Becky Hargrove
From Skills Arbitrage to Time Arbitrage
Initial publication, 16 August 2020, The Intentional Marketplace,
monetaryequivalence.blogspot.com
Chapter 3 Intro
Life is complex and it can be difficult to discern the opportunity costs of our time, given the range of competing commitments on our agendas. Hence my hope that time arbitrage can eventually provide greater monetary equivalence for time scarcity, than our daily priorities might otherwise receive.
For starters, non discretionary costs make heavy demands on each roster of time commitments, before other factors even come in to play. One hardly knows for certain, when the costs of life's basics exceed reasonable bounds. And since we normally negotiate our initial framework of time commitments in our workplaces, much depends on whether our most relevant skill sets also command full monetary compensation.
Should our basic time priorities come up short in what they might accomplish at the outset, we lose much of our ability to further negotiate for other responsibilities and aspirations. However, time as the central point of negotiation (rather than skill) would permit better management of a full range of commitments. This economic option becomes all the more crucial, if the use of primary workplace skills doesn't make it feasible to assume a normal range of personal obligations. The economic use of time as a fulcrum, could ensure that initial workplace commitments don't crowd our ability to assume other vital roles in community and family life.
Occasionally, some argue that our time isn't sufficiently valued by firms in general. However, governments may also have few qualms in making additional demands on our scarce time. And while we partially discern how a paycheck shorts our time use potential, our obligations as taxpayers aren't as obvious. Even though the media takes note of calendar days when the public's tax burdens are relieved, no one knows which government priorities actually make the most additional claims on our economic time value.
Consequently, if our time commitment potential is compromised at the outset, tax burdens further exacerbate this reality. In the U.S. for example, both taxpayers and businesses bear considerable responsibility for overlapping areas in our healthcare system. Indeed, even if one manages time commitments carefully and frugally, they could still be waylaid by healthcare emergencies where costs go well beyond the capacity of hourly wages or fixed incomes.
When it comes to time management, opportunity costs are also paramount. Tim Harford encourages us to consider our underlying preferences before we negotiate for other factors, and suggests "Judge the value of what you have by what you had to give up to get it." While one normally thinks about opportunity costs as they relate to individual decision making processes, opportunity costs also come into play at the larger level of society. When governments struggle to meet the competing demands of numerous groups, the coordination of time based services becomes problematic in a centralized or national context. How might societies decentralize more of these vital concerns? One of the more important aspect of time arbitrage, is that mutual reciprocity makes it feasible for groups to achieve time based services coordination at a local community level.
The need to create better options for our time priorities, only increases as we age. And unfortunately, even though many plan to work till what is considered a normal retirement age, it is not always possible to do so. For some, health concerns can make it difficult to fulfill the demands of one's workplace, well before employees anticipate the need to retire. According to the Urban Institute in 2018, approximately 66% of workers over age 50 involuntarily left their jobs not only due to layoffs, but due to health issues in particular. Yet these are often individuals who still have a strong desire to work, not only to tend to their own needs but to also provide benefit for others. A better defined marketplace for time value, could encourage more individuals to continue taking part in mutual employment - especially on their "good" health days.
Arbitrage is a Natural Phenomenon
Arbitrage potential isn't as widely understood as one might expect. Yet arbitrage is simply a way of describing how most individuals make the most of a wide array of available resources. A shift of focus away from the specificity of skills toward time arbitrage, could help people clarify their personal priorities. Despite the importance of employer expectations, no one can really afford to give short shrift to their personal relationships and life goals. The latter in particular involve a wide range of skills and abilities that are not necessary in many of today's workplaces.
Time arbitrage creates opportunities for work spaces which include a wider range of useful and enjoyable activities, especially those readily shared with others. All too often, traditional work has left individuals with little or no time to pursue hobbies. What's more, some personal interests and passions represent entrepreneurial possibilities - particularly if they are actively pursued over extended periods. New markets for time priorities would make individuals less likely to rely on single skills sets in daily interactions with others. Indeed, as people become more accustomed to experimenting with shared offerings, recipients could gain additional incentive to experiment with enjoyable activities as well.
