Does Cooperation Lead to Greater Inequality?

In a recent Marginal Revolution post, Tyler Cowen appreciates "the virtues of greater cooperation" but adds, "Be careful what you wish for!" In some respects, it appears that more cooperation among participating groups could actually lead to greater levels of inequality. For instance, Cowen noted how high skilled individuals gain more benefits from mutual cooperation, than those who utilize lower skill levels in the workplace. Another oft cited example of late, are growing levels of inequality between different firms. How might one think about this conundrum? Could cooperation turn out to be just another expression for the wealth capture of collusion, or the exclusive nature of tribalism?

Fortunately, mutual coordination is too basic a human survival instinct, to be associated solely with either positive or negative outcomes. Plus, the references in Tyer Cowen's post were somewhat broad, in that his examples were more indicative of correlation than causation.

Nevertheless, when it comes to apparent inequalities, much depends on the extent to which specific resource coordination can disperse beyond directly participating groups. And since our time is naturally scarce, so too is time based product. Indeed, the only way to multiply high skill markets for time based services generation, is to invite more participants to the process. Otherwise, mutual cooperation in supply side chains which are limited by design, will only continue to exacerbate existing inequalities.

Until now, tradable sector dominance has proven far more capable of spreading wealth in societies, than has been the case for non tradable sector time based services. However, with time as a component of economic value alongside money, this problematic sectoral imbalance could ultimately be addressed. Time arbitrage would also be able to address the human capital investment problem by greatly lowering its costs. Presently, high human capital investment costs have become difficult for society to carry, since many time based services are reimbursed via debt and tax based redistribution.

Granted, the coordination potential of time arbitrage can't change the underlying problems of limited non tradable sector revenue. After all, the scarcity of time based product translates into aggregate output limits for these activities as well. What time arbitrage could create, however, is greater accessibility to services marketplaces in terms of production and consumption. One reason this ultimately matters so much for existing inequalities, is that millions now need a high income level just to access basic - yet vital - skilled services. In short, there are organizational means whereby mutual cooperation could create greater equality for all skill levels, once time value gains validity alongside monetary value.