Flexible Ownership Frees Us. But Have Markets Responded?

To a certain extent, markets have responded - at least when it comes to building construction options. But apparently, at least for the duration of this pandemic era, there will be few zoned land patterns to provide the vital support so necessary for incremental ownership to flower. Without such patterns, a dearth of community options means additional burdens for lower income levels - especially given the uncertainties these workers often face. If more accessible forms of ownership were available, the clamor for a $15 dollar minimum wage would likely be muted. What can be done, to create more flexible ownership options in the years to come? 

New land use options would also be helpful for recent retirees such as myself. Once senior citizens try to downsize from traditional single family housing, they quickly discover other single family homes to be the main consumer choice available in the U.S. For example: Thus far I've only located three areas in the country where communities create ample space for flexible housing in a full income range for people over 55. Since many seniors are solely dependent on Social Security income, that leaves a tremendous amount of untapped market opportunity!

Granted, many baby boomers such as myself never thought to seek out manufactured housing when we were young. Doing so wasn't generally perceived as a necessity, for even blue collar incomes could still purchase traditional housing well into the nineties. Likewise: even though Buckminster Fuller advocated for (and designed) flexible housing, he continued to live in a traditional home during the course of his lifetime. Plus, many people never considered non traditional housing until they were of an age they no longer required extra square footage. Part of what's important in this regard, is that homes inevitably age alongside their occupants. Consequently, at the same time in life one anticipates rising healthcare costs, the costs of older home maintenance also rise dramatically. In fact, home renovations can turn out to be more expensive than the cost of new manufactured units.

Nevertheless, if only downsizing were as simple as a non traditional housing purchase! If more land were available for flexible ownership options, lifestyle simplification wouldn't be such a daunting challenge. After all, markets for RVs, manufactured homes and tiny homes have proliferated in recent years. Just the same, older citizens quickly discover that many communities - if and when they'll accept any form of non traditional housing - mostly zone for expensive versions of modular homes on permanent foundations. In other words, these costs can be comparable to what one expects for new traditional housing. 

Since many communities could remain reluctant to add a complete range of income levels to their tax base, the best way forward may be a creation of special zones which encourage flexible ownership for all income levels. Fortunately, there are also ways such communities could help establish trust among the groups which take part. Chief among such methods is making certain local citizens can readily create and maintain economic/social ties with one another. Ultimately, simpler ownership options make it easier for individuals to adapt to evolving economic realities. Plus, once communities become zoned for income diversity, more manufacturers would gain incentive to innovate, thereby further reducing costs for flexible building components on offer. 

One advantage to incremental forms of ownership, are the possibilities of extensive reduction in privately held debt. Less debt - especially for anyone who is burdened by debt - means greater community stability in the event of economic downturn. Once owners can buy, sell, and reconfigure building components as needed, they can better rely on their own resourcefulness, hence become less dependent on others. Reduced dependence in turn, encourages more societal interdependence. Consider how interdependence is valued in the mutual coordination achieved by higher income levels. Why - as a society - shouldn't we be able to extend new potential for interdependence to lower income groups as well? Clearly, in the foreseeable future, market options for flexible land and property ownership will only become more important, not less.

The Knowledge Prior in Action

While I've not referred to the knowledge prior recently, it is one of several dual terms I began using some years earlier. This one exists in relation to what could simply be thought of as a monetary prior, for wealth formation. A knowledge prior would allow time value to work in concert with monetary arbitrage, to generate further economic momentum. Through its value in use (alongside the value in exchange of money) function, knowledge can serve as a initial wealth building component, by directly linking time value to local resource use patterns.

Whereas a monetary prior refers to a point of economic origin which generally begins with production of physical product. In turn, these activities gradually progress (at least in relatively complex economies) to non profit activity which culminates in a certain degree of support for knowledge use. Often, the fact that some areas cannot readily support knowledge is obscured by the fact revenue often comes from elsewhere. System structure which incorporates a knowledge prior, could make useful and experiential knowledge use less random - regardless of region.

