well.

Once budgets get out of control, fewer high skill activities can be reliably maintained as revenue dependent secondary markets, especially when firms and organizations are subsidized via price making terms. Since much of the budgetary fallout takes place as local examples of discarded government programs or "insufficiently subsidized" private firms, one doesn't always notice the effects of cumulative losses which in many instances are just reported locally.

It can be easy to rationalize that many government programs or businesses "deserve to die" if they can't support themselves. However, included in these losses, are more basic knowledge use frameworks which are slowly being displaced, even as they otherwise often lack suitable economic representation. Indeed we lack a coherent national story line, for the reality of what is being systematically discarded on a regular basis. Hidden in a myriad of examples, are some areas where government imposed austerity can be a particularly poor default mechanism. Importantly, budgetary losses at the margins, also translate into cumulative losses in trade volume for the use of knowledge and skill.

In other words, cutbacks in skill and applied knowledge are among the hidden effects of monetary disequilibrium. Even though output and employment may appear consistent, losses in the trade volume of potential human capital still deserve to be taken seriously. These losses can't be directly observed, however, and they lack suitable statistical framing, other than reductions in labour force participation which tend to be chalked up to demographics and other random factors. Many such losses in trade volume are instead experienced at a personal level, whereby individuals (all along the income spectrum) increasingly resort to doing things for themselves, instead of relying on market options.

Oddly, this unfortunate result is akin to a preindustrial state, for many time and place oriented services never fully shared in the opportunities of tradable sector prosperity. How might one think about the monetary aspect of this problem? Nick Rowe writes:

I think it's all about the role of money as Medium of Exchange. Which makes general equilibrium, and general equilibrium when some prices are "sticky", very different from a barter economy or one with a central Walrasian market where any combination of goods can be swapped with any other combination of goods by all agents meeting simultaneously in one big market.

Indeed, we especially observe disequilibrium in markets where space and time scarcities are closely correlated with product volume. Price making in these sectors, has much to do with the sticky wages which play havoc with general equilibrium conditions and trade velocity. At least to some degree, skills centered price making is responsible for a reduction in total economic value, among those who lose the ability to fully participate in economic life. Small wonder many politicians are now tempted to "dictate" the knowledge use settings they prefer, in misguided attempts to amend budgetary realities.

Are there reasonable microeconomic approaches, for today's macroeconomic problems? So long as nation states hold sway, a deeper macroeconomic understanding on the part of all concerned will be necessary, if budget realities are to be meaningfully addressed. Yet in all of this, fiscal policy can only be rectified, with supply side structural change that links our microeconomic circumstance with our macroeconomic realities.

At the above linked WCI post, one commenter observed: "Your explanation is strange. Money is brought in to help trade then you immediately start talking about it hindering trade." Rowe responds:

I wasn't clear enough. Money helps trade But when money is not working well, it doesn't help trade as much as it should, even though it still helps, because barter is (usually) even worse. Some trades don't happen.

And Rowe understood the frustration of another commenter who suggested micro was what mattered, while macro "should" simply be tossed! Nevertheless - macroeconomic confusion notwithstanding - without macro it would be impossible, for instance, to decipher how Say's Law could apply to the fullest extent in a monetary economy.

The monetary relationships of macroeconomics are important. Without sufficient understanding of those relationships, nations stand to lose many of the discretionary choices which are so closely tied with the output potential of tradable sector activity. Since product which is time and place bound cannot multiply, many of these forms of activity are mostly discretionary in the sense of coordinated choice sets among individuals and groups.

Representative democracy was largely made viable by the prosperity of tradable sector activity, and this process continues for emerging nations as well. However, democracies unduly burden their citizens, when too many local preferences for non tradable sector frameworks are imposed at national levels.  Ultimately, local settings are the best options, for the forms of democracy which seek to determine the nature of product with connections to time and place.