Post Highlights From 2018

Here are highlights for some of the more popular posts of the year.

The Productivity Challenge of Our Time  Occasionally, what may be difficult to decipher, really needs to be understood just the same. This has certainly proven true for the shifting realities of productivity in modern day economies. While there have been tremendous productivity gains in recent centuries, we have nevertheless experienced a major shift (in terms of GDP), towards product which lacks the ability to scale in a normal sense.

How to make certain this shift doesn't ultimately reverse previous gains? We need to organize resource capacity differently, for products and services which have limited ability to scale due to connections with time and place. Fortunately, scale potential can also be envisioned in ways which go beyond monetary and traditional output gain, especially via the compounding interest possibilities of human capital and knowledge dispersal.

Debt as a Factor in Output and Productivity  When does new debt function as a source of increased output and growth gains? It's important to know whether new debt can do this, or instead represents yet another nested claim on already existing resource capacity. While such claims are realistic and to be expected up to a certain point, they begin to detract from total factor productivity, if they extensively offset debt formation which generates new wealth on more direct terms. While some debt will continue to function mostly as a way to shift existing resources and revenue, we still need to ensure that - at a macro level - sufficient space remains for debt which serves as a source of direct wealth creation.

Can AI Reduce the Burden of Human Capital Investment?  Artificial intelligence has evolved to a point it could now reduce the time which has been necessary for the accumulation of high skill human capital. But is this a result which high skill workers will actually be able to accept, especially given the fact their human capital value is monetarily reflected in their overhead costs of their own working environments? Plus, should artificial intelligence assume some of the duties of applied knowledge, this ultimately affects the valuation structure of formal education. Nevertheless, the more that AI is applied, the less overhead costs will be necessary in the future, in order to get things done. Hopefully, this organizational positive will be put to good use for all income levels.

Are Long Term Budget Issues a "Lost Cause"?  Despite my reservations about his approach, Paul Ryan was one of the few in Washington who recognized what was at stake, regarding long term budgetary issues. How long before these issues surface in ways that create real problems for the economy? It's time to unleash the full potential of human capital, and go well beyond the service structures which the "best of the best" currently generate, so that new social safety nets might emerge which contribute to wealth creation, instead of further budgetary burdens.

Service Sector Dominance vs. the Solow Residual  Why does service sector dominance detract from the long term gains which normally accrue from the Solow Residual, in product which is normally capable of scale? The main problem - especially insofar as it impacts long term budgetary issues, is the social choice between immediate economic reciprocity, and deferred reciprocity for services generation. Too much service sector activity presently takes place as deferred reciprocity - a cycle which not only increases future debt loads, but does so with uncertain near future revenue streams. This impacts total factor productivity, and by extension, reduces standards of living even if in an indirect or relative sense.

Left unchecked, services formation as deferred reciprocity, can negatively impact the prosperity which normally accrues from the Solow Residual. Whereas immediate reciprocity (via time arbitrage) could build new services wealth which would not make demands on existing resource capacity. Over time, immediate reciprocity in services could once again increase the value of the Solow Residual, for the cumulative benefits of product which scale at a macro level.

Resource Flexibility Requires Investment Flexibility Are there circumstances in which yearly property auctions might be beneficial? Perhaps a land auction concept might prove more useful as a means of time centered coordination, where property location is at issue for economic activities which transition during the course of a year. Nevertheless, flexible building components would greatly reduce the risks associated with long term investment strategies in this regard. Not only would flexible building components make it feasible for individuals with limited income to function normally, this economic option would also encourage people at all income levels to build wealth incrementally, via low risk ownership strategies.

The Importance of Personal Autonomy  Among the most crucial aspects of economic freedom, is whether we are actually able to influence and produce for our own local environments. This necessity holds not only for services diversity, but also the ways in which we transform local resource capacity to augment living and working arrangements. When we are able to maintain basic production rights in this regard, our consumption is positively augmented, so that no income is too small to tend to our most basic needs in life.

Empathy, AI and the Knowledge Factor  One problem with skills arbitrage, is that certain skills are in such high demand in the workplace, these individuals often face severe constraints when they are expected to fulfill other societal responsibilities which involve the use of their time. This has become increasingly true for empathy as a societal expectation, as well. What if robots or artificial intelligence could mimic empathy? While our first inclination may be to think of this possibility as extremely sub optimal, consider what individuals who are starved for attention, might actually prefer: "caring" artificial intelligence, over little or even no empathy from actual people.

The Middle Classes: Is There Cause For Concern?  Perhaps insofar as the middle classes seek to shape their environments beyond what can be reasonably paid for. The preferred means by which middle classes have been structured, has in turn created its own limits. If so, how are lower income levels expected to effectively participate? Non tradable sector activity in particular, has been mostly constructed with medium to high levels of income in mind. A dynamic grassroots approach would create new economic opportunities and participation patterns for those with the least amount of income.

Does Price Taking "Deserve" Production Rights?  Time arbitrage would function as a form of price taking for services generation at local levels, and artificial intelligence could boost local skill application where necessary. Importantly, price taking isn't a feasible economic option for high skill services generation at national levels. However: Should nations begin to experience problems compensating high level skill, the most dangerous consequence is "brain drain". It's the loss of valuable human capital to nations which are better able to pay, that might be just the incentive nations need, for assigning stronger production rights to citizens who can work with applied knowledge via equal time coordination.