What We Can Do, What We Can't Do

New years are a good time to reflect on life's possibilities, especially when it comes to societal progress. Nevertheless, how do we distinguish between realistic potential, versus what is essentially wishful thinking? For example, even though the world needs a lot more mutual respect and civility, desired outcomes such as these cannot be coerced. 

And while Adam Smith and many others celebrated the free markets which so contributed to civility in recent centuries, much of this fortuitous societal coordination takes place in tradable sector activity. Still, it's not unreasonable to ask: Could our non tradable sector markets also contribute to greater civility? How might they gain their own newfound freedoms? In particular, is it feasible for the resource of our scarce time, to garner more economic and societal value in the near future? Or will vital markets for time value, remain outside our realm of direct influence?

In the twentieth century, housing and time based services were regulated in ways which reduced the degree of autonomy and control individuals held over their own destinies - particularly those with substantial income limits. If millions were to regain control via new production and consumption potential, how much civility might we all regain in the process? At the very least, we still benefit from the civility which goes hand in hand with high levels of tradable sector resource coordination. And while we will never put a stop to what's bad in the world, we could still create more good, by allowing symmetrical (hence reciprocal) coordination of time via market tested means. Time arbitrage is one entry to this realm of possibility. It is a broad spectrum approach for improving personal autonomy and self worth, with potential to bring new hope to people from all walks of life.

With additional economic value for mutually coordinated time, millions more citizens would derive a greater sense of self worth. Consider one important reason why this matters. So much in the world which is unfortunate and destructive, includes the reality of poorly defined self worth. How can we expect people to be trustworthy or unfailingly good to others, when their time use potential lacks sufficient economic value to build a normal life? Granted, not everyone would personally benefit from stronger markets for time value. Just the same, millions more would finally learn to effectively negotiate with others for their wants and needs. I believe that gaining the chance to do so, would result in fortuitous circumstance whereby people are more inclined to be kind and civil. 

Even though the passing years have given me cause to excessively dwell on what can't be done, I still believe we are not helpless to act in positive ways. Clearly, we have reason to do so, when the evening news also dwells on what we seemingly cannot remedy. While there will always be instances when no one can decipher personal motivations for violence and hatred, there will still be positive ways to respond. Sure, some market efforts are going to fail, sometimes even miserably. But I continue to believe that viable and carefully representative market platforms are the best means we have, to build a better, more inclusive future. Plus, as Ricardo Hausmann recently noted in "The Missing Link in Economic Development":

If someone is not doing something that we as a society value it might be because they can't, not because they don't want to. This weakness in economics has far-reaching implications for our understanding of economic growth and development, which is fundamentally about the social accumulation of productive capabilities.

Markets should not be so willing to devolve, into a twisted rational of what societies supposedly can't do. When they become rigid and inflexible, does anyone really wonder why capitalism gets disparaged? Why not work to ensure greater freedom for our vital domestic markets, so they might better contribute to human civility and hope for the future? Why not 2021 as the perfect place to begin? Lets turn our non tradable sectors into realms where we regain hope for what we can do as a society, instead of remaining hopelessly divided over what we can't do.

Wrap Up for December 2020

"Although cities are often categorized as lonely places, city dwellers are actually more likely to have a neighborhood spot than those living in other types of communities." 

Will we keep turning politically inward?

The 911 emergency medical system has been sorely tested by the pandemic.

"The 2018-2019 tariff increases represent the largest return to protectionism in the U.S. in the post-war era."

Some considerations regarding federal budget deficits.

A case study from Canada for low long-term interest rates.

Plus, Greg Mankiw asks, are low interest rates a boon, or a danger?

Logistics are a major concern for mass vaccinations in the days ahead.

Optimism and pessimism are generally warranted. Still, those who can't imagine a better world ultimately lose their motivation.

Future gasoline demand may not reach its pre-pandemic levels.

Why hasn't more attention been paid to the big questions of economics?

Arnold Kling reviews Classical Liberalism and the Industrial Working Class by Alberto Mingardi.

The pandemic recession includes shifting patterns of energy demand.

Sam Hammond and Brink Lindsey share their ideas with David Beckworth, for more inclusive and dynamic growth.

How has the middle class changed?

Scott Sumner takes on MMT logic. Plus here and also at Econlib. Some conclusions.

What if "store of value" really isn't a particularly useful designation for money? However, Scott Sumner has a different take.

"Do bankers understand money?"

What determines whether inflation occurs?

As it turns out, class biases can even affect Christmas card reciprocity.

There's renewed interest in the Einstein-Szilard refrigerator.

Why hasn't the euro become more dominant?

There are gender differences for one's personal inclination to cooperate.

Addressing the federal fiscal imbalance.

David Wessel opines on rising federal debt.

For Beethoven, freedom was important.

It's been 73 years since American migration was this low. 

Covid doesn't go away just because impatience wants it to.

Alexander Hamilton would not have endorsed MMT.

The value of time currently estimated by the U.S. government, is too low.

"People who agree with market prices have a low expected subjective gain from trading. People who disagree may either become spectacularly rich, or spectacularly poor."

Some benefits of a multigenerational workforce.

What might someone actually mean, if they express a lack of concern about inflation?

David Glasner highlights the relationship between Say's Law and Walras's Law.

Even when populists lose control, those who are left behind continue to feel abandoned.

Is inflation really dead? Not so fast...

How should income inequality be calculated?

Health provisions are an important part of the year end pandemic response bill. Nevertheless, healthcare budgetary gains are temporary.

2020 also brought "advances in AI language generation".

"while tiny houses have far more potential than their scale might suggest, it's at the other end of the size spectrum that the most major breakthroughs in construction remain to be made."

However, originating tiny house communities will need a new approach which includes innovative infrastructure, before older communities are likely to consider tiny homes as viable alternatives.

Fires pose unexpected problems for plastic pipes.

Is racial identity associated with support for free trade?

There are plenty of economic challenges ahead for Biden.

Thomas Sowell on writing (2001): "The manuscript of Basic Economics sat around for about a decade." (HT Timothy Taylor) 

Robots dancing as if 2020 were a good year! 

Post Highlights from 2020

Here are some reflections on posts from 2020. This has been a year which - for many readers - is thankfully almost behind us! I wish everyone the best for 2021.

