Exit, Voice, and Skills Arbitrage

What benefit can we expect to gain, if we elect to exit malfunctioning economic circumstance, should it become difficult to express voice or loyalty in these environments? In a recent post, Tim Harford explains that while exit remains an option for citizens in mature economies, many feel more constrained in this regard than was once the case. Hence he asks, "What should we do when things go wrong?"

Typically, we think of exit and voice as complementary. Your complaints will be taken more seriously if you can credibly threaten to leave, as anyone who has called to cancel a mobile phone contract can attest. But sometimes exit can silence voice.

Unfortunately, as Harford also notes, one's ability to exit isn't particularly threatening to political parties, "especially not the hardliners who would rather lose than compromise." Alas, when "extremists are delighted" and "moderates quit in disgust", political paralysis is often the result.

The political nature of exit, voice, and loyalty, tends to affect the market potential of nations as well. For instance, since U.S. healthcare is such a commanding portion of GDP, one can forget these markets were constructed so as to intentionally leave market potential incomplete. Just as politicians lack concern for citizens who choose exit over voice, so too the special interests that prefer human capital requirements to restrict market capacity. Even though much of healthcare market exit is far from obvious, there's one important exception. In recent years stories have emerged regarding people in public places who are clearly in need of emergency care, yet they refuse ambulances and assistance to ensure they do not experience financial difficulties afterward.

Skills arbitrage has become one of the main mechanisms responsible for encouraging market exit. Where once people arbitraged their time for mutual assistance, some are more likely now to arbitrage skill sets in highly specific ways that require extensive human capital investment. However, the time based services markets which have resulted, are not near as efficient as one might expect. As "the best of the best" become the last ones standing in formal assistance roles, more citizens become resigned to abandoning services which they no longer have permission to actively provide for themselves or others.

Again, it also helps to consider skills arbitrage roles in the general equilibrium circumstance of national governments. Large nations in particular struggle to coordinate the skills arbitrage of knowledge providers, since only so much of any nation's wealth can be redirected towards full monetary compensation for human capital.

For purposes of general equilibrium, skills arbitrage has largely cornered value in exchange activities, at least for now. Even so, this need not prevent a reemergence of value in use healthcare in the form of time arbitrage. New organizational capacity could make it feasible for participating groups to build much needed skills, as formal value in use economic settings. Defined equilibrium options could help restore a fuller use of knowledge and skill in society. Even though skills arbitrage sometimes results in extensive market exit, time arbitrage might provide ways to ensure that citizens don't continue exiting healthcare markets - especially in moments when they need them most.

Why Do Services Need Monetary Equivalence?

Much of today's political chaos, can ultimately be traced to struggles over who retains access to high skill knowledge. Consequently, it helps to consider: How much of this skills capacity might be artificially scarce?

Still, artificial scarcity was built into quality services product for understandable reasons. Originally, professional services were largely intended for citizens with relatively high income levels in prosperous areas. Over time, however, professional services provision gradually became the norm, replacing the mutual assistance which citizens with limited incomes had long provided for one another. Even though the move from mutual assistance to professional activity has been a centuries long transition, the real turning point towards complete professionalization began about fifty years ago.

By the late seventies, professional healthcare had mostly replaced the last vestiges of local and less formal services options. Nevertheless, the details as to how skilled forms of mutual assistance were legislated away, aren't really well known. Even the latter stages of these transitions were scarcely noticed, since the professionalization of services in general, benefited from widespread media support.

What is belatedly apparent, however, is that when production rights are withdrawn from groups lacking the money for extensive human capital investment, markets for useful services are going to suffer. Fortunately, what has become a woefully insufficient services marketplace, can be addressed. But doing so means not being afraid to explain to citizens what actually happened. The less blame in this regard, the better. Forgiving what happened, means we get the chance to create a more productive and hopeful future. We now have the opportunity to create greater economic meaning for time value, and doing so would extend the skills capacity needed for today's knowledge based economy. Much of this skills capacity will also need to take place on non pecuniary terms capable of creating monetary equivalence.

Why so? Healthcare is mostly a dependent secondary market. Since much of it relies on government support, periods of slow economic growth impact the revenues actually available. Consequently, even though demand continues to grow - especially due to aging populations - healthcare providers have limited ability to expand supply side capacity via the same pricing terms. Yet how could healthcare providers be paid substantially less, if their human capital investment costs remain relatively fixed?

For the U.S. in particular, present day organizational capacity was created during relatively long periods of increasing tradable sector growth. This organizational capacity was also accomplished via strong price making mechanisms, especially in the latter decades of the 20th century. Now, in certain respects the price making approach has reached its natural limits, given other near future budgetary obligations. In other words, even though more capacity is needed, revenue can't realistically grow to meet that demand. Consequently, services demand now needs to be met by different means than what have occurred in the U.S. thus far.  This is the dilemma many high skill providers currently face. What can be done?

The moment is right, to create human capital organizational patterns which include reliable and easily defined non pecuniary rewards. This approach would help compensate the fact that healthcare as a secondary market position, cannot respond to further demand with full monetary compensation for an expanded supply side. Non pecuniary rewards would create greater monetary equivalence for those willing to participate in healthcare, through new forms of organizational capacity.

Services such as healthcare could gain greater monetary equivalence by increasing time value as part of an applied knowledge continuum. This process could be undertaken with relatively minimal costs for human capital investment. Education for services skills would be integrated into local communities and their workplaces. The symmetry of time arbitrage would allow education and other services capacity to function as components of wealth creation, instead of simply more demands on other existing wealth.

Such an approach could be a tremendous boost for communities which presently lack the resources necessary to compensate today's high skill knowledge providers. Plus, monetary equivalence for human capital investment via non pecuniary means, could help stabilize skilled services markets in general. And in modern economies, services stabilization is certainly important for wealth stabilization as a whole.

Notes on Time as a Unit of Measure

Time as an economic unit of measure, could bring needed clarity to the now mysterious nature of what the real economy actually consists of. Healthcare is a notorious example, how difficult it has become to determine productivity and long term growth potential. In a recent post, Scott Sumner also stressed that the intangible nature of healthcare is just one factor which distorts the utility of RGDP measure:

...NGDP is at least an order of magnitude more clearly defined and more easily measured  than RGDP.

Even the term "real" has been somewhat of a misnomer in the measure of GDP. At a lecture for the Bennett Institute, Diane Coyle highlighted an explanation given by Thomas Schelling:

What we call "real" magnitudes are not completely real, only the money magnitudes are real. The "real" ones are hypothetical.

Despite their centrality to economic activity, statistics such as RGDP and NGDP are only useful up to a point. Hence Sumner also emphasized:

Most importantly, don't ask any statistic to do more than it can. 

At the very least, NGDP is simpler because it is the monetary expression. In the above linked lecture, Coyle explains how the real economy might be envisioned:

The philosophical base of GDP is utilitarianism. It measures current period flows of income, consumption, investment and trade. Assets contribute to economic welfare only when the services they provide are consumed.

It's fortunate we don't have to measure asset wealth as a component of the real economy, especially since asset wealth from previous time periods can be quite misleading in terms of revenue flow potential. Plus, at a time when tradable sector activity often requires less capital or overhead to achieve profits, much more capital than what is actually necessary is often required, before vital time based services are even implemented. Healthcare and education in particular are burdened by extensive regulations which create additional overhead costs. And because of the centrality of healthcare, its additional costs become burdens throughout the entire economy.

Importantly, overhead costs tend to overwhelm the revenue capacity these requirements actually make possible, in non tradable sector time based services. Further taxation, redistribution, and debt have carried the burdens wherever revenue potential leaves off. Perhaps this partly explains why services product remains poorly measured. Again, Diane Coyle:

The industrial and occupational classifications provide startling detail on manufacturing industry and almost none on the services that make up four fifths of the modern economy.

This level of services dominance makes it clear that services generation could benefit from a stronger, yet simpler statistical and organizational approach. In Scott Sumners's post, the debate on the growing mystery of what healthcare is supposed to even accomplish, continued in the comments section. For instance, how does one determine the value of prolonging life as long as possible, when doctors suggest treatments for incurable forms of cancer?

Let's say you "prove" that cancer treatment adds 4 months to a lifespan. Is that good? How do we determine if it's good? Do we use revealed preference? Utilitarian measures? And if it is good, how do we determine "how good". What is the value of four extra months when suffering from cancer. I'm willing to believe the benefit might be huge or tiny. I just don't know. There are lots of imponderables here.