Through symmetric time coordination, important elements of wealth generation can be turned "inside out", by tapping additional knowledge capacity at the outset. Knowledge use systems would coordinate and - over time - magnify existing resource capacity and time value in small decentralized groups. While the monetary prior is associated with general equilibrium conditions, knowledge prior use would be associated with alternative equilibrium growth capacity, which includes flexible definitions for both time value and environment.

In particular, innovation for flexible physical infrastructure would be key in these settings. When people age in place in their environments, so does their housing and local infrastructure. The ability to replace old components with new components can be vitally important in these circumstance. The object for small wage patterns working in concert is not to seek out "low quality" infrastructure and housing components. Rather, it is to mass produce less costly components which can be readily changed out when it is clearly time to do so. Indeed, the vast majority of tradable product has been created with similar intent for as long as anyone can remember. While some of this process is disparagingly referred to as throwaway product, the changing circumstance by which one makes best use of a given product, cannot be denied.

No fiscal budgets are going to get any real relief, until non tradable sectors are willing to make room for innovation. Non tradable sectors have already benefited from the innovation of tradable sectors for centuries, and now it is their turn to contribute to the process. Consider today's municipal dilemma, in which aggregate time value for populations as a whole, is no longer sufficient to meet today's requirements for infrastructure. Much of the appearance of lost income gains in recent decades, is due to the stubborn nature of non tradable sectors, as they continue to resist innovation in their own ranks. And the fact that policy makers have grown weary of printing more money for what basically amounts to infrastructure rigidity, is now reflected in a growing lack of ability to fund time based service capacity.

Consider also what has happened to aggregate time value, since a subset of the population now holds the majority of economic time value. If one were to roughly surmise, what policy makers imagine aggregate income potential (for all ages) to be in terms of available revenues, basic income for all citizens is a reasonable way to arrive at such a figure.

However: the basic income that governments might actually be able to provide citizens (say, in the event of an automated future), is a far cry from the revenue governments actually need to maintain their already existing building and infrastructure requirements! An apt context for this approximation is the fact municipalities no longer include many new start up homes. From a recent WSJ article, "How City Hall Exacerbates the Entry-level Housing Squeeze", regarding the need for impact fees:

These fees fund the local infrastructure needed to support a growing population - schools, transportation, environmental mitigation and utilities.

Basically, the above article implied that for most municipalities, their hands are tied and it has become difficult to provide (housing) room for those who are just starting out, or have otherwise become marginalized in some capacity for that matter. Knowledge use systems would not only provide a point of economic entry for lower income levels, but coordinate time value so as to allow greater economic and social cohesion. At the outset, knowledge use systems would set up and maintain a lower cost threshold for all local non tradable sector activity, which would be reinforced with symmetric compensation for time value.

A basic tenet for knowledge prior contribution to employment potential, is that general equilibrium conditions aren't capable of providing a given asymmetric wage across entire population sets. Domestic home activity is an excellent example, why asymmetric wage structure does not automatically apply for all who might otherwise just stay home to take advantage of market wages.

For example, how many parents could realistically pay their children for housework at the going rate of home cleaning services? It helps to remember that only so many employers can meet the requirements of an asymmetric wage, and that ability remains dependent on availability of additional revenue at any given moment. This could partly explain why housework did not become a part of the GDP measure, given the fact sufficient revenue did not exist to pay voluntary domestic labor in a routine workplace capacity.

Symmetric wage structure would not be limited by existing revenue in the marketplace, but by the number of participants who are willing to equally coordinate for group time value alongside the option of discretionary income through resource arbitrage. Even so, a small base wage would go far, because knowledge use systems would recreate non tradable sector consumption. By maintaining innovative and flexible infrastructure, knowledge use systems can be built at a fraction of what the costs would be in general equilibrium conditions.

A knowledge prior function can also provide greater social cohesion for knowledge use patterns, which are otherwise difficult for lower income levels to access. One of the most unfortunate instances in this regard has been the ongoing obligation of public school for all citizens. In spite of required attendance for students, not to mention lifetime taxation responsibilities for U.S. homeowners, public schooling provides little if any social or economic cohesion for those who participate, once they graduate from high school. Knowledge use systems would take care to ensure that local responsibilities for education include economic results for time value, so that all participants can take part in knowledge based activity.