Jobs as a Form of Societal Permission

Even though artificial intelligence can improve aggregate output in non tradable sectors, tradable sector activity includes AI exponential effects as direct wealth sources. This particularly matters since we've long relied on the monetary redistribution of exponential output, to create jobs as societal permission. Since production efficiencies are translating into relatively less tradable sector work (and its associated exponential output revenue), we need a more direct wealth creation approach for time based product, to ensure that non tradable sector services retain societal permissions as well. After all, some of our most meaningful and challenging work lies in these areas. Artificial intelligence could also be utilized (via societal permission) to augment symmetric time value for all individuals in services generation.

The Hidden Danger of a "Fully Grown" Economy

Once the pandemic finally recedes, will we still be grappling with economic stagnation? For instance, some argue that a decades long slowdown actually indicates economic success. Even if such assertions are valid, problems remain - especially in terms of inequality. After all, millions continue to hope for a stronger growth trajectory which increases their own chances of active participation in the economy. In the meantime, too many non tradable sector market options are not responsive, to the reality of lower income levels. Since production reform is still needed in non tradable sectors, it could be counterproductive to rely on the idea of a fully grown economy as capable of supporting economic stability.

It's Time to Build Strong, Lightweight, Yet Affordable

Millions were already trying to find ways to live more affordably, before the additional burdens of pandemic circumstance. Since non tradable sector options for lower income levels were already limited to begin with, governments face additional struggles in assisting citizens who need help the most. If real innovation had been made possible for low cost housing, financial burdens would not be so severe, now. Chances are, more societal upsets such as pandemic could occur again, sooner rather than later. Before that happens, let's ensure that more low cost living options become available.

Education: Let's Restore Local Community Threads

Ask members of small rural communities about their most pressing circumstance, for what is often a two part response: Securing reliable housing and maintaining a full range of local services. Likewise, these are also important issues for left behind urban communities. In short, many areas in the U.S. would benefit from a more innovative approach to building/infrastructure manufacture and time based services. Local citizens need to be directly involved with these processes as well. The recent pandemic especially highlights a need for local healthcare coordination which reduces dependence on scarce hospital beds during public emergencies. Mutual assistance in educational efforts could go a long way towards alleviating this problem.

Fiat Money as a Framework for Human Capital

Fiat monetary policy has been largely responsible for the transition to a knowledge based economy, in recent decades. However, even though many nations got off to a good start with this approach, a stronger real economy methodology is needed to support monetary policy. In part due to extensive price making in time based services, the present services dominant general equilibrium lacks inclusive levels of economic participation, ownership and growth potential. More opportunities for economic integration and knowledge use are needed, for millions of citizens who still seek means for productive engagement with others. 

Notes on Trade Offs in Systems Design

When we think of budgetary needs for infrastructure, how do we frame system wide efficiencies? One reason this is an important issue, is that today's infrastructure does not fully meet the needs of many individuals and communities. Some systems trade offs are sub optimal since their designs don't reflect the resource capacity of lower income levels. How might a wide range of infrastructure more closely respond to what people can actually contribute? Just the process of answering this question, could go a long way to reduce a wide range of negative externalities, which societies all too often think they "must" live with.

The Solow Residual is on a Cultural Collision Course

Experiential time value between individuals is subjective. Even so, economic time needs to be understand in terms which are sufficiently concrete to measure in relation to shifts in long term productivity. Without such a perspective, there is a societal tendency to either accentuate or downplay activities with important economic ramifications. And presently, many time based services are considered intangible, in that much of their organizational structure is contrary to the resource reciprocity of tradable sector production. Due to their intangible nature, both practical and so called "impractical" forms of time based activity are being called into question. Ultimately, economic time value needs to be more reciprocal and immediate in nature, so as to better contribute to future productivity gains.

Design Markets That Let Basic Incomes Meet Basic Needs

If more markets could readily serve all income levels, citizens would not need to constantly call on their governments to come to the rescue. We have lacked the economic freedom to create markets which could tend to basic needs for lower income levels. Such markets, if they existed, would not need to be constantly questioned in terms of efficacy and worth. However, should societies elect to create forms of basic income in the near future, why not support non tradable sector production reform, so that basic income recipients might build respectful lives for themselves. 

When We Forget How to Live and Let Live

Before the pandemic, there were already pressing structural issues which had long been neglected. For instance, political polarization has been in part due to artificial scarcities. Yet despite the artificial scarcities of professionalized time, the time we have to fulfill our societal obligations is truly scarce. How might we do a better job of improving economic time value for all citizens? Should we elect to do so, the time we all have to get things done, would go much further than is the case today. And once we become more confident in the ability of our time to accomplish what is necessary, perhaps more of us will also become more inclined to live and let live.

An Economic Alternative for the Baumol Effect

When it comes to services and the need for greater productivity, there's a paradox. How to create greater efficiency in services (for continued prosperity), when we wish for more personal attention (time) from others than they can provide? Wouldn't productivity gains translate into even less time availability? Alas, so long as services are funded by other sources of wealth, yes. However, we do have ways to work around this long term problem. By matching our economic time directly with others, we could create direct forms of wealth via symmetrical alignment. Local transformations in educational patterns, could go a long way to make this process possible.

Economic Considerations are Vital for Sustainability

Even though the sustainability of our planet is often debated - and rightly so - economic sustainability deserves a more central role in these dialogues than it has received thus far. Broader and even holistic considerations need to be taken into account, when it comes to general equilibrium stability and long term economic prospects. One significant problem in this regard, is how many of today's institutions no longer function well for lower income levels. When societies neglect the structural circumstance which affect these groups - such as recently noted by Nicholas Eberstadt for AEI - economic conditions will eventually suffer the consequence.  

In the U.S., neither Democrats or Republicans have thought seriously about vital aspects of economic sustainability. Not only have long term budgetary possibilities been sacrificed to entitlement requirements, but short term policy actions fail to take broader market dynamics into consideration. For instance, what good can be expected of fiscal austerity measures that primarily result in arbitrary limits on knowledge based social interactions? 

Alas, there will soon be many inevitable fiscal limitations, whether anyone desires such budgetary restrictions or not. Given this reality, the least we can do is ensure they don't stand in the way of sustainable economic outcomes, by building more inclusive market conditions to benefit all income levels. And - in the meantime - we could encourage policy makers to loosen the regulatory restrictions of our domestic non tradable sectors. 

It's a shame we have experienced various forms of fiscal austerity which were poorly thought through and scarcely benefited anyone. In a knowledge based economy, if fiscal limitations are due to government spending on less worthy causes, the outcomes aren't necessarily as benign as the budgetary restraints of earlier times during tradable sector dominance. Only recall that preference for monetary stimulus during tradable sector dominance was also closely associated with economic stability and positive outcomes. Nevertheless, it is ironic that today, when discussions regarding budgetary restraint still arise, it's usually when one political party wishes to impose fiscal austerity on the party currently in power. 

