Experts often warn that we are soon going to run out of a natural resource. If so, then we might expect an increase in price which encourages conservation.What if the impulse to conserve comes well before the price rises? Consider how markets for time value in high skill services, essentially took this approach in the 20th century. Still, even though augmented time value (which includes extensive human capital investment) can be priced at a premium, many forms of time value haven't been factored into the same general equilibrium equation. Consequently, supply side conservation of special skills capacity, may come at the expense of supply side potential for markets as a whole. Clearly, some disequilibrium circumstance is due to artificial scarcity, which may ultimately result in an incomplete market equilibrium for time value.
Presently, the resource potential of aggregate time value appears less promising than should be the case. For many individuals, the total value of their employment potential (working time hours) is insufficient to compensate the service product they may need from existing service markets. These limits in coordination capacity have meant unnecessary production losses and arbitrary supply side limits for markets as a whole. Given the growing demand for high skill services, immigration controls are now the latest prominent "conservation" efforts. As fully compensated time value becomes hoarded by the relative few, more nations are convinced that the time value of millions is insufficient to make their potential contributions worthwhile.
On the other hand, natural resource capacity other than time value is more likely to experience conservation efforts after periods of marketplace abundance and accessible pricing. Time as resource has suffered from imposed artificial scarcities to such a degree, it's difficult to contemplate the fact of its real scarcity for all concerned. Hence the confusing framing of actual resource potential for time value, makes it difficult to build dialogue for a more realistic approach to human capital and applied knowledge conservation.
Sometimes the best way to overcome the problems of market limitations - whatever their cause - is to simply create a new approach for production, altogether. In the above linked post, Scott Sumner goes on to note how aquaculture proved to be much more than a response to high prices, since it also created market solutions for the seemingly intractable problem of overfished oceans:
In many cases, however, that price increase unleashes a new and unforeseen alternative supply. Consider the fishing industry which used to rely on fish caught in the ocean.He then highlights a graph showing that while capture production peaked in the mid-1990's, there was a considerable rise which was completely attributable to aquaculture. The difference? Capture production was slightly less than 100 m tonnes in 2015, while aquaculture increased total production for that year to approximately 175 m tonnes.
One can also imagine "fish caught in the ocean" as comparable to current service provision expectations in general equilibrium budgets. Many of these "overfished" expectations for applied knowledge are in need of a more concise, locally organized approach. Since aquaculture exemplifies a locally managed setting, it can be likened to a defined equilibrium, much the same as human capital with a potential for local development.
Like aquaculture, time arbitrage could build new resource capacity which exists independently of what the "ocean" (general equilibrium) continues to supply. And like aquaculture, time arbitrage might ensure that more human capital resources become part of the harvest. After all, when time resources are already scarce to begin with, why should aggregate time value become even more scarce due to human capital potential which is still being thrown overboard? With a little luck, markets could still find a better way for the future of services generation.
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