When we try to decipher healthcare in ways which aren't specifically market related, the mystery only seems to deepen. Part of the problem is that so many aspects of healing and well being - prior to the professionalism of the twentieth century - were extremely diverse and multi-faceted. These conceptual universes and their associated activities were shared by average citizens, which meant the inclusion of diverse levels of skill, knowledge and approach. Too much of practical value was gradually stripped away, in the ongoing attempts to professionalize what were previously basic aspects of human life and mutual assistance, not to mention personal curiosity and intellectual challenges. Much of this was gradually and reluctantly surrendered to others who were better positioned in society, yet it has never been an easy matter to convey to others how such losses actually felt.

One can only imagine: For many students and practitioners of life, how must it have impacted their daily existence? To take for granted an active participation with others in intriguing aspects of applied knowledge, only to face an ever growing pressure to stop doing so, once the practices of applied knowledge were reserved for far away prosperous cities and distant buildings with seemingly impenetrable walls. A light which had long illuminated human imagination and motivation, assumed a more limited and somehow physical presence, in hallowed halls which many would be students of life would never have the chance to see.

Time as a unit of measure, could provide ways to restore what were once informal means of mutual assistance and personal challenge, but in a much needed economic framework. Time as measure, could become like a vase to once again hold the potential of applied knowledge for average citizens wherever they may happen to live, or regardless of their current level of resource capacity.

Various aspects of healing are just one part of life which could benefit from a statistic which records how people ultimately choose to coordinate their time priorities and preferences over extended periods. While some suggest new statistics which measure factors such as happiness and well being, those potential measures are mostly envisioned as alternatives to GDP. Whereas economic measure of time value could be more practical, for the new statistic would instead make room for shared experiences as an additional component of GDP. How much happiness and well being might even ultimately be derived through such a statistic, as millions of individuals finally regain freedom, personal autonomy, and meaningful challenges in their economic lives?

A primary reason for adopting time as a unit of measure, is that doing so allows us to record and build upon what we experience in shared interactions with others. GDP classification for time arbitrage could be expressed via roles such as coaching, mentoring, mutual corroboration, etc., instead of more specific aspects of applied knowledge and skill which are closely associated with professional time based product. When assistance takes place on voluntary terms, these informal - yet economic - roles could allow individuals and groups alike to benefit from assets being utilized in other capacities as well. When assets provide multiple contexts, more services output can be derived via greatly reduced overhead costs.

Ultimately, everyone needs better means to manage their own time scarcities, than what presently exist. When time isn't actually counted or measured as a valid economic component, too much time value potential is unseen, unappreciated, and consequently lost. As Diane Coyle emphasized, "we see what we count and not the other way around." Adopting time arbitrage as a means of measure, makes it possible to tap vast reservoirs of hidden wealth, in the form of human capital. Of course, these are just a few of the reasons doing so could prove worthwhile. There are doubtless many more.

Austrian/Niskanen Debates: What's Missing?

It's not easy in the U.S. to take what is now a political "road less traveled". Plus, the road of the moderate has become so ill defined as to resemble a disappearing path in the landscape. Are moderate policy efforts little more than a "sell out" to the political enemy? For some it seems that way. Of course, trying to legislate rigid rules of any kind for a diverse population of more than three hundred million, is no walk in the park. Since a political middle is mostly MIA, groups such as Niskanen face an uphill struggle, in their efforts to contribute to the national conversation.

Nevertheless, they deserve credit for trying, given the present dialogue of partisan outrage. Last year, Samuel Hammond penned an essay for Niskanen titled "The Free-Market Welfare State: Preserving Dynamism in a Volatile World". Interestingly enough, Hammond referenced Arnold Kling in the footnotes, prompting Kling to ask recently, "Am I a Welfare State Advocate?" Kling's post also highlighted a response to Samuel Hammond from Kai Weiss: "No Such Thing as a Free-Market Welfare State"

Instead, advocates of the free market should look to a strengthening of civil society, combined with a job-rich economy, to help those left behind. In the end, responding to skepticism about the role of free markets by arguing for more statism might be an oxymoron after all.

In fairness to Niskanen voices, their arguments are more nuanced than Weiss implies. And the "strengthening of civil society", a volunteerism which Weiss understandably promotes, is - alas - not so simple anymore. Yes, once the U.S. had a civil society which contributed greatly to the bottom line in terms of well being and a social safety net. However, that earlier reality also included citizens who could freely practice what were the medium and even high skill activities of their time. Yet much that contributed to well being which involved interchange with others, has since been made either illegal, or at the very least, limited to those who undertake extensive formal education.

This loss of production rights included economic factors to some degree (such as alternative healthcare practitioners), alongside the voluntary level of what citizens once freely provided for one another. How does one argue for a restoration of civil society, knowing that many earlier knowledge and skill production rights which were beneficial for social interaction, have long since been withdrawn?

Some Austrians come across a bit flippant as well, in reminding us how healthcare is not a right. This makes me want to pull my hair out, of course healthcare is not a right! However, it's a crying shame this fact of life didn't get stressed in the historical moments that really mattered for U.S. citizens. If everyone basically understood they wouldn't have healthcare rights, how would governments and private associations have gotten the chance to sway citizens to give up their own rights of healing, which contributed so to mutual assistance and a natural form of safety net? What was really gained for that extensive loss of freedom?

Worse, those now exclusive production rights went to limited sets of healthcare practitioners with extensive time scarcities and severe geographic constraints. Basically we're talking about what eventually became the loss of millions of practical, sometimes necessary aspects of healing, in everyday life. Why was a mere fraction of the population given the keys to such basic forms of knowledge production, to the detriment of everyone else? Are not Austrians major supporters of human freedom? If we all believe civil society needs strengthening, why can't we find ways to prove it?

Meanwhile, extensive supply side limits in healthcare practice, have also translated into overhead institutional costs which make it impossible for any level of taxation and redistribution to get to the heart of what matters for a public safety net. If and when governments become subject to austerity, much of our public or private non tradable sector activity is hardly positioned to take up the slack.

From time to time, people across the political spectrum (including individuals at Niskanen) have in fact attempted to deal with pressing supply side structural limitations. One reason this process has borne little fruit, is the fact a full frontal assault on general equilibrium settings for applied knowledge - especially in a large nation - is impractical. It can't work in part because high income skills arbitrage value is indirectly responsible for extensive valuations throughout the economy.

Yet high powered skills arbitrage in aggregate, also accounts for the extensive loss of time value on the part of millions, which is expressed in the trillions of debt we collectively owe in terms of national budget obligations. And why have governments still not realized that time based product, regardless of its marketplace value, can only scale up through increased supply side participation? Non tradable sector private interests know it, even if it isn't in their best interest to share this crucial understanding with their government benefactors.

Nevertheless, a structural approach for production reform, needs to occur in ways which won't undermine the overall wealth framing of general equilibrium. Most long term solutions actually lie outside of today's existing systems of structural organization. And the costs of living today, are such that citizens can't be expected to resume earlier societal safety net obligations on non economic terms.

To sum up, it's really misleading to argue that if government would only get out of the way, private markets would get along just fine. Today's private sectors include extensive non tradable sector organizational patterns which are compromised so as to inhibit dynamism and long term growth. These markets are so distorted that no amount of taxation or redistribution could provide sufficient remedy, regardless of the tax burdens that will soon fall on the shoulders of citizens. Let's face our structural problems for what they actually are. Publicly despising "wrong" political viewpoints as an institutional main course of action, is simply the wrong approach.

Centralization and the Production Rights Factor

In "Democracy in America" (George Lawrence translation, 1969, 1988 edition) Alexis Tocqueville carefully considered both advantages and disadvantages of centralization and decentralization, and how these organizational patterns play out differently, depending on the citizenry involved. How to account for the fact Americans were able to utilize decentralization more effectively, than was often the case for Europeans?

...in America, the people are enlightened, awake to their own interests, and accustomed to take thought for them.

One likely reason, is that Americans at the outset were used to taking a full array of production rights for granted - rights which brought the costs and definitions of their local environments within reach of their abilities and resource capacity. Small wonder these citizens were so engaged! Again, Tocqueville (page 91):

I also think that when the central administration claims completely to replace the free concurrence of those primarily concerned, it is deceiving itself or trying to deceive you.

A central power, however enlightened and wise one imagines it to be, can never alone see to all the details of the life of a great nation. It cannot do so because such a task exceeds human strength. When it attempts unaided to create and operate so much complicated machinery, it must be satisfied with very imperfect results or exhaust itself in futile efforts. 