As Buckminster Fuller said, "We are called to be the architects of the future, not its victims." While one often imagines the infrastructure possibilities for general equilibrium conditions, imagination also holds promise for environment definition at all income levels. The knowledge prior could provide a much needed point of origin, for new economic communities. Even though symmetric monetary compensation may not appear equivalent to the rewards of asymmetric compensation, aggregate time value could finally gain the respect it deserves, through better links to potential resource capacity.

For Long Term Growth, Proactive Responses are Needed

Unfortunately, Robert Gordon's dismissal of long term growth potential, is emblematic of a passive approach which has likely contributed to changes in economic circumstance since the Great Recession. His rationale is but one example, how long term growth needs a more proactive response, than has been the case thus far.

But in the meantime, there's supposedly "solace" to be had, in resignation! People are encouraged to believe that in terms of the real economy, "little" can be done. Paul Krugman also reviewed Robert Gordon's recent book, for the New York Times. One of the things which struck me about Krugman's review, was the fact he wasn't inclined to question Gordon's assertions about the lack of future growth potential ("Is he right? A definite maybe.") Krugman continues:

Robert J. Gordon...has been arguing for a long time against the techno-optimism that saturates our culture, with its constant assertion that we're in the midst of revolutionary change. Starting at the height of the dot-com frenzy, he has repeatedly called for perspective. Developments in information and communication technology, he has insisted, just don't measure up to achievements. Specifically, he has argued that the I.T. revolution is less important than any of the five Great Inventions that powered economic growth from 1870 to 1970.

Also, here's Robert Gordon in a recent Bloomberg View post (part one of two), entitled "Goodbye Golden Age of Growth":

The rise in the U.S. standard of living from 1870 to 1970 was a special century--and won't likely be repeated...Future growth in output per person, therefore, will fall short of growth in output per hour. 

And he reasons:

The good news is that the economy will be able to maintain relatively full employment as the fruits of computerization cause work to evolve slowly, rather than in a great rush. I'm optimistic that job growth will continue and that new jobs will appear as rapidly as technology destroys old ones. 

Regular readers likely know where I find fault with Gordon's assertions, as to a supposed lack of potential for future growth and gains in living standards. Technological gains created the possibility of a completely new foundation for communications, knowledge use and physical infrastructure as well. This foundation could transform our burdensome non tradable sectors, which now sap the collective will and resources of governments, citizens and tradable sectors alike.

Yet organizational patterns which could contribute to widespread gains in knowledge use application, have scarcely begun. The same I.T. revolution which Gordon has downplayed, is the same infrastructural mechanism which could act as the conduit for a completely new services based economy. As to those "horrifying" aspects of slow Southern development he described, I can attest (as someone old enough to remember baths in a washtub), that it is more horrifying to be left out of economic loops at some point in one's lifetime, than to experience living structures which don't necessarily have every basic amenity.

I also need to address Gordon's apparent confidence that the economy can maintain relatively full employment, should structural shifts in organizational capacity (innovation) not be given a chance to take place. Granted: for a long time, new jobs appeared as quickly as old ones disappeared. However, a gradual decrease in knowledge based work as tradable sectors shift to non tradable sectors, has not been acknowledged. Given the fact that so much of non tradable sectors are supposed to be about knowledge work, this is what is truly "horrifying" so to speak.

The future growth in output per person which Gordon mentions, is directly tied to the knowledge use potential which could make human capital a direct component of wealth creation. Further, this is the missing element of capital as a whole, which has so many onlookers still mystified. Another important factor is that current services formation places too many participants outside of actual production capacity, at all stages of life.

In fairness to Gordon's continued observations, however, much of what attempts to pass as innovation in public dialogue is not real. Only consider how vested interests frequently promote what amounts to artificial "disruption", so as to prevent the real thing from happening, as was pointed out in this Techcrunch Davos presentation:

It's clear that the Forum gets whats happening and the Fourth Industrial Revolution is a critically important topic, but it's being filtered through a corporate reality of these large players carefully controlling the conversation...This is dangerous.  

By continuing to operate under the assumption that the biggest multi-national corporations are on the cutting edge of disruption, we risk not acting on globally significant opportunities like radical reform of education systems, government bureaucracies, energy management and transformation of transport systems...In the words of Buckminster Fuller, "We need to build new models that make the existing models obsolete."