Also, just as arbitrage is about much more than financial gain, entrepreneurship is not simply a matter of creating new businesses. For that matter, neither arbitrage or entrepreneurship are necessarily associated with making money. Russell Sobel notes how William Baumol framed entrepreneurship in broader terms. In his lifetime, Baumol envisioned entrepreneurs as "agents of change - individuals who come up with new ways of doing things and implement them." Examples in this regard include political, academic, and also social entrepreneurs. In short: As individuals, we arbitrage resources not only to make the most of our own environments, but also for the personal challenge of creating environments which intrigue or inspire others.
A More Flexible Framework for Skills Use Choices
One difference between skills and time arbitrage, is how the latter gives people a chance to negotiate for shifting priorities during specific periods. Some of these shifts may stem from changes in family circumstance, while others may reflect evolving personal or intellectual challenges.
In all of this, not every acquired skill set is something that individuals seek to share indiscriminately. For example, more practical skill sets which may be performed out of necessity, are more likely to be shared with others based on relationship affinities. Even though one could be perfectly willing to tutor a family member or friend in math, the subject may not be so personally relevant as to do the same for strangers. Whereas one's intellectual or personal challenges - in other words activities beyond relational necessity - are more likely to be proffered to others beyond one's immediate circle of family and friends. Indeed, in all likelihood a search for common affinities in shared interests, has likely contributed greatly to knowledge diffusion over the millennia.
Sometimes it is practical skills which could use a better defined economic outlet. Some of us love to cook for example, but there are so many market options for prepared meals or restaurants, we lack suitable outlets in which to do so. Even though restaurant ownership can be tempting for would be chefs, it is nonetheless a major life commitment which is not always feasible. In such instances, time arbitrage could provide a productive outlet to share cooking skills with others in the kitchen, in exchange for other skills or forms of shared knowledge.
The skills flexibility of time arbitrage could create more reliable circumstance for mutual assistance than one is likely to find in local existing networks. Even though non profits offer more mutual assistance options in larger cities, smaller communities don't have sufficient population density to support the costs of many forms of non profit activity. However, a marketplace for time value, could help redress the lack of local volunteer efforts in this regard. A platform for time arbitrage could encourage both practical and experiential social interaction among neighbors, without the need for a extensive organizational budgets.
Time or Skill as Labour vs Time as Personal Priority
Consider the many differences between how we view labour commitments for employers, versus the kinds of commitments we might choose for ourselves were it possible to do so. Getting beyond traditional notions of workplace expectations, means exploring what one can readily provide for others and more specifically, whether there is sufficient flexibility in schedules and other logistics. Just as workplace commitments may become burdensome, we are understandably reluctant to assume some familial commitments if there is little potential for negotiation or personal choice in the matter. Age and stamina factor into what we are able to accomplish as well. Alas, as we age, some familial and workplace commitments depend on whether our physical bodies are willing to accommodate!
Many of us maintain tasks involving physical exertion as we age, but the time periods in which we are able to do so, generally become shorter. Importantly, as we approach our retirement years, employees may struggle to maintain constant efforts all day, and in some instances even for part time work. Yet longevity still correlates with our ability to engage in strenuous activities late in life, even if for shorter periods (such as in voluntary gardening). Since time arbitrage would not require day long commitments, hourly matched periods would readily create options for short term physical exertion.
The need for constant repetition also factors into work that requires long commitments. However, our bodies are best designed for short bursts of continuous activity, rather than constant repetition. Hence if repetition is required for long periods, especially with high rates of speed, work that might otherwise be freely chosen and even desirable tends to become drudgery. Craft work at home for pleasure (experiential production), certainly is not the same as what is expected in a factory setting, for instance.
Another example of choice in physical activity, is the enjoyment of the harvest during one's personal time, versus what is necessary otherwise. When I was young I enjoyed picking pecans and wild blackberries. However, the pleasure may have been diminished, were it necessary to do so for money or survival. Fortunately, the mutual employment of time arbitrage, also allows participants the expectation of similar levels of physical exertion, so as to make shared activities more enjoyable for all concerned. The extent to which we are able to define terms of engagement, also help determine whether we enjoy our work day.