It is true that centralization can easily succeed in imposing an external uniformity on men's behavior and that that uniformity comes to be loved for itself without reference to its objectives...Centralization easily imposes an aspect of regularity on day-to-day business; it can regulate the details of social control skillfully; check slight disorders and petty offenses; maintain the status quo of society, which cannot be properly be called either decadence or progress...In a word, it excels at preventing, not at doing. When it is a question of deeply stirring society or of setting it a rapid pace, its strength deserts it. Once its measures require any aid from individuals, this vast machine turns out to be astonishingly feeble; suddenly it is reduced to impotence. 

Notice from Tocqueville's argument, how centralization "excels at preventing, not at doing", which can impact both long term growth and economic dynamism. For our purposes here: What do citizens or special interests find especially worthy to "prevent" in the first place, and to what extent do they use government for such purposes? Only consider how this process has played out for healthcare in general. How much of government "assisted" quality healthcare has actually been an unconscious exercise in preventing ("excess" supply side), in lieu of doing (responsive markets)? Sadly, "excess" supply side prevention has placed additional burdens on most personal, corporate and governmental budgets in recent decades.

Perhaps governments will proceed with more caution in the future, when deciding whether to limit production rights to "special" citizens and special interests. Once extensive educational standards were imposed on healthcare, many had little choice but to abandon healthcare practice to those better prepared - financially and otherwise - to guarantee quality product for consumers.

If freedoms are restricted for lower income levels, how can freedoms be realistically maintained for upper income levels? After all, once governments elect to impose supply side limits in knowledge and skill, many policy makers feel they have little choice but to somehow follow through for citizens, by extending additional welfare benefits to ameliorate those losses. Once losses in production rights fade from collective memory, citizens come to expect governments to "protect" them in ways which often simply aren't possible.

Twentieth century healthcare is just one arena which holds ample historical examples, how not to build dynamic marketplaces for services capacity. What governments gain in financial support from special interest groups which seek to limit the use of knowledge on their behalf, governments nonetheless lose in terms of the wealth potential of citizens in aggregate, who presently lack means to fully contribute to what has become a major component of national GDP.  Might citizens regain the capacity to become "awake to their own interests, and accustomed to take thought for them"? Let's hope so.

Are Long Term Budget Issues a "Lost Cause"?

One can't help but wonder, whether we might as well call it a day re the national budget outlook, given the news of Paul Ryan's upcoming early retirement. The WSJ notes that once he leaves, the Republican party will lose its "most influential advocate for changes to Social Security, Medicare and Medicaid":

Mr. Ryan will leave Congress with no substantial progress on any of them, few lawmakers interested in picking up the torch, and a clear signal that prospects are dim for any big overhaul in the foreseeable future.

Indeed, Donald Trump also made it clear early on, that he did not want substantial reductions in either retirement or health benefits. He's certainly not alone.

I have mixed feelings about Ryan's wished for legacy, since - given the chance - he might have slashed budgets in ways that generated austerity with no proactive response from healthcare suppliers in the private sector. Just the same, he was one of the few in Washington who recognized what was at stake, for long term budgetary issues. Meanwhile the basic problem remains: Everything about Medicare and Medicaid in particular, was a band-aid attempt to make amends for private sector shortcomings - many of which surfaced well over a century earlier. Thus far, no constructive dialogue has taken place in Washington, re healthcare's contribution to budgetary woes. No one is on the same page, in spite of similar policy recommendations which seem to resurface time and again.

Also, according to the WSJ,

The trust fund for Medicare that supports hospital spending for older Americans is currently projected to be depleted in 2029. 

It's easy to forget that the problems rural areas have experienced re healthcare access in recent decades, might surface in city healthcare systems as well - possibly even within the course of my lifetime. Even though baby boomers such as myself attempt to avoid doctors and hospitals wherever possible, many people simply don't have the option of doing so. What's more, the fact some of us often manage to avoid doctor's offices for the better part of a decade, isn't enough to help the budgetary problems that healthcare has created for our government.

Let's give citizens permission, to find better means by which they can take care of themselves. People deserve the right to practice healing as a part of this process, and everyone deserves permission to tap into the vast amount of practical and experiential assistance made possible by the digital era. Production reform is sorely needed, not just for those who lack access to formal healthcare, but also so that governments won't implode from too many self imposed responsibilities. John C. Williams of the San Francisco Fed recently voiced his concerns re Washington's budgetary dilemma, as well:

The federal government, by anybody's measure, is on an unsustainable path in terms of deficits and debt accumulation over the next 30-40 years. This is not a secret...It's gotten a little bit worse as fiscal stimulus comes in and makes the deficit go somewhat bigger in the next 5 to 10 years. But the underlying problem was there already. And so the concerns that I have are not so much some kind of crisis...I'm not that worried about markets reacting to this. It's more about how do we make sure that we have solutions for Medicare, Social Security, and other government programs, and get us somehow back on a more sustainable path.

Musings on "Free Market" Healthcare

Even though it's difficult to imagine today, healthcare in the U.S. prior to the twentieth century, once resembled a free market for the use of one's skills. Before extensive formal educational requirements were put in place, rural areas were still more likely to have practitioners as well.

Much has changed. In a post for the Mises Institute, "Do We Have a Free-Market Medical System"? Hunter Lewis notes that for some observers, profit based healthcare "should be outlawed", while others are upset that healthcare is "socialized". How to think about this? He writes:

So what do we have? I think the most apt description would be "crony capitalist" medicine, one in which powerful special interests conspire with government officials to create legally mandated monopolies, with the specific goal of thwarting free market competition...There are many honest and dedicated medical professionals sincerely devoted to the healing arts. But they are trapped in a system that can more accurately be described as a crony capitalist nightmare.

Granted, while healthcare in the U.S. is hardly the result of a vast conspiracy theory, crony capitalist medicine does describe a relative default position, for knowledge use protectionism. This approach has undermined legislation time and again, which possibly could have made the system more accessible and efficient.

Nevertheless, physicians have lost some of their hard won autonomy in recent decades. The added healthcare value they worked diligently to create, is now shared by hospitals, insurance and pharmaceutical companies. However, at a macroeconomic level, a symbolic focus on physicians remains relevant, for their earlier twentieth century successes have shifted the relative value of other human capital representation downward somewhat, in general equilibrium.

How so? Physicians increasingly expressed a preference for a customer base which was only partially representative of general equilibrium. In other words, they increasingly catered to clientele who were the most advantageous to serve. Through a focus on wealthier patients, physicians were ultimately able to raise the status of healthcare to that a respectable profession, on a par with other highly skilled professions.

For physicians in the U.S. healthcare is still largely a free market, in the sense that many physicians remain free to choose both their patients and the services they wish to provide. The problem of course is that this circumstance is one sided, since too many rights to the use of practical knowledge are now limited. Consequently, here's where any semblance of a free market for healthcare starts to break down, for citizens lack means to pursue healthcare options outside the services of today's physicians. Production rights need to be restored so that citizens can once again improve their lot through their own efforts, which is all the more important when they lack the monetary means to reimburse skills which require high levels of investment and sacrifice.

Again, physician discrimination for the use of one's scarce time, is understandable. That's a form of discrimination which - given the scarce reality of our time - all of us have little choice but to employ. Just the same, we need to extend that freedom of our time preferences both ways. In particular, it would be cruel for the physician to discriminate, if he or she does so in ways that deny others the ability to help themselves, especially when no one else can reasonably be expected to come to their aid. First, let's do no more harm. Why not think twice, before we needlessly tie the hands of those who otherwise might discover not only means to help themselves, but also others as well.

Time Value as a Core Economic Principle

When asked to define basic economic principles, one of the first things that might come to mind for an economist, is efficiency in resource use. According to Investopedia:

Economic efficiency implies an economic state in which every resource is optimally allocated to serve each individual or entity in the best way while minimizing waste and inefficiency. When an economy is economically efficient, any changes made to assist one entity would harm another. In terms of production, goods are produced at their lowest possible cost, as are the variable inputs of production.

Given this rationale, why has the resource of our time been exempted, in so many instances? In contrast with other resource capacity, the time of many citizens is poorly utilized - given what is manifestly possible. Perhaps the fact economics is still such a young science, accounts for the fact that our time management efforts in the workplace have yet to fully adapt to the time use preferences of others. After all, the time at our disposal for interaction with the world, is the most important resource we hold in common.

