Wrap Up for August 2021

When homeownership makes people selfish and exclusive.

What workplace learning options currently exist, which don't require college?

A perspective on "the economic origins of mass incarceration".

Some recycling has proven difficult to achieve profitably. Nevertheless, recycling progress is being made.

"big institutions can't get enough of family homes."

When "permanence" is out of reach: "At the very least, if we can't build infrastructure to last we should build infrastructure that can be repaired using material, energy and skills that are likely to be around when it inevitably fails, at some point in the future."

How much trust has really been lost?

What actually "constitutes a civilisation"?

The U.S. does a great job of freight railroads, but is lousy at passenger rail.

Water wars are coming to Texas.

Could tunnels provide efficient transportation?

Has inflation really gotten out of hand?

Deliberation as antidote to partisanship.

Degrowthers are essentially at an impasse.

Real estate property rights go well beyond the landowner.

Is something positive happening in rural America?

Building with what we already have in abundance. Plus, human scale, parts I and II. 

Authoritarian nationalism as the most important political development of the 21st century.

Giles Wilkes on the UK services productivity debate. Some refer to services as a foundational economy. Also, sectoral bragging isn't helpful. 

Oysters as a natural source of pollution removal.

Should childless Americans really be part of the culture war?

The Afghanistan war was in some respects actually a success. Indeed, it seems the country has gone back to its natural rulers.

Illustrations by county for rent affordability.

Population growth has dramatically declined.

Texas demographics are changing. Also, illustration for U.S. counties.

Variation and unpredictability slow down production processes.

Do intermediate services diminish the dangers of the Baumol effect?

"in low wage environments, low-income families will impart values of obedience to their children to prevent disadvantaging them in the labor market."

The U.S. became increasingly polarized over the last four decades.

"Sovereignty will steadily decline."

What caused the supply side losses for U.S. healthcare in the early 20th century? However, hospitals took a different market approach.

Preserving the Colorado River basin.

Climate change may also pose risks to growth.

What if the Taylor Rule had been strictly followed?

Why are so many resources for capital being idled? And, Before production gains showed up in worker's wages, early capitalists plowed their new wealth back into more capital to create further output.

Deficit hawks never got their moment. But why?

The Afghanistan tragedy has been twenty years in the making.

Aging demographics affect general equilibrium outcomes.

Stories we tell ourselves about ownership.

Universalism in economic behavior.

Which income groups are actually facing the most inflation?

In the 21st century, the term NIMBY became associated with an identifiable "villain". Consequently housing access is now recognized as a collective action problem.

"Most spending on goods and services isn't done by the rich, but by the poor and middle class."

Change is coming to rural areas.

Afghanistan's economic collapse. 

"The Financial Channel of Wage Ridigidy" And Scott Sumner reminds his readers of the relevance this paper holds for the musical chairs model.

Interest rates in a time of inequality and changing demographics.

Rural environs as the new Confederacy? 

The Role of Formal Education in Cultural Divides

What makes our formal educational institutions such a problem when it comes to long term economic stability? Unfortunately, they contribute to our cultural battles by dividing people into haves and have nots, when it comes to skill sets and access to vital information. While this is obviously a problem for citizens in mature economies, these educational divides impact lesser developed nations as well. 

For instance, when emerging economies lack sufficient wealth sources to fund high level human skill, formal education can become associated with "brain drains" or possibly even the need to escape one's country to achieve success. Hence such circumstance pose a threat to many in underdeveloped countries (alas, such as Afghanistan), where knowledge based skills are not yet a dominant factor for local economic activity. Indeed, how could "nation building" ever substitute for the economic pursuits which local citizens need to generate for themselves?

In advanced economies, cultural divides play out differently. All too often, the asymmetrical financial obligations of today's human capital, can crowd more direct wealth sources. Not surprisingly, battles over who even "deserves" access to high skill human capital, lead to social instability and polarization. This lack of long term monetary sustainability for high skill human capital, is already undermining national economies regardless of their level of economic complexity. Hopefully it is not too late to embrace a wide range of valuable human capital formation which doesn't require college degrees, familial wealth, or extensive monetary compensation for that matter. I believe it is still possible to make time use an integral source of wealth in its own right. With a little luck, our formal educational institutions may eventually recognize the need for such an approach as well. 