While some physical exertion isn't pleasant even in voluntary settings (who really wants to dig a ditch?), many will nonetheless step up to provide such activities during times of need or when others are unable. Still, if work is such drudgery that scarcely anyone wants to perform it on a continual basis, chances are it is a good candidate for further automation, especially if people are reluctant to share it on voluntary terms. Most people have long since grown reluctant to work in hot fields from sunup to sundown, for example. And yet an hour or two harvesting for personal needs can make for a pleasant afternoon! People also enjoy the shared efforts of community gardens in urban areas, since few are inclined to think of these voluntary efforts as burdensome.
Time Arbitrage as Ownership of Individual Choice
One reason we occasionally struggle to "own" how we spend our time, is a lack of suitable institutional context for doing so. Despite a dearth of employment opportunities with full monetary compensation and benefits, we still expect other firms and organizations to bear ultimate responsibility for our primary time schedules. At the turn of the century, few took sufficient notice when company CEOS were already sounding the warning in this regard! Alas, our dependence on existing institutions for our welfare is not an easy habit to break. Even our schools remain organized like the factories of yesteryear, when often it was actually necessary for communities to come together in the same space to get things done.
Today, coming together in this organizational context is the exception rather than the rule. Economies are now so diverse, that the logjam of daily traffic commutes to city centers are no longer necessary or practical. Likewise, lifetime learning in a time of transition, extends far beyond our classroom commitments, or even the way many workplaces were still structured decades earlier. In all of this, can we find more effective ways to take ownership of the vast structure of our lives?
What's more, resource utilization in modern day economies has changed so radically, there's little point in referencing earlier historical points as a relevant guide to work space futures. The latter will be more dispersed and unique, than were the ones where citizens gathered in similar time and space context. If we can keep our present continuum of economic progress, if we can treasure it, we also gain the chance to claim ownership of the applied knowledge which is the wealth of our historical moment. We gain the ability to create environments where each individual learns to conceptualize time management in terms of market opportunities, much as entrepreneurs and business owners have managed personal time priorities all along.
Why would a market designation improve time use potential? In The Hungry Spirit, Charles Handy explains why markets are practical:
Markets are great inventions but they work because they provide customers with a price and a choice. Leave either of these out and you end up serving the bureaucrats rather than the customer...Markets ignore the free.In a time when existing institutions are unable to tend to many of society's needs, we can no longer afford to ignore our scarce time use potential, as if it were some sort of guaranteed free lunch for everyone. If we continue to treat our time priorities this way, societies could have a difficult time reestablishing valid means of mutual responsibility in a changing world. A marketplace for time value, could make it feasible for the ownership of time priorities to serve as signals for community cohesion and economic stability.
When (Existing) Divisions of Labour Aren't Enough
To what extent do divisions of labour specialization actually contribute to both productivity and output? Much depends on how specialization is framed, and what it is intended to accomplish. The divisions of labour which are celebrated in recent centuries, are those which brought a myriad of production possibilities to the masses. Divisions of labour in tradable sectors not only reduced internal costs, they greatly expanded markets and increased economic access. These effective patterns took advantage of internal efficiencies, and in the process brought a vast array of goods within reach of the average consumer.
Conversely, divisions of labour in time based product have turned out differently. Indeed, many quality services are now thought of as luxury goods! Since time is naturally scarce, the time based services of applied knowledge need to scale by means of diffused knowledge and skill. And this is not possible when there is strict supply side control of knowledge producers/providers. Nevertheless, the only way for time based knowledge and skill to scale effectively, is when output takes place via increased production of time based product. In other words, the more knowledge providers we gain in time based product, the more that aggregate output gain is realized in applied knowledge and skill.
The Best Doesn't Have to Devalue the Rest
Skills arbitrage as the primary economic option, could eventually lead to such wide differentiation in skills ability that informal caste situations may develop. Even now, existing differences in skills use lead to extreme variance in income potential. These differences negatively impact social mobility as well.