Any discussion about long term debt and budgetary obligations is incomplete, if it fails to consider market dynamics as a whole. When policy makers lack this broader perspective, they may attempt to either avoid or impose fiscal austerity, without understanding the potential ramifications of their intentions. Further: While fiscal policy losses aren't necessarily problematic for governments during long stretches of tradable sector dominance, there are altogether different factors to consider, once a substantial portion of GDP is derived through fiscal redistribution for applied knowledge. Since this has in fact occurred, knowledge based non tradable sectors can be less responsive to monetary stimulus (in lieu of fiscal stimulus) than one might expect. What's more, much governmental redistribution - at least in the U.S. - is intended for higher income levels. Hence while economic growth is of course needed to continue responsible stewardship for planet Earth, more is involved. It's time to ensure that aggregate growth potential includes output and production gains for all income levels, not just those at the top. 

Ultimately, the greatest potential for economic sustainability occurs when new market possibilities are extended to all income levels and groups. Achieving this, means creating new market use patterns which go well beyond the limits some firms and organizations might otherwise impose on others.  Granted, profits will always be a necessary component of economic sustainability, both for profit based firms and non profit organizations. Just the same, the greatest profits are possible, when the greatest number of participants can actively pursue their own dreams and aspirations as well.

Wrap Up for November 2020

In monetary policy, "One of the most important goals of teaching supply and demand is to stop students from reasoning from a price change."

Coronavirus is making women more reluctant to start families.

"It's almost as if his leadership was reverse-engineered to erode civic trust."

At least 2020 did not also feature a financial crisis. The Fed has succeeded where others have failed.

Scott Sumner reviews Strategies for Monetary Policy by John Cochrane and John Taylor.

Correlating wealth and ability. 

Advanced degree holders can be permanently affected by recessionary circumstance.

We have not always been good at protecting freedom of speech.

Can Democrats reconnect with the heartland?

"waste is essentially a design flaw"  Useful perspective re the environment. Why not create more efficient forms of manufacture?

The message of hope and unity is especially important now.

When it comes to tiny homes, having wheels helps overcome regulatory hurdles and their consequent expenses.

Why have exchange rates been so calm?

Work/family balance has changed for female college graduates over the last century.

Auction theory continues to evolve.

Crowdsourcing for medical treatments.

"The panic of 1837"

In some respects the economic news is quite good for Biden.

What counts as progress?

Childhood and old age play important roles for human capacity.

Unlike other countries, Hawaiian coffee farmers are dependent on tourism, hence experienced considerable setbacks from the pandemic. 

Healthcare in a Biden administration could benefit from a bipartisan approach.

79 percent believe common ground is possible.

Well designed contracts can reduce government tendencies to skimp on routine maintenance.

Wall Street has gradually become more closely aligned with the Democratic party.

Intellectuals remain caught in the middle.

Scott Sumner highlights a recent paper in which he critiques the interest rate orientation in monetary economics.

What happens when high skill work is shifted towards part time options?

"How to think for yourself"

Why is money so important?

Macroeconomics could benefit from education re monetary policy mistakes and theoretical modeling in earlier cycles.

"Three MMT Fallacies"

"Reassessing the Golden Age of Invention"

Practices of all sizes have been affected by the pandemic.

Another reminder that MMT methods are not a long term solution.

When We Can't Always Get What We Want...

Somehow I find it fitting that Mick Jagger of Rolling Stones fame, studied economics before joining the group. Indeed, the song "You Can't Always Get What You Want", is an apt reminder how we seemingly forget to build vital need based markets. Yet if our domestic non tradable sector providers paid more attention to these areas, perhaps people would be less inclined to question the integrity of today's economic and political systems.

Granted, many producers face the temptation of raising the bar on product definitions where possible, so that product and services reflect consumer wants more closely than actual need. After all it can be quite profitable to do so. Unfortunately however, if too many non tradable sector producers choose this route, markets gradually become destabilized. What might be done? Again, cue what Mick Jagger and Keith Richards wrote:

But if you try sometimes you just might find

you get what you need

It's time to get serious about creating more accessible free markets in our non tradable sectors. We are confusing too many experiential wants with what is essentially necessary in order for citizens to thrive. For one thing, taxpayers face additional burdens, due to negative externalities caused by low income workers who lack sufficient income for even limited sets of non tradable sector costs. One indicator we have procrastinated too long in this regard, is that middle class citizens are beginning to seek "living" wages for non discretionary needs as well. Domestic protectionism might be out of control for instance, when a general lack of basic markets encourages politicians to mandate wage floors. And higher mandated wages only make it more difficult for employers to realize profits. We need to focus on production reform in markets where it matters most, to stop this destructive cycle.

Alas, even with fewer profits and businesses in operation, we can't always get what we want when it comes to "livable" wages for all employees. Yet today's workplace offerings are thought of as "meaningful" mostly when when abundant wages are part of the package. Perhaps it's not surprising that the most negative responses to my work thus far, have been due to my advocacy for good deflation in time based services income.

However, good deflation in time based services might be the only way to increase the use of workplace knowledge in more meaningful and accessible ways. Let's just admit it: Great wages are one of those societal wants which is impossible to fulfill for all citizens, via either fiscal means or private sector mandates. The sooner we face this reality, the sooner we can move towards a future of restored hope, as millions gain the right to inclusion in more productive organizational settings. For one thing, good deflation in time based services would do much more than simply address consumer "affordability". Good deflation in income and building requirements, would give us the legal and social grounds to share the work which people find most meaningful in life. 

One reason citizens expect so much from fiscal policy, is that governments are expected to be responsible for meeting many societal needs. The problem in this regard, is how governments and private interests raised regulatory and price bars on basic needs too many times. Each time these bars were raised, governments incrementally gave up their ability to influence or fiscally support citizens and economies, one unfortunate rule and regulation at a time. Now, many basic needs go unmet, as regulatory rules mostly accrue to the societal benefits (wants) of higher income levels. Among the sacrifices in this regard are the one time effectiveness of fiscal policy. Where once it held a valid role in addressing societal needs, now it is closely bound with specific political aims. 