Presently, we are not even close to full coordination and effective time management for all concerned. Even though some of us are able to successfully manage our own time, we need opportunities to do so which take the optimal time management of others into account as well. The struggles that many face in coordinating mutual efforts for mutual obligations, has generated substantial political burdens. Even so, too many policy discussions take place as if the marketplace were operating efficiently for time based services provision.

Consider the Investopedia argument re efficiency, for instance. Some physicians will reason that "changes made to assist one entity would harm another", specifically referring to how changes to help patients would burden a doctor's time priorities and create additional monetary burdens for taxpayers. While this argument is superficially correct, there's more involved, since the time value of physicians and citizens was not generated via a common time resource equilibrium. Granted: It's not logical for anyone to insist that government "force" others to provide special skills on their behalf. We simply can't insist on "rights" to the time or skills capacity that others possess. But likewise, no knowledge provider should insist of government that certain skills be exempted from the possibilities that individuals might pursue via their own time and resource capacity. 

Governmental impartiality for personal freedom and skills production needs to extend to all citizens, if valuable knowledge and skills are to be sustained and preserved for the future. When production and consumption provision are confused in any supply and demand model, the result is lost efficiency, for governments and citizens alike.

Nevertheless, the efficiency that individuals seek via time based product, is essentially different from the divisions of labour in which efficiencies are management driven. When final product includes personal interaction, time compensation need not be solely an institutional cost. When time purchases time, the nature of its use becomes more effective as a cost that individuals elect to personally manage, through mutually agreed upon divisions of labour. For the time based product of time arbitrage, time efficiency would derive internally and organically, from shifting preferences on the part of all involved. Time based product is multifaceted, and its efficiency is not so much a specific product outcome, as an experiential voluntary exchange between individuals.

Democracy's Recipe: Consumption as a Privilege, Production as a Right

I decided to state the main point of this post upfront, to make certain it wouldn't be missed. Among the many concerns of this nation's founders, was the possibility that citizens' rights to produce basic necessities and services - which they were still free to provide - might eventually be undermined through legislation. Indeed, the ability of those early citizens to work directly with a wide range of resource capacity, was a major consideration, re why a (fledgling) democracy proved viable in the first place.

Many production rights have been lost so slowly and imperceptibly, that it's no simple matter to trace the histories of what has taken place in this regard. For that matter, many believe that regulations matter insofar as they affect the options of private industry, rather than the economic and social choices of private individuals. Nevertheless: The regulatory requirements of today's building codes - not to mention the extensive requirements for knowledge use - stand in the way of much that individuals could otherwise provide for themselves and others, since special interests now encourage local marketplaces which mostly cater to higher income levels.

Equally problematic: Many individual production rights were undermined in ways which can lead to an unfortunate rationale of lost consumption rights (think "rights" to healthcare). What's more, should anyone insist on rights to healthcare, others will view this as an unfair imposition on taxpayers as a whole. From here it's a quick slippery slope to arguments that democracy isn't a suitable form of government, as Will Wilkinson highlighted in "How Libertarian Democracy Skepticism Infected the American Right".

Before the current emphasis on cost containment in healthcare, many groups made efforts to increase marketplace capacity for all concerned, but these efforts mostly turned out to be additional resources for supply side capacity as it was already structured. These efforts also led to more firmly entrenched fiscal roles to subsidize healthcare - a burden which can only be (presently) relieved through gradual reductions in marketplace capacity.

It has been tempting for governments to make production rights a privilege for special interests, particularly since this also allows them to tap into the wealth capacity of these groups at local levels. However, government indebtedness for healthcare - in part because of retirement obligations - now means little room is left for discretionary responses in other circumstance.

While it could be tempting for some to do away with democracy, disallowing the poor to vote would hardly reduce the government debt loads which still lack long term budgetary solutions. Regular readers are already familiar with my suggestion for long term debt reduction: restore production rights to citizens. Not only could a supply side response remove the confusion about consumption rights, it would reduce the chances of debt becoming democracy's downfall.

Rights to Heal Need Not Counter Physician Authority

As if there wasn't enough political discord in Washington already, the evergreen issues of healthcare access have resisted resolutions as long as anyone can remember. I'm now halfway through "The Social Transformation of American Medicine", which explains some of the reality behind the struggle. Even before considering the arguments Paul Starr put forward, I didn't feel comfortable about proposing knowledge use that would only counter the approach by which organized medicine developed in the U.S.

Since healthcare became one sixth of the economy some years earlier, scarcely anyone believes it should demand more resource capacity than what has already transpired. What level of healthcare can our government realistically maintain, especially while more revenue is diverted to military purposes and tax relief? Could the distinct possibility of diminishing government revenue for healthcare, be behind some of these recent layoffs? Meanwhile, unpaid medical bills are on the rise as well.

Yet earlier attempts at reform, some in the guise of making healthcare more "efficient", often included organizational changes which would have reduced the ability of physicians to define their own work environments. Only consider however, that the same autonomy physicians preserved for themselves, is the same autonomy that so many individuals would like to experience for themselves. Are there ways to "bottle" or provide an institutional framing, for what physicians have managed to achieve for themselves? Instead of yet another reform attempt which would reduce physician autonomy, why not use their success as a reference point, for the delicate balance of interdependence and autonomy which we all seek in the workplace and in our personal lives.

Another problem, is that physicians - like others who offer high skill knowledge product - mostly utilize knowledge and skill in a price making context. Price making need not be problematic at a macroeconomic level, when the product in question is only a small part of marketplace structure. But now that healthcare has expanded to one sixth of the economy; the price making that takes place, especially when knowledge is utilized in a secondary or dependent market position, puts additional pressures on general equilibrium circumstance.

The fiat monetary systems which originated in the twentieth century, also contained a built in flexibility which allowed government debt to contribute to vast progress in healthcare. Now, however, political pressure is beginning to limit this flexibility. We don't know yet, the degree to which presumed limits to growth will affect the organizational capacity of healthcare in the near future. Just as healthcare practitioners felt the need to restrict supply in the Great Depression, similar rationale can arise during periods of economic stagnation, especially given the possibility that stagnation will be with us for a while. Are there means to overcome these limits, without further straining the institutional dynamics already in play?

Time arbitrage for the use of knowledge, would not be in competition with the functions of healthcare practitioners, since time preferences would reimburse skill sets instead of money. In other words, economic unit of account and exchange functions would be assigned to mutually coordinated time units, while money simultaneously reimburses time as new commodity formation. The changing "time prices" for specific skills sets, would provide useful clues for educational options in each group. Since each local group uses the time at its disposal, no debt formation takes place. Hence time units (time purchases time) become a direct component of wealth creation, which in turn allows knowledge use to assume a primary marketplace position.

Also important is that time units in this capacity can function like the price taker positions that are often found in tradable sector activity. It becomes possible for participants to do so, because - like tradable sector commodity pricing signals - the participants become aware of the potential equilibrium dimensions of time aggregates - only the process occurs locally, rather than globally. In this capacity, healthcare as time arbitrage also does not compete with traditional healthcare, since it generates new organizational patterns from knowledge use which do not require the resource capacity of general equilibrium.

Much has changed, since earlier periods when physicians found it necessary to reduce the numbers of their ranks as means to gain status. No one need question the quality product which physicians brought to the marketplace in the last century, and other groups which seek the right to heal would augment these valuable skills sets, not attempt to replace them. In the not so distant past, people from all walks of life in the U.S. could still aspire to a life of respectability and usefulness. By no means would a renewed right to heal, based on personal desire to help others, diminish the status and respectability of those who have made such tremendous sacrifices to make the most of their human capital.

Practical Healthcare Markets are Still Possible

Today's healthcare has become one of the more important economic factors which exacerbate political division in the U.S. But how has healthcare's present organizational capacity, contributed to this result? These thoughts were on my mind as I recently began reading "The Social Transformation of American Medicine". Even though the book was published more than thirty years ago, much of what it details, still appears relevant now.

Lester King in the above JAMA link, gave a favourable review of Paul Starr's book, and his quibbles were mostly minor. Among King's concerns, was Starr's generalization of certain historical factors, Likewise, my first impression is that Paul Starr may have overly generalized healthcare's level of authority over citizens and other disciplines. Nevertheless, enough authority exists, that more citizens now seek healthcare as defined by professional specialization and deep learning, than practitioners are actually able to provide.