Yet part of the problem stems from the organizational capacity of our current educational institutions. Formal education reflects knowledge use patterns which exacerbate the loss of human capital potential. Yet many divisions are unnecessary. They not only diminish economic dynamism, but make it difficult for nations to maintain functioning representative democracies.
There's a simple way to think about the rigid divisions of educational supply and demand. If formal education is a nurturing process, consider the extensive resources and revenues applied to what is expected to culminate in an educational "harvest". However, unlike traditional harvests, skills arbitrage for "best" choices means much human potential doesn't find an effective path to market. Instead, it is essentially tossed aside.
So long as tradable sector activity remained dominant, there were employment opportunities which could distribute wages relatively smoothly, even for those with minimal college education. But the recent dominance in non tradable sector time based product, has led to the rise of institutions which lack sufficient means to smooth wage distribution. As time based services came to dominate GDP in mature economies, inequality rose in tandem with the consequent losses in terms of aggregate output.
Even though no one should expect to pay all time based knowledge providers in a similar range, the production and consumption of applied knowledge does not have to remain an all or nothing reality. Fortunately we have the ability to reclaim the vast potential of human effort and preparation, which is like a forgotten harvest in our present day institutions. No one expects equality of outcome, but equality of opportunity is feasible just the same.
Skills Arbitrage as Rival, Time Arbitrage as Non Rival
Skills arbitrage functions by exclusive selection. Plus, extensive human capital costs can lead to the necessity of protecting knowledge via rival methods which prevent broad dispersal and assimilation. An apt example of exclusivity is provided by Dani Rodrik, for a new graduating class. This fortunate group would become part of a small minority of the world's population, "whose lives will be shaped by the decisions you make, individually and collectively, instead of decisions made for you".
How might more citizens become responsible for their own decisions and destinies in a knowledge based economy? Conversely, how long could society fully engage in productive intellectual pursuit, once its educational systems and workplaces mostly function via rival means? Without strong organizational means of non rival knowledge diffusion, societies gradually become fragile and unstable. Time arbitrage could provide more reliable means, to ensure that basic aspects of applied knowledge in particular are not lost to common citizens.
In a sense, the costs associated with rival knowledge use are like burning down a house, just to generate the "heat" societies need to stay warm. However, in some instances protective costs have proven necessary, if they are associated with paying the bills for organizations which otherwise gain revenue for overhead primarily from time based product. The burdens of time scarcity are all the more problematic, when knowledge providers are housed in locations which bear additional costs beyond what would be necessary in many regions. Part of this higher overhead associated with cutting edge knowledge, stems from the fact there is insufficient productive agglomeration to fully compensate applied knowledge via the terms of skills arbitrage.
More productive agglomeration is needed, in order to alleviate the costs associated with time scarcity. Fortunately, time arbitrage could organize in ways which would not make it necessary for participating groups to locate in high cost regions. What's more, a less hierarchical approach would not have the same extensive costs for human capital investment - costs which are essentially a prerequisite for today's prosperous regions.
Skills Arbitrage as Inflexible, Time Arbitrage as Flexible
Why do so many time based services present coordination problems, especially for lower income levels? It has proven quite difficult for societies to successfully arrange mutual time priorities through skills arbitrage alone. For one, already existing time scarcities must be accounted for at the outset. And even then, wide variance in time value dilutes the price signals of many participants, which hinders their ability to effectively carry out mutual obligations on manageable terms.
Since price signals for skills arbitrage respond to specific assignments in human capital demand, this organizational capacity lacks the ability to coordinate with the existing time constraints of other individuals. For those with limited wage capacity, one's time commitments may also be predetermined by their employers as well. In these instances, it is not always feasible for participants to agree on mutual schedules outside the workplace. Hence many aspects of time centered services coordination cannot be dealt with effectively, should individuals lack either family assistance or else additional revenue so that others can perform necessary services in their stead.
In all of this, much of the activity that needs to transpire on an employee's personal time, is nonetheless necessary tasks which are business related. Indeed, earlier roles for inter-organizational coordination became somewhat confused in the 20th century, as self employed individuals gradually transitioned into paid positions on offer from other institutions. Hopefully, in particular for errands that are clearly necessary, social coordination in the near future will be able to take the need for greater workplace flexibility into account.