Exactly. It's not so much I am intent on "destroying" outdated models, because oftentimes that's not the point. I just don't want outdated models to have the chance to needlessly destroy us. And right now, some of them (including wrongheaded monetary reasoning at the Fed) would do so, if nothing is done to short circuit all the hand waving and high profile excuses.

Energy Technology as "No Need to Work" Rationale

This post mostly serves to make a simple point - albeit one which has slowly evolved (at least) since the Great Depression without being directly addressed. Growing use of technology contributed to greater government involvement, in the twentieth century economy. However, technological dispersion now encourages a rationale on the part of both public and private interests, that not everyone needs steady work as a lifetime option. I disagree...people not only need work, but work is necessary in terms which matter at a personal level, to have a meaningful life.

In spite of what is said publicly, too many on the political left and right have reached a tacit agreement that not only is the economy incapable of generating full employment, supposedly it doesn't even matter. As someone who became long term unemployed too early (i.e. prior to what one normally associates with retirement), I heartily disagree with that perspective.

So long as traditional manufacture was capable of generating international expansion, these wealth proceeds greatly contributed to time based services growth (hence employment), as well. Only think what energy related production contributed to broad based knowledge use till recently, for a growing services economy. Mark Perry posts a reminder, regarding the life choices this created for populations: "Each American has the energy-equivalent of nearly 600 full-time "human energy servants". Perry's reference is Brian Wang at the Next Big Future blog, where Wang titles his post:

Average american has energy equivalent of 450 human slaves working 8 hour shifts every day

By no means is the concept of energy slave, a new one. Wikipedia notes:

The term was first used by R. Buckminster Fuller in the caption of an illustration for the cover of the February 1940 issue of Fortune magazine, entitled "World Energy".

The Encyclopedia of Human Thermodynamics states that Buckminster Fuller introduced the term circa 1944, (a bit of confusion here!) and defines it:

In terminology, energy slave is an abstract conception referring to the technologic-mechanical energy equivalent that a healthy human youth could do.

Consider for a moment, one perspective which earlier forms of slavery were said to impart to culture. To what degree did ownership of slaves, encourage people to question the necessity of work? Many who owned this form of - yes, human capital, often did not need to do hard work, and intellectual pursuits were taken on for enjoyment. Indeed, many who were too poor to own slaves before the Civil War, must have realized what a luxury those intellectual pursuits actually represented.

As today's economy begins to encounter limits to knowledge use formation as supplied by other wealth, will technology - as a latter day "forced" labor substitute of sorts - become an excuse for rich and poor alike to no longer work, while a few are fortunate enough to keep well compensated intellectual pursuits? Or will human capital - hence knowledge use in aggregate - have a chance to become better distributed wealth in its own right?

Granted, the "no need to work" perspective isn't openly acknowledged, for obvious reasons. The U.S. in particular insists on a harsh work ethic, in spite of an economy which is no longer doing a good job of providing work where it is most needed. Meanwhile, as technology continues in its latest version of work shifting organizational capacity, the left is starting to emphasize the importance of capital ownership, even as they negate the importance of human capital in the process. And others on the right - even while emphasizing the importance of work - are doing little to encourage economic growth, to maintain stable labor force participation.

Energy slaves in the form of energy technology have provided a most fortunate human capital multiplier in recent centuries. However, asymmetric compensation has begun to claim the wealth aggregates, that are possible for knowledge use as funded by traditional forms of wealth. Fortunately, symmetric compensation (or time arbitrage) could retrieve the thread of meaningful work potential, before other threads become unraveled - on the part of monetary policy, government and the supply side as well. Hopefully, knowledge use systems will have a chance to address full employment and continued growth, in the years ahead.

Work Can Be Positive Economic Validation

Many a well meaning person has reasoned that no one should have to "work for a living" - even Buckminster Fuller (apparently), who I have long admired for his contributions and ideas. However - in Fuller's defense - I really don't think he shared Bertrand Russell's viewpoints about work in this Open Culture article.