Little more than a century ago, scarce anyone had reason to complain about supply side limits, since lay practitioners from all walks of life were still at work - especially in rural regions where doctors were few. Among the lay practitioners who were most effective, were those who emphasized the botanical remedies which were ultimately absorbed by the healthcare of our time. While botanical remedies were once a major aspect of rural self sufficiency, the practitioners who continue to emphasize botanical remedies now, are mostly found in prosperous cities with little access to rural America.

Individual autonomy has preserved the ability of physicians to undertake deep learning which requires extensive education and commitments for human capital investment. I certainly respect their desire for autonomy, their ability to provide a quality product, and their wish to live and work wherever they desire. However, the healthcare marketplace which exists today, is mostly available for individuals who are still able to assume active roles in city life. Since our government is quickly becoming less able to reimburse individuals who cannot fully reciprocate for healthcare, and many rural citizens remain in an excessively dependent state, physicians may eventually seek means to deal with this major societal issue.

Fortunately, it is possible to generate a more practical healthcare marketplace, even as physicians seek to preserve their hard won autonomy. We could create new organizational patterns which make divisions of "labour" that require deep and extensive learning, less of a necessity. One way to accomplish this is through time arbitrage, in which the purchase of time value for time value, does not pose issues for the price points and human capital investments of today's healthcare.

Addressing supply side deficiencies is vitally important, especially for those who lack for the resource capacity or income to fully compensate deep learning requirements. Given the fact automation proceeds apace with both deep learning and learning specific methods, learning specific methods for individuals would certainly be a reasonable approach. Since only about a quarter of today's workforce has the well compensated work with benefits that is capable of supporting deep learning, and insurance can't absorb the difference, it's time for a new approach, to practical forms of knowledge use.

Musings on Healthcare Circumstance

Healthcare in the U.S. has a long way to go, before policy makers find acceptable solutions for all concerned. But how long has it been since a sufficient level of choice existed? Clearly, today's healthcare cannot be considered a free market in the same sense as goods or other commodities. In the event today's existing supply side requirements were left to chance, the result would be a far cry, from anything resembling free market conditions.

How did healthcare become so impervious to improvements which citizens could feel comfortable "getting behind"? An apt quote from Josh Barro recently made the rounds:

All healthcare is unpopular because healthcare is 1/6 of our economy, but nobody wants to spend 1/6 of their income on it.

Even though it may appear that overuse of healthcare is the pertinent issue, many of us know individuals who try to avoid a doctor's office unless absolutely necessary. Indeed, not all these individuals are necessarily limited by wages in doing so. Nevertheless, healthcare continues to crowd other economic activity in the marketplace - in part because of how its incentive structures are aligned.

In a broader sense, the inefficient organizational capacity of healthcare could also be negatively impacting international monetary flows. How so? First, consider that even as the Fed attempts to maintain economic stability in the U.S., it also bears a degree of responsibility for a worldwide level of resource capacity. That's how important the Fed's influence became, for monetary flows in the twentieth century. But consider the juggling act the Fed seeks at home, as it attempts to counter any potential internal inflation, regardless of the source, via a 2% inflation cap.

Unfortunately, these hard limits on aggregate spending capacity - even as pressing real economy factors continue to be neglected - are leading to further sectoral imbalance. Consequently, healthcare's internal inflation contributes to the current Fed tightening cycle, which gradually diminishes total resource capacity even as other developed nations are attempting to maintain sufficient aggregate spending capacity. In all of this, Washington attempts to cut long term healthcare expenses by trimming the provision of healthcare, altogether. Of this current tightening cycle, Charlie Billello of Pension Partners writes:

In stark contrast, the Bank of Japan (BOJ), Bank of England (BOE), and European Central Bank (ECB) have all cut rates since December 2015. 

Clearly, there are many contributing factors to the Baumol effect other than healthcare. Even so, this sector is a major component of today's open-ended equilibrium approach to the redistribution and nominal compensation of time value and human capital. And yet even though U.S. healthcare costs are high in relation to other developed nations, that's not to say single payer markets don't face their own sets of problems in terms of marketplace choice.

At a basic level, the problem which exists for healthcare, is like that for many other forms of time based product: inadequate representation of overall time value in the marketplace. One reason it is so difficult for healthcare to provide sufficient price signals in the U.S., is the fact price signals first need to coordinate resource capacity which is fully represented. Unlike a wide range of resource utilization in the marketplace, overall time value is woefully underrepresented in terms of system potential.

Since time aggregates are a fixed scarcity in relation to the random scarcities of other resource capacity, the option of time value in relation to itself, would finally make free markets in time value a reasonable option. Further, time value as a price signalling process, would particularly help democracies which now face tremendous struggles in their attempts to coordinate welfare states. In order for healthcare to gain free market options in terms of choice and preference, more participants need to be brought into the process.

Decentralization Now!

First, I want to reassure my readers that this post title is not intended as a political threat to anyone. Rather, what I wish to accomplish - via my own limited skills and means in a non professional capacity - is an appeal to the freedoms upon which nations have flourished, at least until the recent decades of increased centralization.

What initially prompted this post, was a recent Foreign Policy article from Daron Acemoglu, in which he argues that the political institutions in the U.S. are not enough to "save" us from Donald Trump. Unlike his previous work, where he noted that the success of nations depends on their institutions; here, Acemoglu emphasizes that the citizen is now the last defense. Hence others are now wondering: what to think, about this change in his stance? And Tom Pepinsky wrote:

One is to see with clear eyes that institutions do not constrain politicians automatically.

At some level, the citizen has indeed become the last defense. However, I believe that the appropriate response exists at an economic- not political - level. In other words, the best way forward is not resistance to Washington, but alternative solutions that provide more inclusive means for citizens than what today's institutions are now capable of. In particular, for those who might be visiting my blog for the first time, I advocate for viable solutions for those who are now constrained by small incomes, in environments which primarily demand large incomes to survive.

Calls for decentralized economic and governmental options have died down somewhat, in recent years. In retrospect, it's not difficult to see why. Due to wide income variance, decentralized government can become problematic when expressed primarily in monetary terms, because these structures also suggest escape from centralized structure, on the part of those with high incomes who continue to derive benefit from that same centralized structure. Consequently, the potential benefits of decentralized settings in which low income groups would finally have the discretionary freedom to create their own wealth, have been missed.

The aggregate time value of citizens as a whole, affects how efforts for decentralization play out in the real world. Limits to production rights for personal time use, means millions of citizens are not able to contribute to the validity of their own destinies. This matters, because when it comes to shared taxation responsibilities, time value is finite and extremely scarce, while other forms of resource capacity are not only random, they are randomly assigned. Hence the current disconnect between personal responsibility and the institutional/infrastructure requirements of our time. It is those requirements, which stand in the way of any possibility of an inclusive stance on the part of presently existing institutions.

If economies are to remain valid for small incomes, both infrastructure and local environment need local exposure to personal design and interpretation. All of the local time value that is possible, needs to be completely accounted for within a context of shared responsibility. Where national governments have stumbled most, is the redistribution of product which includes time scarcity, as protected by knowledge use limits. When time value can only be shared via exhaustive investment requirements, this meritocratic framework becomes the first exit ramp, on the highway to exclusive outcomes and lost freedoms.

Even though the new institutional framework of the equilibrium corporation would include its own infrastructural limits, these would be devised along an entire spectrum of production and consumption possibility in terms of the resource utilization of the groups which take part. Hence even though an equilibrium corporation would appear to have exclusive (local) communities, community setting options as a whole would be purposely inclusive by institutional design. If one cannot find sufficient means to match time value with others in one community, there would be many more communities in which further possibilities exist. Each little community would have its own preferences, by which local citizens could share the responsibilities that come with time based product, via their own personal means. Is this not a better approach, than imposed, top down default "solutions" that countless numbers of citizens are still expected to follow?

As it turns out, large nations such as the U.S. have proven incapable of providing these production and consumption options in large scale settings. When we attempt to impose single settings for production, consumption and infrastructure, we are in effect purposely limiting the freedom of all citizens. Yet there is no reason that high income taxpayers should have to bear the burdens of low income citizens who could realistically create their own forms of knowledge based wealth. Likewise, there is no reason why low income citizens such as myself, should have to pay for a wall they neither want, or need.