The Stigma of the "Unwanted" Position
Important though low skill work is for society, those who accept it - and may in fact be quite grateful- are nonetheless on the losing end of a long educational process. Oddly, school years can raise one's hopes and yet dash them at the same time, given the understandable fear that a meaningful and challenging destiny is not necessarily in the cards after graduation.
Low wage work is associated with losing the game of life in many instances. It is also associated with the inclination of others to not look to these groups for advice of any kind, which only further decreases their levels of self confidence. Not only is the associated social stigma unfortunate, a pervasive lack of societal respect makes these individuals more inclined to refuse the work options that are available. Whereas some who do go on in life to secure meaningful employment, may in fact respond, "There but for the grace of God go I". But how many such meaningful jobs will remain secure in the years ahead?
What we can do, is attempt to preserve meaningful work roles for all who especially desire them. What we cannot do, is insist that somehow we are paid the "appropriate" wage which so many have come to rely on. Hence there are many challenges ahead, especially in making certain our physical environments include options which don't make high living costs completely necessary. However, at the same time, we all need to share some of the hard work that people refuse, if and when it commands zero respect, but society finds that work to be necessary just the same. Just the fact of sharing work that is desirable and respectable, could go a long way to convince people not to give up hope for a better future.
Time Arbitrage via Contractual Permissions
Since it incorporates elements of skill and knowledge which are otherwise utilized at professional levels, time arbitrage would include group settings which gain contractual permissions for engaging in high skill time based services. Such permissions become feasible, once participants successfully internalize work patterns where standardized procedures can in some instances become necessary. To this end, the time priorities of all participants would reflect local needs for services involving applied knowledge.
Nevertheless, these knowledge use systems would not transpire in ways which make participants direct competitors in any way with professionals who assist them. Rather, they would create a strong services base for communities which lack the monetary resources to pay those who engage in high skill services in a fully compensated capacity.
Also, consider why permissions for engaging in applied knowledge could lead to better outcomes for all concerned. Both supply and demand are limited for time based services in our non tradable sectors, which is an altogether different matter from the monetary resources which tend to be required in these areas. What time arbitrage could accomplish is a greater emphasis on additional market formation in terms of aggregate time value, rather than additional monetary requirements. This difference is important, given the already heavy dominance of services economy representation in GDP.
Whereas neither supply or demand are particularly limited in terms of tradable sector product. In fact, much of what is necessary in this regard and already available to many consumers, is quite abundant. Nevertheless, production patterns for the latter are no longer needed in many communities. It is entirely logical when certain forms of production are not necessary in many communities, to find more sustainable production methods in sectors where supply and demand are not already complete.
Time Arbitrage as Direct Contributions to Wealth
Societies especially rely on wealth which results from the ability of product to scale. However, much of our daily lives is built around local environments which, due to their connections to the scarcities of time and place, lack the ability to scale on similar terms. Fortunately, a broader context for wealth creation could be generated through the treatment of individual and group time as a form of continuum, for the generation of skill and applied knowledge.
Locally, the best opportunities to create scale are in terms of individual participation. Even though time based and location based product are scarce by definition, they still have the ability to accrue additional wealth via knowledge and skill gains in a group time based context. Different versions of time arbitrage continuum, could eventually make it feasible for most citizens to assume more integral roles in the workings of modern day economies.
Time arbitrage could also benefit individuals in their own own personal quest for meaningful work. Local group coordination would create platforms in which challenging work can readily be shared with work which is considered mundane, yet necessary. No one should have to be designated the latter with no other options throughout the course of a lifetime, because of circumstances in which one is born, personal health concerns, or other resources one may lack.
In recent centuries, skills arbitrage has proven most successful when it can align with wealth which benefits from vast scale. In these instances, the revenue of mass production creates reciprocity for the resource exchange at the outset. Unfortunately, when skills arbitrage accrues to time based services which don't readily scale, the lack of internal reciprocity has meant such services become a form of public debt.