Consider why this matters for inequality and applied knowledge preservation, as well. Fiscal policy now only holds a minor role in smoothing income differences. But more importantly, it is losing its ability to fulfill the role of spreading and supporting knowledge for the use of all citizens. To a large extent, these roles are diminished by the fact redistribution mostly augments the wants of specific high income groups. 

Which is also why I find it difficult to understand, the high hopes attached to fiscal policy "remedies" such as MMT. Even if political support for Modern Monetary Theory should turn into a policy option constant, what might its adherents hope to accomplish in any concrete sense? And that's not even considering the disparaging attacks MMT advocates tend to make on monetarist views. To me at least, Modern Monetary Theory advocates appear mostly concerned with middle class wants, rather than any need based structural issues faced by lower income levels. Granted, there is some good which can still be achieved via fiscal policy. However, we should let go of believing fiscal policy can actually address existing inequalities, let alone the productive use and preservation of knowledge in society. 

 

Hopefully, my readers won't get the impression I view wants as a societal negative. I absolutely believe that wants can be positive as well. However, let's be careful to ensure basic needs are actually met, first. What's more, do so without changing the goalposts so as to obscure basic needs once again. For instance, don't insist that smartphones or credit use are absolute necessities. I don't need either in order to thrive, plus opting for these things would reduce my spending capacity in other crucial respects. Indeed, once basic needs are met, and one finally gets to breathe easier, the occasional wants of a tradable sector (retail) splurge need not break the bank at all.

When societies forget what it actually takes for lower income levels to survive, they also lose track of the extent to which progress actually takes place for societies as a whole. At the very least, tradable sectors have given us excellent examples for full needs based markets, especially when luxury adaptations come from basic commodification structures. Whereas non tradable sector activity, due to the existing scarcities of time and space, tends to leapfrog need based offerings for what may appear as societal progress, but in certain respects is instead luxury mandates for low income levels which can ill afford such requirements. 

Profit is integral to businesses and sustainable economies in general, but profits should not be sought by needlessly obscuring the differences between want and need. Too much of society is presently paying the price for this approach. For one thing, it is a simpler matter to determine basic survival needs than some imagine. Once we become willing to highlight the real differences, innovations for our physical environments in particular, could proceed from this understanding.

Until we realize good deflation in time based services and building requirements, these areas of our lives will remain structurally fragile. As things currently stand, the domestic markets of our non tradable sectors demand too much in terms of debt levels and redistribution, for governments and citizens to successfully shoulder these burdens in the near future. Let's commit to innovation in need based markets. Even though societies can't fulfill every thing their hearts desire, we could still do a much better job of market creation which addresses actual needs.

Some Thoughts on the Political Transition

Despite temptations to remain focused on Trump's cultural divisiveness, we can't afford to lose sight of what has become a substantial economic divide. Is it possible to shift toward a more productive dialogue - one that addresses our long neglected structural dilemma? 

And consider how economic divisions have only grown since Trump's time in office. These issues will continue to impact our political differences if they aren't brought out into the open. Indeed, we need to explore broader perspectives for future wealth creation, while it remains fully possible to do so. From a recent Brookings article re the economic divide:

The data confirms that the election sharpened the striking geographic divide between red and blue America, instead of dispelling it.

Democrats and Republicans disagree on policy approaches, but they both tend to come up empty handed on action based structural approaches. Consequently, the passive aggressiveness of political gridlock rules the day. Even though political gridlock seems the safest option to some, it is a poor substitute for non tradable sector innovation, long term growth potential and economic dynamism. Worse, political gridlock means additional cultural battles, as Democrats and Republicans compete over high income work- especially for careers which include governmental redistribution. 

In all of this, it doesn't help that Republicans increasingly take a protectionist or zero sum approach towards wealth creation. For that matter, many Democrats are doing the same. Plus, some Republicans tend to discount the importance of knowledge based services which are structured as secondary or dependent markets. We recently witnessed evidence of this in Trump's disregard of physicians, due to their need to treat Covid-19 as an income generating source. Once we create organizational patterns for healthcare as originating wealth sources (via time reciprocity), these important activities will finally be independent of endless governmental posturing and the ticking time bombs of budgetary crisis.

Both Democrats and Republicans will need to recognize that in healing the economic divide, left behind regions (urban, rural and suburban alike) will need to approach resource utilization differently. Once supply side solutions are embraced which address the reality of small incomes, millions of citizens can start building more secure futures for themselves and their families. We can all breathe a sigh of collective relief, once broader sources of wealth creation and prosperity become possible. 

Even though we seek common ground with Democrats and Republicans, we still should not rely on their political backing to achieve better economic and social outcomes. It's time to get started on free market templates for new communities, so that political polarization and societal divisions might finally be eased. 

Could Production Rights Counter the Urge to Destroy?

One of the unsettling features of this recent election cycle, has been the oft stated desire to completely demolish the opposition. There's more at stake than belonging to the "wrong" team, since extremists on both sides tend towards a zero tolerance ideological approach. Even though some relief might be had from these cultural battles in the days ahead, how much "normalcy" is still feasible? Is the tribal urge to destroy only temporarily hidden from sight? 

By way of example,  a police chief in Arkansas resigned from his job, after promoting violence against Democrats on social media. Yet this is only a specific extreme example, in a broader backdrop of growing animosity towards "neoliberalism" in general. Indeed, reactions against various capitalist institutions took place decades earlier among the political left, and have since spread to others on the right. Consequently, the urge to destroy could remain an unsettling reality which continues to disrupt the benefits of globalization and an interconnected world. Even though - here in the U.S. - the presidential outcome provides a chance to catch our collective breath, this reprieve may nonetheless be short lived.

What can be done if populism continues to pose problems for wealth creation and economic stability? I can only hope that better defined production rights would ultimately counter the urge to destroy. After all, most individuals are naturally less inclined to tear down institutions and environments which have also been shaped by their own personal and financial commitments. Yet when we hear calls for greater responsibility on the part of all citizens, it's easy to forget, how domestic protectionist impulses limit the ways in which citizens are able to be personally responsible in any group context.

Hence one major challenge is ensuring that more citizens can fully participate in a modern economy. Too many now lack the economic freedom to fully contribute to their economic circumstance, meaning their personal realities often pay the price. When people have few opportunities to define the nature of their own environments, destruction all too often becomes the preferred response. It's time to build stronger supply side production options - options which can create more equality of opportunity and hope for a more inclusive future.

No one can reasonably expect politicians and policy makers to do the heavy lifting in this regard. Plus: Both Democrats and Republicans - despite their polarized differences - have been vested in forms of domestic protectionism which remain destructive for lower income levels. Is it any wonder this protectionism finally spilled out into the international arena?