Like so many in the present, Buckminster Fuller envisioned technology as creating circumstance where people would eventually not need to work. Even so, he apparently believed that technological gains would lead to spontaneous forms of productive activity, which did not necessarily need to be measured or validated in a formal sense.

As it turns out (with too many decades of unfortunate examples already), people are not good at replicating productive activity, if and when monetary and economic validation are not well embedded in primary social patterns. Just the same, it isn't easy for those of limited means (myself included) to explain why the marginalized need dynamic relationships and interaction with resource capacity, through the course of their lifetimes.

When people lose connections, the results of the loss are difficult for all concerned. One of the greatest challenges of the present, is a need for broader workplace classifications: not just for what people need to accomplish, but also what they would like to accomplish.

Consider what economic intent actually consists of. Despite the sometimes negative connotations associated with economic activity, validation of economic activity is central to the wealth creation which societies rely on. Instead of reacting to "negative" forms of wealth creation, why not frame the dialogue to include the positives which participants imagine? Economic activity - first and foremost, is about validation. And the potential for validation is not something that exists separately from us. It is what we are, and what we could be as well.

Time based relationships are important, and they can be ultimately be validated if we want more freedom in our economic realities. A marketplace for time value, would mean greater freedom in how people choose to manage services generation within local groups. Much of what people desire in the workplace can be made real, by way of replication, coordination and the monetary/time/resource backed compensation which leads to cumulative gains over time.

Economic validation matters, particularly when technology could gradually (otherwise) close the loop for social and workplace interaction at local levels. A time based marketplace would restore labor force participation, and insure that populations are always able to purchase what the benefits of technology have made possible. Presently, too many forms of assistance have been generated on non economic terms. By finding ways to formalize, strengthen and monetize these connections, the human desire to assist and help others, would eventually provide a vital role in economic activity,

The "Burdens" of Asset Formation

As some readers are probably aware, I don't believe that asset structures (or services for that matter) have to represent societal burdens. Even though housing definition often appears as such - for instance - in many respects that reflects artificial, not real scarcity. (What's more, building components can be adapted as needed to better deal with real water scarcity*.) Housing also exists within environments of artificial knowledge use scarcity which further distort marketplace conditions. Few realize just how thoroughly their time value has been captured, by special interests which can't bother to innovate or improve the producer/consumer landscape as needed - inside and out.

Asset formation appears as though a burden which not only distorts economic access, but also (completely unnecessarily) builds up financial risks over time. As special interests attempt to keep the old definitions of consumption and "yesterday's" innovation in place, the costs of primary consumption gradually block the monies which contribute to new services and knowledge use formations.

Worse, product definition gridlock means underlying problems - which contributed to the "Lesser Depression" - have still not been addressed. Governments "need not" address them, because they benefit from the special interests which lack incentive to innovate. Not only do populations need to take greater roles in supply side infrastructure and design, they need to be able to understand the underlying monetary mechanisms which would also provide economic stability for their efforts.

This is particularly important in terms of decentralization, which can only help economic circumstance when done right. Presently in the U.S., states represent a conglomeration of overlapping regional markets in commodities, asset holdings and services, which would effectively prevent them from operating by more autonomous means. Indeed, I had been under the impression that Switzerland knew how to work quite effectively with decentralized power structures. But the recent proposal to return to gold for monetary "stability", forces me to reconsider Switzerland's advantage in regard to decentralization.

Since 2008, considerable monetary flow has been needed to maintain the valuation of existing asset formation. Unfortunately this has been used as rationale to diminish flows at the level of everyday monetary activity, as reflected in Divisia monetary aggregates. The recent Fed tool of IOR contributes to confusion regarding the MV= PY formula, as well as other aspects of monetary theory which once seemed as though well grounded. If this were not enough, uncertainty about the feasibility of redistribution, tempts policy makers to turn their backs to human potential in favor of metallic coin and the hard assets already on the books.

The preferred asset formations on the part of many special interests, are the same that contribute to societal polarization. What's more, they are more problematic in terms of inequality and economic access, than income. The limited ability to innovate for primary consumption needs, only generates further burdens in both asset and community formation. Instead of much needed new cities, economic activity often attempts to cluster around the edges of already existing infrastructure.