While this additional services debt may not be problematic so long as tradable sector activity remains dominant, it becomes more of a public debt issue once non tradable service sector activity begins to dominate national economies. Greater resource reciprocity is needed at the outset, which would allow exchange processes to form new wealth without need of further debt. To this end, time arbitrage as internal reciprocity for services generation, would also create wealth which addresses long term public debt.
Skills Arbitrage as Hierarchical, Time Arbitrage as Less Hierarchical
Often, skills arbitrage takes place in hierarchical institutional environments. Meritocracy generally rules the day. But is this approach always as practical and necessary as it seems? It depends. How complex is the final product or service? Is it considered an intangible good or service, and if so, why? Does the final product clearly require the input of many different individuals, or might additional input appear unnecessary or even arbitrary?
If final product clearly would not be achievable by a single individual (or perhaps a very small team), hierarchical organization makes sense to an extent it is understandable by all concerned. On the other hand, if hierarchies come between the actual interactions which providers and recipients believe to be most important, this organizational structure will sometimes diminish the experience that is sought by all concerned.
Hierarchical time based services also face budgetary realities, further reducing the time providers and recipients can spend in mutual interchange. Hence shortfalls in revenue can compromise the nature of experiential services, not only due to negative affects on time availability for mutual interchange, but even the degree of applied knowledge options which remain viable. These problems have been evident not only in healthcare and education, but other forms of skills based endeavour as well.
Since time arbitrage uses symmetric matching for resource reciprocity at the outset, it builds services generation which is not dependent on taxation, redistribution or other sources of wealth. One benefit of this organizational capacity, is that less hierarchy is needed for it to function well. Eventually the process could culminate in self supporting networks of dispersed and applied knowledge. The most effective time for merit based assistance is when networks are in the process of being established. It's when when interactions between providers and recipients are more open ended - possibly even resembling a two way street - that hierarchical arrangements can get in the way of the mutual exchange.
Time Arbitrage as a Journey, Not Just a Destination
Interestingly, in the measure of GDP and even the "measure" of life in general, much of what is at stake is not about the destination, but the journey itself. Since time arbitrage would function as a continuum to store applied knowledge and skill, less of the value of each is ultimately caught up in real estate. Indeed, this is one of the major advantages of time as a valid economic unit alongside money. As a store of value, the defined wealth of applied time could add an economic dimension which is otherwise difficult for monetary value to fully express. In the process, the use of knowledge and skill become more associated with the substance of the journey, rather than as an ultimate transformation into real estate.
Time arbitrage would also be associated with a stair step approach to knowledge use, wealth building and ownership capacity. Incremental ownership approaches allow knowledge and skill to function as a torch which gets passed along the length of each journey, rather than of becoming associated mostly with specific destinations and specific recipients. Importantly, this approach to applied knowledge and skill would allow individuals to assume flexible roles not unlike the interchangeable components associated with methods in tradable sector manufacture. Likewise, the same flexibility would be applied to a movable feast of building components and infrastructure, as new communities come to reflect knowledge as light in the darkness instead of buildings that decay over time.
External Coordination vs Internal Coordination
While the skills arbitrage of the workplace focuses on external coordination of teams and coworkers, time arbitrage would generate internal (multiple matching) processes for collaboration and combined efforts, on the part of the groups involved. In general, externally coordinated activity is most logical for product which contains what are clearly separate designations from time value. Whereas internal and informal group coordination may suffice, when people prefer to provide or receive time based services based on what specific individuals can offer for shared interaction.
The twentieth century was a time when many non tradable sector institutions organized along hierarchical lines which reflected patterns previously established by tradable sector activity. One of the more obvious examples was in education, which used the same rationale as factories for bringing large groups of people together in the same locations and time periods. Even more problematic, is that formal education became a matter of students being expected to progress through the same sets of material in the same time settings, regardless of differences in aptitude and inclination.