Average citizens - especially those without college degrees -  are the ones who hold the greatest stake in the markets for services and physical infrastructure which now need to be encouraged. Fortunately, these new markets could be actively supported by economists and other professionals, who are starting to realize that millions can't support the fiscal and social responsibilities of a complex economy without active roles. Nor is it a simple matter to expect monetary redistribution from professional incomes for lower income levels, as was once the case via (a more dominant) tradable sector based revenue. Fortunately, time and knowledge can provide, what money is less prepared to accomplish in a services dominant economy. Let's extend better defined production rights to average citizens. By doing so, we might begin to bridge the chasms between prosperous and struggling regions which now stand in the way of peaceful democratic processes.

Wrap Up for October 2020

Generation Zers could remain more open to dialogue and different points of view, than older generations have been.

If he wins a second term, foreign policy will change dramatically.

"some cities use biting dogs far more often than others."

COVID-19 has even affected plastics recycling.

Even in a world with IOER, "money still matters".

Income inequality in the U.S. has a somewhat unique form.

Making a case for remote work.

The refusal to wear a mask has nothing to do with being libertarian.

What happens when regulatory rules are applied unevenly?

It's easy to get confused about what competition actually means.

Chances are, the new monetary policy of AIT is neither better or worse than its predecessor.

"Why Degrowth is the Worst Idea on the Planet"

Some common causes of bad decision making.

When do corporations assume too much?

Paul Milgrom and Robert Wilson share the 2020 Nobel prize for economics:

Tyler Cowen provides references for Paul Milgrom.  And, additional references for Robert Wilson

Alex Tabarrok focuses on their contributions to auction theory.

Joshua Gans highlights Paul Milgrom's contributions to applied theory: "Simplicity must be a response to the complex environment."

Timothy Taylor gives additional details for their work on auctions.

And from Kevin Bryan on both: "Operations Research and the Rise of Applied Game Theory"

"The founders of modern liberalism like Thomas Hobbes and John Locke sought to lower the aspirations of politics, not to promote the good life as defined by religion, but rather to preserve life itself, since diverse populations could not agree on what the good life was."

Future productivity gains are also likely to be place specific.

Fivebooks posts a wide range of economics books favorites.

Will people in the U.S. continue to trust the Supreme Court?

"COVID-19 and the Fed's Monetary Policy" (Robert Hetzel)

"Americans are in general more concerned about the prospects for boys than for girls, and for their own sons more than their own daughters...conservatives and men are most concerned about boys in general - but liberals are most worried about their own sons. These views may be influencing political trends, and in particular the growing partisanship gap between men and women."

How a longstanding open trade consensus was lost.

Getting past the conceptual reality of winners and losers in education.

"Other than high school graduation rates, the US's most economically distressed zip codes saw little improvement since 2000."

The Corona shock will "likely lead to a large increase in inequality".

And, "The non decline of the labor share". Yet the reasons are not immediately evident.

Debt and budget deficits still matter.

What is the potential for rising U.S. services exports?

This pill might even affect one's religious or political beliefs.

How did Fama get monetary policy so wrong?

"Every lender is trying to help regardless of form of finance, but sooner or later the borrower needs customers."

Barry Lynn discusses COVID-19 and his new book Liberty from All Masters.

Books as freedom, aspiration, and much more: "There's something about waking up every morning to your life in a box that makes you want to learn to be more than you were when you went to sleep the night before."

First, make sure that Medicare Part A remains solvent.

A second term would transform the international order. "The fundamental miscalculation by the Trump administration is to assume the United States is so powerful that it doesn't need to compromise."

Despite the antitrust lawsuit, Google is still a loved brand.

The structural design flaw of social media platforms.

Arnold Kling further notes that large-scale society cannot successfully function via small-scale rules.

What does the word "lockdown" actually mean?

We hesitate to take on risky projects because no one wants to make something that turns out to be lame.

Politically, the south is changing.

Some musings on "The economic base of culture wars". "In politics, failure can sometimes work better than success."

Social distancing is just what an already endangered globalization didn't need.

Why have blue state economies been hit especially hard?

Residential structures improved, but not non-residential structures.

"Where our projects are shared, so too must be the property."

Are There Really Too Many PhD's?

Some have come to believe the talent pool for PhDs is diluted in ways that result in diminishing returns to the marketplace. Might this actually be true? Even though the argument carries a certain logic, it hardly means that societies should shift toward workplaces where knowledge is deemed less important! In particular, a majority of citizens now rely extensively on knowledge and skill, to lead meaningful and successful lives. How might society respond to a perception of "too many" advanced college graduates, given this reality? 

Alas, the "too many PhDs" argument also presents thorny issues for many who seek well compensated workplace opportunities. Recall that much of the rationale for seeking advanced degrees, is due to non tradable sector expectations of degree enhanced incomes. Even though high income levels should not be a prerequisite for basic non discretionary spending, this structural circumstance has yet to be addressed. Consequently, it's not a good idea to argue that millions shouldn't even pursue advanced degrees, so long as there are inadequate supply side mechanisms in place making it feasible to maintain financial responsibilities with anything less than advanced degrees. 

Nevertheless, I have to admit that present day general equilibrium revenue is woefully insufficient, for millions who still seek to enter well compensated workplaces. So much of this revenue is already claimed by price making in secondary markets, that the wealth creation of primary markets has also been compromised to some extent. However, what frustrated me to the point of writing this post, are group identity arguments which question intellectual aptitude and even the supposed cultural limitations of various groups. How exactly are millions of citizens expected to bear financial responsibility, if they are deemed incapable of full participation at the outset? What this essentially boils down to, is the suppression of human capital (with general equilibrium limits as excuse), in a historical moment when human capital is vital for getting things done. And too much valuable human capital output is essentially time based in nature, for anyone to logically deny entry which boosts aggregate time based output.

If there is any supposed "excessive dilution" in the provision of ideas or intellectual strategies, it is only due to the inefficiencies of a general equilibrium structure - one which never accounted for the possibility of full citizen participation in the first place. For this and of course other reasons, I continue to promote time value as a more inclusive source of wealth building, so that all citizens gain a chance to contribute to positive economic outcomes. Time arbitrage could create a durable free market context, so that personal ability and aspiration can be more fully represented. 