Social Contracts and the Choice to "Opt Out"

Since important national budget issues are already being addressed, what is immediately at stake? The social contracts which involve mutual coordination for time based product, aren't just important for citizens, but also national prosperity. One example involves a study which gained attention last November. The researchers highlighted "opting out" which occurs in emergency rooms. From CNBC:

A new study that looked at more than 2 million emergency department visits found that more than 1 in five patients who went to ERs within their health-insurance networks end up being treated by an "out-of-network" doctor - and thus exposed to additional charges not covered by their insurance plan. 

And the average out-of-network bill those patients faces, unless their insurance plan ultimately agreed to cover it, was more than $622...But the bills can be much higher than that, according to the researchers, who pointed out that one patient they were aware of faced a potential balance bill of more than $19,600. 

Still, this is only a limited opt out example, given the fact physicians already have limited participation with either Medicare or Medicaid patients. Often, individuals with chronic illness and/or disability, may go months at a time without a primary care provider, should they lose one. Or when they finally locate another, may need to drive several hours one way, in order to reach appointments. It's not always possible to gain healthcare provision in nearby cities, as physicians who take Medicare and Medicaid tend to have very full schedules.

Traveling long distances for healthcare can be difficult enough for those who still have reliable transportation. But as health declines, one faces additional uncertainties regarding doctor's visits, should their vehicles have some of the same ongoing maintenance issues that a physical body may face. If there's one thing worse than being stranded on the side of the road with no one nearby to call on, it's being stranded on the side of the road in approaching nightfall, with a patient in the car who really should be in the hospital. Yes I've been there, and after circumstance like this, decades of driving confidence can flat out disappear.

Where opt out for the physician is a matter of being able to freely choose patients, opting out for others may simply mean leaving the participation framework that exists. Now, an even larger opting out issue is at stake, as Washington contemplates a partial opting out for Medicaid provisions. While the extent of block grants involved is uncertain, the bigger message is clear: as healthcare gradually reverts to the states, policy makers can finally achieve much needed cost reductions. There's just one problem. As the healthcare marketplace is currently designed, national output is more likely to suffer, as no one really knows the kinds of supply and demand that would exist were there free market conditions for healthcare.

These supply problems originate with the ways in which healthcare became a social contract in the twentieth century - especially in the U.S. Since the opting out process realistically only goes one way (doctors and healthcare providers choose the patients they can serve with their limited time), it is most inefficient and illogical. Even though doctors and healthcare providers are quite reasonable in making the most of their time scarcity, other citizens cannot make good collective use of their time to amend the fact that existing hours on the part of physicians and healthcare providers are severely limited. This lack of citizen options re rights to produce/apply knowledge for healing, is all the more illogical, since there is little if any cultural acceptance for suicide in the U.S.

Ultimately, if democracy is to remain viable, everyone needs realistic opting out and opting in for time based product processes. Citizens with low incomes need the same formal opt out options that healthcare workers have, so they can to take part in local "opt in" system alternatives. Opt in alternatives would mean knowing one's budget need not be devastated after years of resisting healthcare markets designed for higher income, only to need them anyway, in the event of emergency or serious illness.

Knowledge use systems as a new form of social contract, would encourage further development of applied and practical knowledge. Doing so is all the more important, given the fact that block grants for states would run their course long before existing markets are addressed. With the budget cutting in Washington, there's little time to lose, for citizens to gain the kinds of production rights that could secure knowledge use and prosperity, well into the future.

Liberty For All, Regardless of Income

Is it possible that lack of freedom in the marketplace for those with limited incomes, negatively affects the freedoms of those who have more? I believe this is a fair question. However, my framing in this matter, could possibly account for the fact some right leaning folk likely question whether my "claims" to a libertarian point of view, are valid.

Meanwhile, others on the left are just as likely to question my defense of a free market approach. I believe that market dynamism is central to well being. But how can markets be considered truly dynamic, if they don't function well for a wide range of income levels? Further: how can individuals expect to reciprocate for societal responsibility - for anyone - if they have little valid purpose in the economic constructs that define their lives?

Some say they wish progressives knew what it was like, to be responsible for running their own business. Fair enough. Sometimes I also wish more people on the left understood how scary the process of survival can become, when there are too few remaining economic options, by which to actively take part in life. Granted, plenty of folk on the right totally get this, but find the matter too frustrating to actively contemplate. And many who are not needed by other individuals or institutions, are living on borrowed time. Chances are, they are keenly aware of that fact.

Consequently, I advocate for free markets not just for the rich, but also for the poor in spirit, along with anyone else who may also have a limited amount of money to spend. For these individuals, both their income potential and time value deserve more respect than they have received thus far. Even though I disagree with constant minimum wage increases, it is quite pointless to react to them, if non tradable sector representatives are constantly seeking higher prices for terms of economic engagement across the board. In all likelihood, the lack of free marketplace options - especially in terms of time based services creation - now contributes to a growing vulnerability for the personal liberties of all citizens.

Sandy Ikeda has spoken of the fragility of liberty, and the fact it can too easily be lost for centuries at a time. In "The Urban Origins of Liberty", he wrote:

The idea of liberty emerged in the struggle between the forces of collectivism and individualism. It is the idea that each of us has a rightful sphere of autonomy in which we may be free from aggression. In politics this manifested itself as liberal democracy, in economics as market competition and in the broader social realm as scientific advance, artistic expression and religious tolerance.

Most important, liberty is not so much about anyone's right to consume specific forms of goods, as it is one's right to produce for - and actively engage - in the marketplace. How can anyone expect to consume, what is purposely prohibited from production? And the fact that too many rights of production have been lost, accounts for the fact that policy makers are anxious to be rid of programs which became excessive burdens because the rights of production were too limited, to begin with.

Indeed, for Obamacare, there is presently no rational "replace", other than a reversion to the twentieth century form of healthcare, which supplanted all other previously existing options available to most income levels. The twentieth century health care of the U.S. created investment incentives and provisions which were primarily, and understandably, aimed at middle to upper class levels. But consequently, it is pointless to expect "healthcare for all" from this system. Meanwhile, the coming years are likely to be filled with the struggles of the "not so poor" to retain their own, increasingly fragile healthcare access.

More than anything, my aversion to government redistribution for the poor, can be attributed to the initial mistakes of granting too much marketplace responsibility to too few individuals, for some of the most basic time based product of our lives. There are simply too many places where government largess needs to reach, before it ever gets to the small wage levels so many will experience in the years ahead.

Which is why I believe much more would be gained, if the forgotten, the frustrated, the "redundant", the misunderstood, the "supposedly" untrustworthy, the ones with health based challenges, the socially inept, in short, all those who are poor in spirit, at least be given a chance to recreate economic life on their own terms. There is simply too little room for these groups in the near future, as politics is more likely to become a battle among competing special interest groups for the spoils of the economy that exists, now.

There's little liberty to be had for those who are unemployed or are on a small income, too little freedom to live by one's identity and purpose, if one is without the "appropriate" college credentials or the career that gives the green light to do so. Liberty is also hard to come by for those who are "freed" from prison, only to find themselves in a different prison of society's making.

Where for millennia there were value in use knowledge networks which people from all walks of life could tap into, these have been mostly reoriented into the channels which those with the "right" credentials can use. If redistribution were an actual possibility for all, perhaps this limited knowledge use framework might be understandable. But there is not sufficient redistribution for everyone who wants it, nor is such imaginary redistribution likely to occur in the near future. Therefore, it is time to define wealth on broader terms, than what currently exist.

Those without credentials, and indeed some who can't put credentials to good use, need to be able to create alternate knowledge use networks. It is too difficult for many, who - even though they are diligent and prepared - to make the necessary connections with others in the knowledge based networks that already exist. Practical and useful knowledge once again needs to be freed. Liberty for all, regardless of income, starts with a knowledge use network that is not limited to those with college degrees and the "appropriate" jobs. Otherwise, there is too little means to heal the divide between rural and city life, even as rural voters recently sided with the political party which at least appeared more willing to take their personal concerns into account.

At least some Republicans would like to face cronyism head on, but doing so is not easy. Too much government redistribution, much of which is initially intended to assist lower income levels, only ends up parked at higher income levels. Hence the very act of redistribution, quickly goes out of control and out of reach of any logic. This raises the bar of economic entry for all concerned, along the entire spectrum. Presently, it's impossible to assist the poor, because of the massive government obligations that are already "baked into the cake" for everyone else. Hence a suggestion: before anyone loses their cool at the enormity of the task, please give the disenfranchised a new chance to recreate their own economic realities. Doing so might actually be easier, than making sense of the subsidies tangle in Washington.