While hierarchical patterns make sense for institutions that need specific logistical timetables to coordinate final product, results have been decidedly mixed for non tradable forms of organizational capacity. To what extent was hierarchical organization actually needed, when experiential time value mattered most for all involved? One might understandably ask in these instances: How much lost potential for full engagement and personal autonomy has taken place, for the providers and recipients of these interactions?
In particular, too much personal autonomy is sacrificed in the non tradable sector institutions which provide time based product. A marketplace for time value would make possible more spontaneous forms of activities in these areas, which could readily be updated as well via digital assistance.
For that matter, when participants are given more options for workplace activity, they may gain additional incentives to seek mutual employment with others over the full course of a lifetime. By way of example, one study pointed out the benefits of personal autonomy in matching decisions, after the researchers set out to discover what conditions would encourage people to actively collaborate. The authors noted that "Collaboration rates overall were high - and highest when the participants were operating in clusters and had the ability to drop a partner in favor of another." With a suitable platform for economic engagement, time arbitrage could bring personal choice back to many forms of service generation which are needed in daily life.
Time Arbitrage as a Soft Skills Advantage
Regular participation in learning based mutual assistance from a young age, could help individuals develop soft skills which are difficult to obtain when students spend formative years behind desks listening to lecture or responding to instructions. Mutual assistance in learning for both practical and intellectual endeavour would of course include mutually held responsibilities. Nevertheless, such responsibilities would not be as overwhelming as it might seem, when everyone in participating groups assumes similar roles from a young age. Only recall that for much of human existence, young people have carried considerably more autonomy and responsibility than what became expected in the 20th century.
Even though today's workplaces stress the need for soft skills, these acquired abilities are also important in all areas of life. For example, when anyone lacks perseverance and patience with others from a young age, they are likely to experience difficulties later on in adjusting to the wants and needs of others. Formal schooling tends to be short on settings that encourage negotiation and mutual interaction among peers. However, time arbitrage could establish work space patterns that encourage people to reach out to others for mutual support.
Time Arbitrage as a Direct Form of Social Insurance
Time arbitrage is especially important for our ability to coordinate useful services with others, once we begin to experience the effects of aging. After a certain point in life, in spite of what we still hope to accomplish, we become less certain of our ability to fully reciprocate with others in shared responsibility.
Besides the normal interaction which is immediately reciprocated, time arbitrage could also make it feasible to "buy" services time insurance from individuals and participating groups. Individuals might establish standing offers whereby their communities are aware of possibilities in this regard. In all likelihood, many such offers would be simpler than what such individuals normally share with others. Again, in times of uncertainty, often what we most value is simply someone's undivided attention, especially given life's unexpected twists and turns.
A social insurance approach could prove a simpler way to reserve personal attention in the event one might not be able to reciprocate afterward, than the present approach of money for insurance in hopes of reserving time based services from others. Alas, present institutions responsible for time based product, often need to maintain budgetary solvency by reducing time based services availability wherever possible.
Mutually Derived Productivity: The Symmetric Role
Skills arbitrage is asymmetric, in that one's compensation is tied to general equilibrium circumstance which help determine what firms and organizations can pay for skills value. Importantly, however, tradable sectors can pay for skills value according to human capital contribution to total output. Whereas non tradable sector activity output often faces the natural limits of time scarcity in final services product. Consequently, the latter takes a different compensation approach - one which consequently tends to result in higher levels of inequality as well.
Symmetric time value would make it feasible for individuals to align their time value in relation to how others also organize their economic time priorities. This group time value is further expressed in a knowledge continuum which allows participating groups to smooth individual skills difference in long term output capacity. Economic time value would function as a symmetric relationship of mutually acquired and cancelled time debts which - alongside gains in skills and applied knowledge value - also accrue monetary value. Nevertheless, when it comes to existing inequalities, broad skills capacity is more important than monetary compensation on a number of levels.
By placing a wide array of services under the same institutional umbrella, and utilizing group time potential toward this end, time arbitrage could provide better ways to achieve total or multi factor productivity in terms of resource utilization. It is this symmetric alignment which prevents full employment from detracting from aggregate productivity potential. Symmetric time would ultimately create more services capacity, than what skills arbitrage can achieve given its exclusionary requirements. By aligning time value directly, time arbitrage means fewer human capital requirements are necessary for input, in relation to the services output participating groups also achieve.