Again, the 21st century - in order to have real meaning - is about raising the value of all human capital - not just the opportunities of the best and the brightest. If we neglect to create time based wealth options for left behind communities, these recent rounds of anti-intellectualism and political division are likely to worsen. And anti-intellectualism is a poor substitute, for the kinds of useful and experiential knowledge which may not continue to flourish, should it remain mostly the province of experts and prosperous regions. We can make knowledge valuable in the eyes of all citizens once again, if we allow it to become part of the economic potential of all communities.

Until now, part of what has made it difficult to take definitive action, is the understandable frustration surrounding near future income limitations. While the fact we cannot raise all incomes is of course bad news, the good news is we can innovate our way to good deflation in non tradable sector activity, so that high income levels aren't necessary to live a good life. Fortunately it is within our ability as a society, to create the non tradable sector innovation which brings new spending power to small incomes. In the future, whenever money falls short of hopes and expectations, time value could be tapped as well, for the creation of durable economic outcomes. And best, we can ultimately change our perceptions, as to who is eligible for full participation in a knowledge based society. 

Could Healthcare Providers Reduce Our Political Turmoil?

Perhaps there is a role for healthcare providers, in addressing our ever worsening political circumstance. For one thing, much of our political polarization is due to struggles between different groups for access to high skill services. Healthcare tops this list, and its present variance in job specification, is a prime example of the widening asymmetries between skills use potential for all concerned. The millions with limited skills on offer in our workplaces are finding it more difficult as time goes on, to contribute the taxes that - regardless of party - governments find necessary in a knowledge based economy. Yet the fiscal and monetary contributions of these millions are nonetheless sought, to compensate the skills of present day knowledge providers. All citizens need a chance to participate more fully, so as to maintain the viability and sustainability of coordination systems for knowledge based economies.

As societies become ever more dependent on applied knowledge for either employment potential or simply getting things done, too many find themselves limited in their ability to help themselves or assist others. How might we bring back greater employment symmetry for the skills capacity and employment potential of all citizens? Healthcare providers could be part of the answer, especially since when it comes to sought after time based services, one person's supply is another's demand. And markets for skilled time product are more scarce than they may appear, especially in communities and regions which have been left behind. 

Nevertheless, during election cycles, politicians often make promises about services generation for their constituents that they are in no position to fulfill. In the U.S. we face a constant bombardment of television ads where political candidates insist they are the ones who can best manage healthcare access. Supposedly it's all about preserving consumer demand for appropriate "in" groups, whereas if the "wrong" candidate happens to be elected, healthcare services will be reduced or even lost for one's constituents. For instance, one recently aired commercial sought to convince viewers that should the "wrong" candidate win, more rural hospitals would shut down! Seriously, could the politically "unfortunate" outcome prove responsible for that? For anyone who has closely observed healthcare realities for decades, this sort of nonsense can make one reluctant to even show up at the polls. Yet ads such as these tend to be only mildly divisive and hurtful, in contrast with other attacks.

Sometimes I wonder, what must healthcare providers think when exposed to such ridiculous goings on every two years at election time? Clearly, in many instances it is the healthcare profession which has the ability to change our supply side dilemma for services generation and the use of helpful knowledge, not pundits and politicians. This vital supply side matter should no longer be used as political fodder for division and societal turmoil. 

I continue to hope that healthcare providers will have the courage to step forward and create effective change in the years ahead. We can all do better than this as a society. It is still possible to restore hope for the future, by reaching out to one another for integrative solutions in workplace employment and collaboration with knowledge. Let's get started, and also hope there will not be further disruption and turmoil in our nation once the elections finally come to pass. For that matter, why not place the entire concept of healing into the broader societal arena where it is so desperately needed.

The Economic Freedoms We Still Need

Only in retrospect is it apparent how many economic freedoms we've lost - especially in recent decades. But how to respond, as special interests and legislators alike continue to place limits on our personal agency? 

In particular, consider how we seek to participate in the economy - not just as consumers, but as producers. As producers, we get the chance to experience economic freedom via active and meaningful roles with others. Consequently, the personal agency that derives from active use of skills potential, is more important for personal identity than is sometimes recognized. 

Our active participation in society is vital to innovation possibilities in both our physical and intellectual environments. However, realizing the potential of innovation, also requires that individuals keep a full range of production rights, so that such rights are not constantly diverted to preferred groups and associations. Not only do we need to protect permissions for personal management of physical resources, but also the necessary permissions which allow us to assist others through the use and application of knowledge. 

For that matter, our extent of personal freedom as producers and consumers, affects our ability to retain knowledge. In a recent study the authors discovered that people learn more readily when the relevant material is freely chosen. Despite the fact this education comes with a given bias, the bias framing lends greater meaning to the actions we choose. Indeed, according to the study, "the learning rates were slower in the forced-choice situation than they were in the free-choice one."

The economic freedoms that individuals need in their roles as producers and consumers, are crucial if societies expect to preserve a full range of economic access for all concerned. Production rights matter for ongoing activities which are practical and necessary, but also those which are aspirational and experiential. Perhaps one of the simplest ways to think about production rights is to consider a broader context in which economic freedom is possible. The simplest approach for me in this regard, is to envision how economic freedoms could contribute to the societal processes of maintenance, building, creating, understanding and healing. 

Maintenance is the foundation which supports all the others. From an economic standpoint, sometimes we struggle to maintain economic complexity, since maintenance activities in certain respects are the least compensated of the entire group. Yet even though some maintenance activities are basic in nature, they make it possible to sustain everything else, not only in terms of knowledge and information, but also our physical realities. When we lose crucial economic freedoms at a foundational level, our personal autonomy tends to be compromised in areas of higher levels of economic complexity as well. 

As lower level economic freedoms have been lost, so too society's ability to successfully engage in the higher activities of healing and mutual understanding. Only consider how activities in this regard could otherwise bring the actions of healing to a higher order in terms of positive societal intentions. Even our abilities to build and create are being blunted, and basic healing options are in disarray. In all of this: When people insist that intentions mostly lead to negative outcomes, only recall that intentions always begin at individual and personal levels, and they are both positive and negative in nature. It is only when positive intentions are disallowed, that the inevitable negative intentions societies also hold, come to the fore and gain the upper hand. We need to revive the positive intentions which can protect our economic freedoms, while there is still time to do so.

Wrap Up for September 2020

Pandemics have always been hard on great cities.

What will the future of R & D spending look like in the United States?

Progress studies: Moving from the "what" to the "how".

Rising Debt: Will financial repression be the result?