Only consider the infrastructure component of this reality. As Ricardo Hausmann stresses in a recent post,

It is the fixed costs that limit the diffusion of the networks. So a strategy for inclusive growth has to focus on ways of either lowering or paying for the fixed costs that connect people to networks.

Even though his thoughts particularly apply to developing nations, they hold meaning for developed nations as well. Instead of new cities, the U.S. mostly saw new subdivisions in the 20th century. And yet unbeknownst to many, the vital supply side issue of lowering fixed costs had already been considered in the U.S. - decades earlier - by Buckminster Fuller.

Innovative infrastructure was all too easily shot down in the twentieth century, by everyone from real estate interests to plumbers and electrical unions. Even so, Buckminster Fuller's efforts to make infrastructure more productive continue today, by people around the world who have been inspired by his vision. To that end, domestic summits could also include recent suggestions for innovation which have the potential to be applied at local levels in new communities.

Freedom of choice in infrastructure and asset formation, would relieve considerable burden and responsibility on the part of those who desire more time use freedom. For instance, burdens associated with becoming a landlord (been there, done that), make it evident that building components need to be subjected to the same stringent overhaul as the vast improvements of the digital transformation. Don't like "slumlords"? Make building components that anyone can snap to existing grids, and also buy or sell if they so desire. True, there are some who enjoy home repairs, renovations and constant maintenance. But that does not mean everyone should have to be subjected to this route, as the primary available low liquidity ownership option.

During his lifetime, Buckminster Fuller attempted some of the same structural transformation which is needed - yet opposed by special interests - today. Only when asset formations become more liquid - hence less associated with the burdens of non innovative "success" - will it be possible to break the stranglehold of crony capitalism which insists future generations must bear the burdens of the past. Only when asset formation comes within closer reach of aggregate time use potential and wider swathes of the population, will nations be convinced that real growth remains possible.

What private interests too often forget, is that they also bear responsibility to make the marketplace easier to access and navigate. Many who complain of government regulation in this regard, forget that it is many among their own who continue to ask for further regulations and restraints, in order to limit competition. If private interests don't take the initiative for reform and change when it is needed most, the marketplace gradually starts to break down. By this time, private interests have often waited too long to take real action, and government steps in to "save the day" (not).

Circumstance such as this likely have bearing, why Keynes as representative of government was remembered after the Great Depression, instead of individuals such as Gustav Cassel. And yet it was the latter, who was able to explain why depressions occurred in the first place. When central bankers and private interests lose faith in the ability to maintain prosperity, it has been too easy to place the blame elsewhere. But further confusion as to actual causes, serves no productive purpose.


*Desert or semi desert climates especially need infrastructural options that allow water use choice "built in", from grid formations to building components.

Skills Liquidity is Better Than Tax Complexity

One advantage of greater skills liquidity, would be the gains in negotiation leverage that skills arbitrage makes possible at individual levels. For instance, imagine being in what might appear (to some) as a "minimum wage" skills set position. This - by no means - need be thought of as purely a "starting" position.

Now, imagine negotiating directly with others in this (subjective) relative position, for what you think is the best "minimum wage" skill set approximate. Instead of remaining stuck in a marketplace which places a salary range as hostage to existing service offerings, the buying power of our time becomes a valid part of both the negotiation process and the definition of the product as well.

That in turn gives our time use greater validity than a minimum wage. The service options gained in such a scenario, have a wealth of possibility which simply can't scale up within the structure of today's institutional settings. This scale is only possible through coordination and focused education within given local populations, at equal time use points.

After all, when time is the arbitrage point, non monetary gains on the part of all concerned, make the negotiation process greater than the limitations of services which are negotiated beyond ourselves. Money comes into the picture, to support (compensate) a process which strengthens both participants, over time. That is the cumulative gain which goes well beyond zero sum, even in the short run. Granted, some aspects of voluntary skills divisions presently appear problematic, as Timothy Taylor aptly points out in this post. Just the same, some who need services, have only limited access to the prosperous regions which presently provide them in their present day "ultimate" form.

