the intentional marketplace: August 2022

As economies gradually become more complex, basic structural maintenance grows more complicated also. Yet the maintenance of our lives, physical environments and knowledge structures is perceived as economic burden, and societies now lack sustainable market structure in crucial areas. During cycles of primary market dominance, societies come to rely on continuous procedural maintenance through monetary and non monetary means. Now however, some of what we've relied on for full maintenance capacity, has been lost. This is particularly true for the use of knowledge in society.

Just the same, maintenance needs don't go away, and we need new thought processes which can recreate reliable continuance. Doing so means the transformation of our dependent (or secondary) markets, as these areas especially lack incentive to maintain societal stability through monetary compensation alone. In all this, governments are increasingly pressured to minimize fiscal burdens in the use of applied knowledge and skill. We have already seen how procedural maintenance is perceived as taxpayer burden, as political groups now seek to undo the institutions of knowledge and action with nothing sustainable to take their place.

Private enterprise also lacks incentive to make full use of applied knowledge, especially if doing so is perceived as a problem for profit maximization. This isn't good news for societies in the years ahead, since more effective use of knowledge is needed to overcome numerous obstacles to continued progress. These are just some of the reasons I've advocated for time arbitrage commitment as an economic unit of value, to supplement crucial maintenance where monetary compensation so often falls short.

Nevertheless, some reluctance on the part of governments and private enterprise, is understandable. After all, various interest groups have been notorious for creating maintenance "requirements" which are basically about profit making opportunities, instead of true systemic support. Despite the fact faux maintenance isn't often immediately obvious, it occurs routinely in the knowledge based demands of healthcare, education, finance and legal professions. As these additional costs accrue across the spectrum, it only gets more difficult for people, governments and businesses alike to preserve their efforts in society.

Unproductive forms of economic complexity increasingly dominate our redistribution flows. If this weren't enough, the recent cultural battles leave more productive forms of economic complexity on shaky ground. Clearly, too many economic incentives haven't been well aligned for basic maintenance needs. Indeed, a major part of what makes it difficult to maintain productive economic complexity over long periods, is that societies tend to downplay the very activities which conserve valuable patterns of production. How might this be changed?

Thursday, August 4, 2022

The Fragility of Economic Momentum

Why do societies tend to label certain activities as "unproductive"? Or perhaps said another way, what's so special about "productive" endeavour? These questions matter in part, because they closely relate to sectors of the economy specific to equilibrium balance.

Activities considered most productive, are those which encourage further momentum and additional monetary gains. Whereas activities labeled "unproductive", regularly require other existing wealth sources for social continuity on economic terms. While some aren't convinced regarding this causation, ultimately it matters for the ability of mature economies to maintain productive economic complexity. When too many things go wrong, even the strongest economies can start to become fragile. And how can anyone really know where such tipping points exist? I believe it can't be stressed enough, how right Adam Smith was centuries earlier, to worry about the fragile nature of economic momentum. Otherwise, he might not have felt the need to describe "unproductive" activities in ways which can still offend readers of Wealth of Nations today.

Nations have always experienced political struggles regarding fiscal activity, so whatever is viewed as productive or unproductive, depends on cultural framing as well. Still: When it comes to wealth creation, "low productivity" maintenance services are necessary to preserve what people, businesses and nations build in the first place. Importantly, Adam Smith believed in the value of "unproductive" labour. For that matter he noted its worthiness in what was also a description of economic momentum:

A man grows rich by employing a multitude of manufacturers: he grows poor, by maintaining a multitude of menial servants. The labour of the latter, however, has its value, and deserves its reward as well as the former. But the labour of the manufacturer fixes and realizes itself in some particular subject or vendible commodity, which lasts for some time at least after that labour is past. It is, as it were, a certain quantity of labour stocked and stored up to be employed, if necessary, upon some other occasion. That subject, or what is the same thing, the price of that subject, can afterwards, if necessary, put in motion a quantity of labour equal to that which had originally produced it. The labour of the menial servant, on the contrary, does not fix or realize itself in any particular subject or vendible commodity. His services generally perish in the very instant of their performance, and seldom leaves any trace or value behind them, for which an equal quantity of service could afterwards be procured.

Productivity is a macroeconomic concern, because excess resource aggregation in areas which are not direct wealth creation, can eventually pull down areas which most contribute to economic momentum. Despite the fact societies aren't directly aware of such tipping points, much depends on how populations feel in this regard. When economic momentum slows, citizens begin to feel the difficulty of getting ahead and making the most of their lives. Plus, when free markets are held back for too long, people begin to assume it is also okay to take away the freedoms of their neighbors.

Adam Smith lived when expanding economic momentum and free markets contributed to the hopeful expectations of citizens in his time. He observed that when people felt better about their own life options, they were more willing to give consideration and respect to other citizens.

In other words, economic dynamism made people more civilized. Whether or not our own economic times have become more fragile, we already see how people have lost some of this consideration for one another. Perhaps we could give more credit where credit is due, for the earlier freedoms we've lost in full market representation. In particular, where some forms of work are deemed "unproductive", we can assign more economic value to our own time use potential, so that ultimately, less money is necessary for those activities to take place. If we work to regain free markets for all income levels, citizens might hope again for continued progress, prosperity, and personal freedoms.