"The obliteration of the Republican-libertarian alliance"

John Cochrane: We just passed a crucial milestone: U.S. federal debt is now at 100 percent of GDP. "Greek interest rates were low right up until they weren't."
And, what happens when we grow the debt to GDP ratio to 200 percent?

A response from David Andolfatto. Also here. 

Kindness is "an excellent coping skill for the COVID-19 era."

Exploring "The Economic Impacts of COVID-19".

Credentialism as the last unquestioned prejudice.

Some aspects of the current economic crisis are similar to what took place two decades earlier.

COVID-19 will have lasting effects on healthcare.

Tiny offices may eventually make an appearance in public spaces. Imagine how helpful this concept would be in new communities with a walkable core, especially for working students with substantial tutoring loads.

Margaret Hefferman's interesting conversation with Russ Roberts: "The future may be unpredictable but that doesn't mean you can't prepare for it."

It's worth revisiting how "good jobs" are often envisioned.

Some of us dread decline. Others seemingly can't wait for it to happen.

Though services are vitally important, manufacture is still the main driver of global growth.

For the UK, "The Great Realignment is only just getting started".

In a recent Econtalk episode, Matt Ridley notes he would like to "rescue the reputation" of average individuals who keep "tinkering" their way to innovation.

New places are good for memory retention, staying at home, not so much.

Supply shocks matter, especially when we are in the middle of one that's severe. Hence George Selgin is not as optimistic as Scott Sumner and David Beckworth re the recent Fed changes.

When urban sprawl was a reasonable objective.

How much knowledge continuity actually exists in our institutional structures?

"The pandemic will leave the country in an even weaker position to manage the costs of an aging population."

Most of the increases in the CEO/worker pay ratios took place in the nineties.

What is the reference point for our life experiences?

Climate change has also accelerated coffee rust.

Scott Sumner explains why the Fed is taking inflation targeting more seriously.

However, the Fed still lacks sufficient rationale to commit to a "new normal".

"Patience and trust are not going to happen." In the course of my lifetime, I never imagined the country of my birth might actually lose its peaceful transfer of power process. There is plenty of danger associated with this situation, and by no means just for city dwellers.

Why has Abe's additional monetary stimulus been overlooked?

An Econofact podcast with Greg Mankiw.

Why have so few academics and intellectuals spoken up in defense of an open global order?

Covid is still wreaking havoc on rural hospital finances.

"Luckily, the Supreme Court is staffed by adults and will save Obamacare and the Republicans from themselves."

Nevertheless, "While our political leaders play power politics with health care, the system is collapsing."

Women and young adults in particular tend to hold multiple jobs.

Trump's 2016 promise for lower prescription drug prices never materialized.

"The answer is to change the definition of productivity." Plus, the same realignment of time value that could benefit us in our personal lives, could also benefit decentralized group endeavour at a macroeconomic level.

Some unexpected praise for Congress. From the Joint Economic Committee.

Not all average inflation targeting is the same, yet the differences are subtle.

The current emphasis on soft skills can sometimes miss what many people are actually capable of.

"In a modern economy, the power of exit belongs not to people but to capital..."

How fragile is the preservation of knowledge?

Planet Money with Jacob Goldstein on "The Birth of the Greenback".

After last night's discouraging political debate, I'm at least glad to end this wrap up with a positive post about private incentives for racial inclusion from Alex Tabarrok.

An Economic Alternative for the Baumol Effect

There are ways to counter the Baumol effect. But how badly do we want to? Indeed, to what extent are we aware that other options exist, in terms of productivity?  An article from Noah Millman, "How a productivity phenomenon explains the unraveling of America", highlights the seeming inevitability of the present conundrum which inhibits long term growth and prosperity. Perhaps it is not surprising that he frames the Baumol effect as a "chronic illness" which everyone will simply have to live with. Still, I am encouraged that a mainstream publication such as The Week, was willing to explore a concept which till recently was relatively obscure outside academic circles. 

In his article, Noah Millman is understandably concerned about the Baumol constraints of time based activity on education, healthcare and public safety, given the importance of "hands-on person to person interaction". He explains:

We can - and should - look for ways to make all three sectors more efficient. But we should also rationally expect them to get more expensive, and to consume an ever-increasing share of the national income, unless we're willing to let their quality deteriorate or put them out of reach for an increasing share of the population. 

Regular readers know how I feel about time based services consuming more national income than is already the case. We need local patterns of economic time reciprocity, so that broader services access becomes possible without additional budgetary obligations. Nevertheless, Millman continues:

If Baumol's Cost Disease is an important driver of costs in these sectors, then we should expect them to consume an ever-increasing share of the national income - but not only that. If we socialize those functions so as to provide equal services to the citizenry, taxes will have to increase every year just to keep quality steady. And if we don't raise taxes enough, then inequality will increase even as costs rise, leaving more and more of the population poorly provided for. And in either case in a world of tight budgets, these sectors will increasingly be competing with each other for the marginal public dollar, and devaluing competing sectors' contributions to the public good.

Ultimately, individuals who care about inequality, could utilize time arbitrage in participating groups so as to coordinate supply and demand of services, thereby making them more affordable for all concerned. Importantly, this decentralized economic option means a willingness to adjust one's own income expectations accordingly! However, accepting less income also means confronting the present necessity of monetary sacrifice for the human capital expenditure now required, for what is often simple mutual assistance. Even though it is no longer feasible to increase time based services via today's general equilibrium revenue, what impressed me about Millman's article was his recognition how the struggle for time based services affects today's political environment:

It's a recipe for perpetual revolt by both those who pay more into the system, who feel - rightly - like they're paying more and more for less and less, as well as by those who pay less into the system who feel - rightly - like services are getting less and less equitable even as they are getting economically squeezed harder and harder. And if "perpetual revolt" sounds a lot like America today - and it should - then sadly, because of Baumol's Cost Disease, satisfying the demands that fuel that revolt may not be possible.

He sums up: "Sadly, Baumol's Cost Disease is incurable. All we can do is learn to live with it as a chronic condition". If only we could! Alas, this structural issue can't be neglected any longer, for the level of political discord has already ratcheted up to an extreme level. We can no longer assume or hope for a benign outcome, if our political turmoil is not addressed via specific and decentralized economic means. Without a productive response, not only is our nation increasingly likely to deteriorate from within, it might also lose its ability to positively influence other nations. Sadly, many nations are not presently well positioned to address existing inequalities. But individuals still could, so long as they are able to secure and maintain the production rights which make it possible to do so.