Less Economy? Less Room for Human Nature

It wasn't always this way. However, today's limits to growth are all the more threatening, because much of the game of life is now based on formal economic precepts, right down to whether people gain from personal interaction with others. Resource management - in most respects - has become based on how it fits into the broader economy. Consequently, what people do - and how they go about it - is defined on economic terms to such a degree, that they find themselves at an almost complete loss, otherwise. Which is why it is so important to make certain in the near future, that productive economic complexity is not just an option for higher income levels, but for people of all income levels.

While some still question the validity of connection between economies and human nature, others - such as Adam Smith - stressed the positive social effects, of what was a new economic reality which was just getting started. Indeed, some are still willing to explain how economic life contributes to humanity, in that it makes far more freedom and choice possible. Why then, aren't more people willing to point out, how this process also works in reverse, when societies give up on long term growth potential?

I'm concerned, when conservatives, progressives and libertarians alike, question the importance of valid economic expression for everyone, through the course of their lifetime. Digital screens - in spite of the value they hold - are no substitute for honest to goodness interaction with others on a daily basis. Yet presently, there is a dearth of valid economic templates by which to do so. Which means there are not enough honourable ways for people to live and be, in the real world.

Mostly this post serves to make a simple point. Consider the growing unease and public reaction, against those who have limited means, whoever they may be, across the world. The example I want to provide is admittedly a bit stark, in that it illustrates more polarization than I am normally comfortable writing about, for which I apologize in advance. Indeed, I'd previously talked myself out of this illustration more than once, but it will become clear to the reader shortly, why I decided to use it. Fortunately I've been able to gradually move away from overtly emotional posts, given the fact the world is awash in emotion which is not always helpful.

First, imagine living in close proximity to a valuable mineral mine. This mine is also a somewhat random component, of what are broader economic choices and existing options. Hence some locals directly benefit from the mine (via employment or ownership), with little negative economic impact on those who don't. In other words, the random nature of the mineral (in terms of an ongoing consumption base), does not directly affect the production or consumption options of other local participants. Groups can "capture" and manage the wealth of many forms of tradable sector activity, without undue negative effects on the potential economic value which other participants continue to hold, in relation to equilibrium wealth constructs. Indeed, the random nature and lack of consumer "necessity" for tradable goods, tends to make selective group management a desirable aspect of this form of economic activity.

Now, imagine that the aforementioned mine, is instead one of knowledge use, for what also happens to be a basic component of human need. In non tradable sector activity, wealth capture thus far has worked differently from what occurs in tradable sectors, because non tradable sector representatives have massive incentive to capture wealth via limits to production. Unfortunately - carried too far - this process of knowledge use limits (capture) can eventually undermine broader general equilibrium conditions. How so?

When total aggregate value for a basic knowledge use component - in this case, healthcare - is claimed (hence defined) by a specific group, the basic knowledge use construct will eventually diminish total wealth capacity at general equilibrium level, as secondary market formation (which today's healthcare is part of) overrides the allotted space for primary market formation. Further: since the product in question is something everyone needs at various times in their life, the result is diminished economic capacity in terms of both production and consumption of all resource capacity not directly related to healthcare. Artificial limitations for basic non tradable sector resource sets, result in real limitations across the board. The result is less economic potential. But, again, how would this make anyone "less human"?

The artificial scarcities of non tradable sector activity are more closely associated with zero sum scenarios than people realize. Extreme public opinions are more likely to be voiced, when the demands of non tradable sector activity become too harsh for general equilibrium conditions. For instance: when basic healthcare is subject to artificial scarcity, the problems experienced by lower income levels, spill over into all income levels (plague, etc). Which is why some would prefer that the actual numbers of lower income levels be limited, where and however possible. Yet the fact of artificial scarcity at the outset of general equilibrium conditions, is mostly missed, as people become increasingly threatened by whoever appears to already be "less human" in some capacity.

Even though alt-right is louder in their complaints against those of limited means (in the present), the public position of the left has nonetheless been more counter response, than substance. And by no means are conservatives alone in assuming that anyone of limited means should also have limited responsibility. Some conservatives would rather that poor people not have children, at all, and some would just feel better if these people were in prison so that no one would have to worry about them. Does this mean that progressives think differently?

In recent years I've noticed a social media meme that suggests otherwise. Poor people should not have the responsibility of animals, I've been told, particularly since they cannot afford the vet bills. In other words, connect the dots: Now people expect that some should go through the entirety of their adult lives without real connections to children or animals, in large part because it's difficult to pay the bills that have been imposed by the artificial scarcities of knowledge use. Are we expected to do absolutely nothing of consequence or meaning in our lives, are we expected to have no responsibilities if we are of limited means? Indeed, what if one at least has the possibility of unconditional love from children and animals, when there is little "love" to be had from those with substantial economic connections? How is a person who has too few production rights in the marketplace, expected to live?

Recently I had to say goodbye, to a cat which lived with me for seventeen years. We shared a lot of time together through thick and thin. Chances are, my days of adopting animals are now done, I'm old and at this point I need to be happy with her memory. However, in recent years, social media has provided too many numerous examples of the discomfort some feel, when people of limited means choose to take care of animals. Here, at least, I have to ask: how else do you expect those of us with limited means to remain fully human? What level of responsibility do you feel we might rightfully assume in this world, which supposedly is not "too much"?

If people of limited means could gain a value in use educational framework which includes basic healing, perhaps some of today's social exclusion would be diminished. We would not ask these new production rights on terms that take from the resources which today's healthcare already requires, but in ways which generate new wealth. More than anything, we need an economic reality that allows everyone to be more fully human, if only so that social media will stop this incessant reasoning how such and such group has no business existing in the world. Okay, this post was a bit over the top, and I'm anxious to get back to "regularly scheduled programming". Still, I believe my feline friend would have appreciated these thoughts, and I will miss her greatly. It never mattered to her, if I didn't have a lot of money. I think she would have liked that I argued for poor people to have a chance to love animals too. That's the least I could do for her.

Apologies are also in order for any healthcare workers I may have upset, who have been concerned about present day marketplace limits for knowledge use all along. How many of you have wanted to heal others, took care of the necessary education and commitments of in order to do so, only to discover that you could scarcely - if at all - provide healing where it was most needed. With a little luck, you will finally gain the ability (with government and society's blessing) to teach those of limited means, to generate alternative settings in which a less strictly defined marketplace becomes possible for these groups. Not only would such a reality bring more hope to the lives of those who can't participate in today's healthcare systems, but also help to relieve long term government budget problems, as well.

Update: The love of a soldier and her dog

Is Time Based Product Amenable to Value in Exchange?

It's difficult to know for certain. All the more so, during periods of economic stagnation, when time based product - as a secondary component of market formation - distorts the tradable sectors which directly coordinate prices, supply and demand, and output. When a slow growth economy is services dominated, and merit based compensation is the only means to provide time based product, this can limit all output in aggregate, as services gradually become limited in their turn as well. As this process continues, populations become less able to support the tradable sectors which generate the initial revenue for non tradable sector formation.

Fortunately, the time arbitrage of knowledge use systems would make time based product more amenable to value in exchange capacity. Presently, the growth limitations of asymmetrically compensated time based product, remain hidden in ongoing struggles which often appear as though austerity, versus the roles of fiscal and monetary policy for long term growth. I was reminded of the validity of the post title question, after reading this from David Ricardo:

In speaking, then, of commodities, of their exchangeable value, and of the laws which regulate their relative prices we mean always such commodities only as can be increased in quantity by the exertion of human industry, and on the production of which competition operates without restraint.

What is problematic about time based product in its present formation? Unlike the time value associated with tradable goods, when high quality investment is a central component of time based product, the investment does not increase the quantity of time based product available to the marketplace. Human exertion increases the value of time based product, but not the quantity of product as in tradable sectors which would otherwise generate further revenue to compensate additional resources utilized in relation to time value.

Lacking a sufficient quantity of time based product, multiple institutions end up paying for increased investment in skills capacity, as indeed as occurred for the array of institutions which now pay for healthcare, in addition to the consumer. Growing budgetary restraints in this regard, also account for the fact that automation will gradually begin to substitute even for skills at the highest levels, as it becomes more difficult for budgets to meet sufficient asymmetric compensation for vital skills sets.