This is why coordination for aggregate skills gains - which would also generate new growth in GDP - is needed within local arenas which have been economically left behind. Eventually, new services wealth options could erase the negative skills approximate (by comparison to high skill) so many of us face in the present. Many of us appear as negative skills components, in a world which understandably seeks high skill components to perpetuate prosperity. The "price of entry" for prosperous regions reflects this reality, which can only be amended by greater knowledge dispersion. The price of knowledge use entry can be as problematic for illegals who cross into the U.S., as for rural residents of the U.S. who seek entry into prosperous coastal regions of the country.

When knowledge dispersal is inadequate across regions, tax complexities pretend to erase many of the vast differences in skills sets which are sought in developed nations. Policymakers of every stripe remain caught up in the pretending process. However, governments cannot even come close to providing what they attempt to promise in this regard - even if they sincerely want to be able to do so. No amount of redistribution is capable of filling the hole of negative skills capacity, which highly valued skills compensation in time use terms, has created.

Redistributive illusions become problematic, wherever high skills compensation occurs in the guise of artificially limited skill sets. Unfortunately this process tends to occur all too often, within what society defines as basic goods consumption baskets. In other words, it is hard for the average individual to engage in ongoing (lifetime) rational decision making processes, without access (at some point) to this basket of skills goods. The negative skills effect this generates on lower income, is a result of one's time use not being capable of making up the difference. One could work "nonstop" to access a primary component of the (basic) consumption basket, and still not be able to fulfill their responsibility (i.e.individuals without insurance or government support).

However, high income compensation in this regard is different from income compensation which results from engagement with alternative or luxury options. That is, being a one percenter in a common resource pool which represents resources separate from time, generally does not impede the ability of a poor individual to get from point A to point B in daily routine. For instance, those who get rich building yachts, may not affect common resource or time pool structures negatively in any measurable way. After all, no one (at least that I know) needs a yacht in order to get around.*

While some prosperous regions have adequate skills capacity for their asset to services monetary flows, other regions are forced to rely on additional resource capacity at national levels in order to make up the difference. Tax complexities have hidden the degree to which nations and smaller regions have become dependent upon one another. But tax complexities cannot be eased, until the differences between pools of time use aggregates, versus the much larger pools of resources separate from time, are approached and dealt with on their own merits.

As is too often the case, I wrote this post intending to focus on some individual components (in this instance, tax complexity), only to get sidetracked by a discussion in comments yesterday at a Simon Wren-Lewis post. However I really can't complain, because I came away from that comment thread with a better understanding of some of the differences between resource pools and time use pools. As a result, much of this post ended up rewritten.

Just the same I want to provide the links which initially prompted the post title. Tyler Cowen was concerned about tax complexities being subject to gaming and a lack of transparency, as indicated in this post. He also linked to one he'd written ten years earlier, and cited a recent experiment with piecemeal work which was paired with both simple and complex tax structures. In the experiment, participants were far less likely to respond to the complex tax structures - particularly individuals with less cognitive ability. Small wonder that targeting the ones who appear to be deficient in this regard is a perennial favorite strategy, for policymakers. A recent Tax Foundation post provides what turned out to be an apt illustration of Tyler's concerns, as well as some of his commenters.

*There is one resource separate from time which will become increasingly problematic, thus deserves mention: water. We have limited ourselves to building structures which use more water than necessary, which in turn presents problems for water use not just in developing nations, but increasingly, in the U.S. as well. Buckminster Fuller tried to address the looming problem of water in his lifetime and many supported his ideas. It is time to revisit what he already envisioned, which could solve so many of the problems of the present.

Buckminster Fuller in "Critical Path": A Unique Window Into The Great Depression

"Critical Path" was one of my favorite books, but because my first reading was more than 30 years ago, I don't always remember the particulars. So when I tried to recall his take on the Great Depression, I scanned as much of the chapter "Legally Piggily" as possible for this post. A word of warning! Some history buffs (and other specialists) who would pick up this book may be put off by his style, for he romps through history (and everything else) with a voice like no other and he is not easy to categorize. Perhaps that is what still makes him so interesting, to this day. For all the  recollections of the Depression years, we just don't seem to have the full range in viewpoints that one would expect. Perhaps that's why earlier depressions tended to catch people off guard, for too many people had forgotten the last one when...arggh, it happened again.  So I tried to round up as many "nuggets" and recollections as possible. Since there are too many quotes to post, I will summarize and paraphrase some of the elements which are central to the story he tells.