Millman thought through his arguments carefully, and for good reason I agree with his summation in certain respects. In a similar vein, already existing debt and budgetary burdens should not be used as excuses for austerity, especially if the relevant supply side chains allow service markets to collapse, or the "wrong" party happens to be in power. However, expectations for the supply and demand of skill and knowledge provision will continue to exacerbate cultural battles, should economic access be sought solely through this form of organizational capacity. Stated another way, my disagreements with Millman are not based on moral grounds, but on what I believe overall monetary revenue to be capable of in the foreseeable future.

We can build supply side alternatives which better align supply and demand for time based services, before modern economies are completely undone by financial repression and/or unwanted austerity. However, we need to get started now, if we are to build a structural response to the Baumol effect. Fortunately, when our economic time commitments are symmetrically aligned, we gain the ability to create services based wealth which is not subject to total factor productivity losses. Even though nations will still need the economic option of paying for applied knowledge on asymmetric terms, symmetric time alignment allows us to productively respond to the Baumol effect.

Time as Journey, Money as Destination

Why is economic time an important consideration, especially in terms of GDP measure? Recall that today's GDP is all about what transpires in the current year of our economic journeys. After all, few aspects of life capture this process more effectively than the time commitments we assume, in part to meet our financial obligations. For anyone who doubts the significance of time based participation as wealth creation, the close correlation of nominal income with aggregate spending is an apt example. 

Nevertheless, some of the more obvious forms of wealth end up as destinations such as buildings and other physical assets. Real estate in particular tends to be passive holdings that aren't closely associated with economic dynamism, once they are constructed. Despite their reliable qualities in terms of asset values, passive holdings are mostly indirect contributors to current economic circumstance, and their value fluctuates accordingly. 

Since money naturally flows toward real estate holdings, this passive tendency helps explain why monetary representation isn't completely straightforward in the measure of GDP. Meanwhile, much of our aggregate time value lacks monetary equivalence. Despite the importance of time participation in the measure of GDP, aggregate time value is so unevenly represented, that consumer inflation does not readily correlate with asset inflation in general equilibrium. 

If we are to achieve greater economic stability in the near future, more emphasis will be needed on the journey itself, and not just the destination. By no means is the measure of GDP unimportant in all this, for it is closely connected to how we go about our economic lives. Should economic time become a valid measure alongside money, not only would this increase the overall value of GDP measure, it could create additional market depth for the time value of all citizens. 

Our focus on economic journeys is especially needed for the long term preservation of applied knowledge. By far the most important aspect of economic time, is its ability to function as a vessel which carries experienced knowledge from person to person. Time is the vessel which gives societies the ability to carry forward applied knowledge in recognizable patterns. Even though money preserves activities for applied knowledge to some extent, money will always be better suited for ends than means. Alas, when money is the sole representative unit of economic value, so much of it eventually flows into passive economic destinations, that not enough remains for the actual journeys of our lives. 

Fortunately, time arbitrage patterns could supplement money by ensuring that more economic activity remains in active roles, instead of excessively flowing to passive destinations. Time arbitrage as a valid unit of economic measure, could help ensure that important knowledge flows can be maintained even in historical moments of budgetary and financial limitations. Hopefully, we will be able to create new means to sustain full levels of economic participation in the near future. Time as an economic unit of value alongside money, could bring better balance to the activities of our journeys and their eventual destinations.

When We Forget How to Live and Let Live

Some resources are truly scarce. Nevertheless, other forms of resource capacity have become artificially scarce. Indeed, one reason capitalism is occasionally called into question, is that special interests too often maintain artificial scarcities in what are basically non discretionary markets. Unfortunately, when societies limit their own economic potential by doing so, the political centers which lend both economic and social stability, gradually lose their hold. Even though various groups and individuals continue seeking solutions for pressing issues, political polarization tends to drown out their voices. In other words, economic conditions may lead to circumstance in which people gradually forget how to live and let live. 

What can be done? Might the underlying structural factors which now get in the way of mutual understanding and civility, still be addressed? How could we make amends for the artificial scarcities which undermine economic stability, long term growth, and even human empathy? Hopefully we have not waited too long, for our present cultural impasse also stands in the way of possibilities for innovation. In a discussion with James Pethokoukis, Caleb Watney describes innovation as an engine and further elaborates:

one of the main things I try to stress...is that the components of the engine have been under considerable stress for decades. We really have not been supporting them through policy at all. In fact, we've been very actively working against them in some ways. But COVID might represent a breaking point of sorts. Sometimes, you can have so much bad policy going on for so long, and then you just need the final straw or a big enough disruption that can really make things start spiraling.

Watney also notes how people no longer feel the world is a positive sum place.

How can we make sure that economic growth does feel positive sum, that everyone's benefiting, that it doesn't have to be one person benefiting at the expense of someone else.

Alas, economists, policy makers and even most citizens grew weary of discussions regarding structural issues, once the economy rebounded from the Great Recession. Hence there was no real response insofar as reforms or other adjustments in organizational capacity. What few predicted, however, was the extent to which neglected structural issues would cause additional problems in short order, with the onset of the pandemic. Had those discussions a decade earlier not been abandoned so quickly after the Great Recession, perhaps we would not have reached the extremes which have surfaced in today's identity politics. Now, it is no simple matter to back up and begin anew. 

In the future, whatever happens, let's hope that representative democracies become more cautious about resorting to cultural battles as a smokescreen for unaddressed issues of economic access and participation. Even though it can be tempting for policy makers to do so, citizens suffer once their governments play the blame game so extensively that little else gets done. Meanwhile, precious energy is being lost in fomented hatreds, even as citizens continue to lose economic access in basic areas of their lives. 

Just the same, if we can once again become willing to live and let live, we need economic context which does not force people to adhere to the same set of structural requirements. The income levels of today's societies are simply too diverse for such unreasonable expectations. Decentralized settings are only worthwhile when they are built so as to encourage a full range of human ability, aspiration, and personal motivation. Even though the gains of some groups would doubtless appear minuscule in relation to other groups, who cares and why should it matter! Just do it! These decentralized settings could still nurture human capital improvement and the preservation of applied knowledge, to the fullest extent possible for all concerned. 

Otherwise, the one size fits all requirements of today's general equilibrium settings, will continue discarding human capital seemingly "unfit" for purpose in relation to the best and the brightest. Fortunately, we have the ability to create a more positive approach to human capital potential. But the time to begin building more hopeful and sustainable settings, is now. We need to productively respond to extreme structural imbalance, before we completely forget how to live and let live.