Marketplace representation of time based product exists solely in relation to itself (i.e. the potential reciprocity of time aggregates), which is why time based services are not amenable to the same direct coordination that money provides for other forms of resources. While money can partially coordinate prices for time based product, it cannot do so as a first order process, given the secondary nature of time based services in the marketplace. Other resource relationships are more capable of providing clear price signals for large scale coordination processes. So long as finished product exists separately from time value, money captures the relationship between both resource availability (scarce or not) and also the ways in which time value affects a given product.

Healthcare - for example - would only reflect value in exchange in purely monetary terms if it were completely automated. However, time arbitrage could preserve sought after human activity, by providing a value in use function for healthcare time investment, which allows time based healthcare product to approximate a value in exchange framework. The "catch"?  Value in exchange in this instance, would be a result of coordinated product in terms of time, rather than price. Why would such a strategy even be worth pursuing? Is that really economic? Let's pick up Ricardo's discussion regarding value, from the above quote:

In the early stages of society, the exchangeable value of these commodities, or the rule which determines how much of one shall be given in exchange for another, depends almost exclusively on the comparative quantity of labor expended in each. 

"The real price of everything," says Adam Smith, "what everything really costs to the man who wants to acquire it,  is the toil and trouble of acquiring it"..."Labor was the first price - the original purchase-money that was paid for all things." Again, "in that early and rude state of society which precedes both the accumulation of stock and the appropriation of land, the proportion between the quantities of labor necessary for acquiring different objects seems to be the only circumstance which can afford any rule for exchanging them with one another."

Today, healthcare is still paid for according to the original price of labor - i.e. the amount of labor that is actually required in total for an individual to present a product. It's fair to suggest that healthcare remained in the "primitive state", in terms of labor compensation, as contrast with the labor associated with tradable sectors.

Granted, it makes sense to compensate a physician for the extensive investments taken in order just to practice. However, if the value of the physician's time based product were equivalent to that of a tradable good, it would be as though - instead of paying the price of a toaster in today's terms which means good deflation benefits from divisions of labor and organizational capacity  - the product is instead compensated in consideration of the fact one person undertook this vast investment process, alone. It would be like paying someone to build a toaster who had to seek out each piece and assemble the whole toaster, again, alone.

Presently, a physician's time investments cannot be tapped as sustainable revenue to compensate him or her during the course of early learning processes. Which makes it necessary for the physician to demand "more" when the time finally comes, in terms of monetary compensation. This effect is also an increase in one's time value in relation to the time value of others. The relative differences in time investment, force down the aggregate time value of those who did not need the same extensive dedication to time investment in order to accomplish various tasks and endeavor. In many instances it is possible for individuals make up differences according to access to other forms of resource capacity, but even this strategy has proven inadequate for healthcare as a marketplace.

When institutions have to share the expenses of deferred compensation for a physician's time investment, they have more incentive over time, to prefer automation which would make it less necessary for them to pay for that level of expense. Hence a physician's time becomes as vulnerable to automation (in aggregate), as the asymmetric compensation of a low skill maintenance worker.

Lifelong education for knowledge use is important. The problem for all of us, is that we make one another wait till an arbitrary point in learning processes, before many of us can ever offer sets of services skills to one another. This process imposes unnecessary expenses on all concerned, and detracts from other resource use potential as well.

No one wants their doctor to know "less" in any relative sense, especially when it's a matter of life and death. That's why multiple institutions have been willing till now, to pay what has been deemed absolutely necessary. But what happens when supply and budgets alike simply become too constrained for this process? It is possible to continuously reinforce (compensate) important skills sets along the entire continuum, through peer to peer sharing of knowledge use and application.

Instead of presenting a barrier for long term government budgets, the time investments of time arbitrage would become a stepping stone process of incremental growth for all concerned. Knowledge acquisition would serve as both investment and compensation, simultaneously. Time arbitrage could eventually put the knowledge use of non tradable sectors on a more sustainable wealth creation path. One that is more amenable to time use as a value in exchange process.

On the Vital Role of the Knowledge Donor

Put simply, a newly constructed equilibrium corporation wouldn't be possible without the assistance of knowledge donors, so this post also serves as an informal appeal to those who may eventually consider the offer. However, some readers might reasonably wonder: why am I discussing such an important subject in a blog post (i.e. digitally) instead of via the normal social circles?

There are several reasons. Health and related issues contribute to a present inability to travel on my part, and I can't be certain whether these circumstance will change. Also: without a college degree, I lack some of the qualifications to approach this matter with others at the level of, say, international summit settings where such issues are ideally addressed. I need to be clear as possible in the years ahead as to what this ongoing project would benefit from, so that others could fulfill similar functions in my stead, should they desire to do so.

On the other hand, I do hope to be able to take part in the organization of domestic summits, eventually. In these summits, other citizens such as myself would be involved who don't necessarily hold advanced degrees. Once my work is finally organized in a viable and understandable form, I'll begin efforts in earnest to reach out (digitally) and share it with others.

Either way, summits would bring individuals together from all walks of life, to explore the possibilities of a directly generated services and time based marketplace for the 21st century. For the participants of domestic summits, college degrees would not be necessary to participate, just as this form of institutional recognition would not be necessary for active participation in knowledge use communities, afterward.

However: in terms of setting up organizational capacity, knowledge use systems and the corporate structure they rely on, would greatly benefit from the personal attention of professional donors. My fondest hope is that this new structure can eventually provide a stronger link between a professional world which is increasingly burdened with society's hopes, and populations everywhere which seek to be a part of progress and prosperity.

While an equilibrium corporate structure would reach out to institutions of higher learning in multiple capacities, professionals are particularly needed to assist with some basic elements in three areas: economic, medical and legal. Many problems in these areas have become difficult to address through general equilibrium means - a factor which helps to explain the name of equilibrium corporation as an alternative equilibrium construct for broader economic access.

Today's healthcare professionals are overwhelmed as governments pressure them to expand their services, even though these professionals often don't have the resources (or backing) at the ready which would allow them to do so. Knowledge use systems could eventually relieve some of this pressure, by making it possible for medical professionals to preserve some of the most important facets of healthcare for broader use.

I mention healthcare first, because of its direct links to issues which so many nations now face. Among the reasons nations are compelled to turn back immigrants at the border, is the fact immigrants require healthcare which local citizens fear is already in short supply. And governments are facing new struggles in their efforts to support present healthcare obligations, as well. For instance, John Taylor reminded his readers that the CBO no longer reports U.S. debt levels higher than 250% of GDP, even though the upcoming fiscal projections are not substantially changed. Knowledge use systems would provide an option, for future generations who remain uncertain about the role of government entitlements for services generation.

Just as basic elements of healthcare would be built into the educational structure of knowledge use systems, so too an understanding of economics, as a basic educational component. Regular readers know that I'm particularly concerned about economic education which includes not only the vital role of money, but also the role of the individual as an integral part of supply and demand. It is the ongoing intersection of time value with resource value, which matters most for populations of all sizes in terms of economic outcome.

Tight money conditions since the Great Recession have led to a relative loss of tradable sector activity, in relation to that of non tradable sector activity. Even though this circumstance is difficult to address in general equilibrium conditions at national levels (especially without a nominal level target), an equilibrium corporation would approach non tradable sector activity through innovative means which gradually diminish its costs, as contrast with those of tradable sector activity.

Several aspects of the equilibrium corporate structure are unique in nature, hence would benefit from legal assistance. Local participants would contribute to a direct marketplace for time value, through a process of mutual employment for ongoing activities in services formation. Incremental forms of ownership make it possible to own building components and land components separately, and time value serves as means to accrue asset formation through mutual educational assistance from a young age. By creating the most flexible forms of ownership possible, the equilibrium corporation can quickly respond to changes, whether those shifts in conditions are environmentally induced such as global warming, or even of a political nature such as secession.

As more individuals find themselves on the short end of economic access, the burdens on those expected to remain responsible, only continue to grow. Today's economic and social issues exist at a level which no longer readily responds to reason or persuasion. Further, asymmetric compensation (through discretionary income and revenue) alone is insufficient for full employment in an automated age, and fiscal measures such as basic income are completely off the mark. As technology substitutes for many of the old work roles, it will take time to restore faith in a future with new marketplace challenges.

Even though symmetric compensation is hardly an ideal substitute for merit based compensation and ability in the workplace, it could nonetheless provide a way for many among the marginalized to regain their hope for a better future. Knowledge donors would provide a most valuable service, through helping to define the original framework where knowledge use systems can begin. At stake is the preservation of knowledge for the foreseeable future, and also, the preservation of time value for all citizens.