At the very least, nations now sense that nation building is not a reasonable option. What's more, top down "solutions" leave little room for the true potential of local knowledge and skill alongside tradable sector wealth sources. In order to bridge our cultural divides, new communities are needed, where local participants can generate sustainable sources for human capital formation. Such communities could actually function as knowledge priors, since participating group time could be coordinated symmetrically. Reciprocal time value would in turn allow new wealth to be built via knowledge and skill, without need of compensation from other forms of wealth. 

The monetary flows which exist between primary and secondary markets, affect our structural economic realities in ways that aren't always easy to understood. Let's observe more closely, the nature of existing originating wealth sources. Why do they already exist, and how might they be further augmented? Applied knowledge via coordinated time could serve as a more direct form of wealth creation, so that primary markets eventually come into better balance with dependent or secondary markets. Best, more efficient patterns for human capital formation, would make it possible to address the limitations of formal education which exacerbate our cultural divides.

Is Social Mobility Not as Beneficial as Equality?

Like many - especially those of us with limited means - I believe social mobility is important for personal aspirations and economic access. Of late, the Olympics has been providing some inspiring examples. However, a recent post from Chris Dillow reminds how some on the left are quick to dismiss social mobility as a real positive. Their dislike of the societal need for social mobility, is something I've never quite understood. 

In his post, Chris Dillow presents a more nuanced perspective. He's also realistic in asserting that class issues will never be completely eradicated. For that matter, despite our occasional frustrations with meritocracy, at least it functions better than earlier aristocratic norms. Dillow sums up:

The point of all this is not to say that young working class people should not be ambitious. Instead, it is to suggest that social mobility is no substitute for genuine equality.

Perhaps more discussions along these lines would be worthwhile, especially if it could reduce our constant culture wars. It would be great if class perspectives and framing, could help reduce the excessive focus on identity politics. Nevertheless, people have different images in mind, when they conceptualize "genuine equality". For one thing, I believe that income redistribution should not be a primary focus in these matters. Even if societies could somehow wave a magic wand to reduce existing inequalities via monetary means, what would we get? Especially since our most pressing inequalities tend to involve resources which are aligned with time and space. Chances are, these are the areas we need to focus on the most.

When money is envisioned as sole solution for existing inequalities, too many intangibles and unknowns are left in the picture. How much income would ever be "enough" to pay ones basic bills, for instance? For one thing, societies are often inclined to raise prices for our most basic needs whenever local income levels rise. In other words everyone gets higher prices chasing higher incomes and we're essentially in the same position as before. 

Chances are, market solutions which lead to good deflation in non tradable sectors, might prove a more tangible and practical approach. In particular, good deflation in time based services would allow a wide range of other market prices to benefit from lower operational costs as well. Like the circumstantial nature of social mobility, market solutions could create tangible rewards that give small income levels more discretionary freedom. Supply side production reforms, much as social mobility benefits, would focus on what can be accomplished in the here and now, instead of getting lost in wishful thinking.

Production reform would be incremental and specific in nature, yet it holds considerable potential to create more positive outcomes. The long struggle to make various groups responsible for the welfare of other groups, is no longer working as well as it once did. We might accomplish much more, by creating better market opportunities for aspects of life which simply haven't responded well to income redistribution. In all of this, an important path to greater equality, is the creation of viable market options for everything we connect to specific time and place.

Let's make peace with the fact that money simply can't accomplish everyone that societies might hope for. Indeed, the sooner we make that peace, the sooner we could build markets in time value which surpass the monetary limitations of present knowledge providers. Plus, the sooner we make room for housing which is not imagined as "permanence", the less expensive it will be to maintain and reconfigure these structures once the need arises to do so. Why not build a better, more agile economy where everyone benefits from good deflation in non tradable sectors? Chances are, existing inequalities would also be eased. It's time to get started.