Ultimately, time arbitrage - unlike the skills arbitrage of time based product - increases total services output in relation to aggregate services input. This matters precisely because it is how gains in living standards are also realized. Gains in living standards are sometimes muddled by quality product definitions which demand more input than what actually results in output gains. In the symmetric arrangement of time arbitrage, quality product is derived as a continuous group process which aligns educational efforts with changes in demand for services. Time arbitrage makes fewer demands on overall resource capacity and human capital, than does asymmetrically aligned skills arbitrage.
Since symmetric time value is internally reciprocated, it would not face the employment capacity limits required by asymmetric compensation for skills arbitrage. Symmetric organization in the form of mutual employment, could restore at an economic level the practical skills which are now missing from school curriculum. Plus, this organizational capacity could make room for vast areas of legacy knowledge and skill - much of which holds tremendous value, yet lies beyond the capacity of current institutions to sufficiently utilize.
Decentralization is Key to Symmetric Alignment
There's also a utility consideration regarding time arbitrage. Skills arbitrage sets up a partial equilibrium for the aggregate time value societies hold, due to emphasis on a skills exclusivity definition for maximum efficiency. While this is an understandable approach, problems arise when it is assumed by all functional economic institutions. While internally efficient for budgets which rely on money as the sole unit of wealth, it is inefficient for the millions who consequently become marginalized. In other words, the meritocratic exclusion which ensures the productivity of specific organizations, impacts societal human capital potential when this approach is taken by each organization.
Nevertheless, when money is the sole representation of wealth, the utilitarian approach of the "greatest good for the greatest number" cannot be achieved at general equilibrium level. Today's governments face an uphill battle when they they try to amend disequilibrium solely on monetary or redistributional terms. Decentralization is a better utilitarian approach. Achieving the greatest good for the greatest number, is only feasible when variance in skills capacity can be smoothed over time via small group capacity.
Time Arbitrage and the Digital Realm
Of late, digital gains have primarily augmented professional income capacity, instead of aggregate wage capacity. Is it possible to bring the value of technology to average citizens? There are ways to bring digital advantages to everyone, which have not yet been explored.
In particular, artificial intelligence makes it feasible for most individuals with moderate skill levels to function at higher levels of personal ability. Even though this possibility has mostly been extended to professionals until now, it represents tremendous potential for the integration of small communities into a knowledge based economy.
NOTES
Chapter 3 IntroHarford, Tim, 'Judge the value of what you have by what you had to give up to get it.', The Undercover Economist, 4 May 2018, first published for Financial Times, 6 April 2018.
Johnson, Richard, and Gosselin, Peter, 'How Secure is Employment at Older Ages?', Urban Institute, 28 December 2018.
Arbitrage is a Natural Phenomenon
Sobel, Russell S, 'Missing: Entrepreneurship in Economic Education', econlib.org., 3 August 2020.
Time Arbitrage as Personal Ownership
Handy, Charles, The Hungry Spirit - Beyond Capitalism: A Quest for Purpose in the Modern World, pages 10 and 13, (New York, NY: Broadway Books, 1998)
Skills Arbitrage as Rival, Time Arbitrage as Non Rival
Upon receiving an honorary degree from the University of York (York, England), Dani Rodrik provided brief comments for the graduates, according to his blog post dated 29 July 2019.
The Stigma of the "Unwanted" Position
Eskreis-Winkler, Lauren, Fishbach, Ayelet and Duckworth, Angela, 'Dear Abby: Should I Give Advice or Receive It?', Association for Psychological Science, University of Chicago, University of Pennsylvania, May 2018.
External Coordination Versus Internal Coordination
Crane, Misti, 'Want People to Work Together? Familiarity, Ability to Pick Partners Could Be Key', Phys.org, Ohio State University, 16 January 2018; from the study 'Cooperation, Clustering, and Assortative Mixing in Dynamic Networks', Melamed, David, Harrell, Ashley, and Simpson, Brent.