Fuller believed that swift technological evolution was responsible for the Great Crash, in the years leading up to the beginning of WWI and U.S. entry in 1917. In 1914, J.P. Morgan began purchases to help the British and their allies - an amount of goods from the U.S. equaling all the monetary bullion available to the "ins" power structure. Despite the unprecedented magnitude, it only fractionally tapped the available productivity of the U.S. Reading this I thought, how much of history would actually have been written, if nations never considered options beyond one's gold standard?

Ultimately the bills were run up, and the question became, how to pay? When Congress told J.P. Morgan that payment was no issue, he insisted it was, and a national income tax became the result. During WWI, U.S. industrial production was at $178 billion when there was $30 billion actually available. Because the debt to the U.S. was twice that of all the gold the "ins" had, all the countries involved paid their gold to the U.S. and consequently went off the gold standard. The U.S. then arranged vast trading account loans which created a boom - bust- boom sequence prior to the Great Crash.

However, prior to 1929, there was a vast amount of production capacity from WWI that was still in prime condition. What to do with it? Young people wanted autos, but the autos then were not yet being mass produced, and banks would not make loans for them. At the time, banks would accept chattel mortgages and time payments on large mobile capital goods such as trucking equipment, at least for large corporations. However, banks did support tractor-driven farm machinery. They would hold a chattel mortgage on the machinery, plus a mortgage on the farmland and all attached buildings.

There was a rough hog market in 1926, which made it difficult for many farmers to  make payments on their equipment. Local banks foreclosed on delinquent farmers' mortgages and machinery, with the assumption buyers would be at the ready. Alas, no buyers were in the offing and the previous owners, now bankrupt, could not buy their farms back. Dust bowls developed as upturned, unsown soil began to blow off the farms. Of course it helps to remember that a substantial part of the population still lived on farms at that time.

In 1927 and 1928, the bigger western city banks began to foreclose on their local county banks that had financed the farm machinery sales and were forced to borrow from the former. First the little and then the larger banks found that they had foreclosed on farmhouses with no indoor toilets, many with roofs falling in, barns in poor condition, and farm machinery rusting in the open elements. Word of the bad news spread; small bank runs started, then the crash. Business dropped, unemployment rose, prices dropped and no one had money. Larger banks foreclosed on smaller ones. In early 1933, 5000 banks closed their doors.

No one paraded or protested but instead became low in spirit. When the largest banks faltered, FDR was inaugurated  four months early. He immediately signed the Bank Moratorium  and about a month later, Congress voted the president the ability to control all money. U.S. citizens and their government had become the "wealth resource of last recourse". In 1933, the value of what Buckminster Fuller called "land-based capitalism" plummeted.

When Congress started the investigation of the banking system, they saw how many of the mortgaged properties were all but uninhabitable. At this point government dictated the banking strategy and started refinancing of the building industry. But the so-called building industry (remember this is Fuller talking, though I definitely relate) was already 2000 years behind the arts of building ships of the sea and sky. While airplanes and ships are weight and environment considerate, there is no weight consideration to design land-anchored environment controls. Instead they are completely dependent on sewers, waterlines, electric lines, highway maintenance and controlled by prime landowners with building codes and nearly impossible legal restrictions. Suffice to say I am being reminded now, why portions of this book became  hardwired into my brain.

Even though Buckminster Fuller decried the socialist decisions made at the time, he completely understood why they were necessary. But he wanted humanity to move into a state of true wealth: wealth still not possible as we continue to struggle with outdated interpretations of building product in the present. Perhaps people did not see Fuller for the proponent of freedom and prosperity that he actually was, because his idea of a different kind of wealth other than land was not unlike the philosophy of the American Indian as described by William Cronon in "Changes In the Land"(1983). For me, land wealth is important, but not primary. Whenever people see land wealth as the primary wealth attribute, they inadvertently lose land value anyway, whenever human attributes of wealth get stripped away from it. Let's do our best, not to let that happen again.