Could Building Maintenance Become Less Costly?

The recent condo collapse in Florida serves as a reminder, that many concrete structures are overdue for millions in repairs. And already it's evident how rusting steel contributed to the condo's demise. But what makes steel rebar so important for concrete construction in the first place? Indeed, this is far more than a cost concern for residential condo owners, since much of a nation's physical infrastructure is also composed of concrete and steel. At the very least, a recent Axios article notes some possibilities which might lessen long term maintenance costs for physical infrastructure:

The rebar can be made more resistant to rust, by coating it in zinc, or passing an electric current through it, or making it out of glass-fiber reinforced  polymer, or carbon fiber, or bronzed aluminum, instead of steel. Such actions involve greater upfront cost, while saving a lot of money over the long term. 

It's even possible that some concrete buildings might not need any reinforcement at all, so long as the concrete is only under compression. No steel rebar means no erosion, after all. But that's still a step too far for most architects and engineers - and most buildings will always end up passing some kind of steel pipes through the external concrete, for things like water, gas, and electricity.

While the above recommendations could prove helpful, the higher upfront costs of those initial suggestions are less likely to be adopted in residential construction, where individual owners bear ultimate responsibility for both upfront costs and long term maintenance. What about the possibility of relying on compression instead of steel rebar? For one, I question the rationale that people should pass pipes and wiring through walls to building interiors for utility needs. Not only does this procedure mean higher upfront costs, but it includes long term maintenance requirements which have become prohibitive for lower income groups. 

Fortunately there are viable ways to avoid internal utility installations, altogether. It's time to explore the advantages of external utility compartments, which could be designed without "permanent" connections to building materials such as wood, brick, stone or concrete. Only recall how many of these connections have to be broken, sooner or later. 

External and detachable utility compartments would not only benefit individual property owners, but also those with shared ownership in multi level building construction. The adoption of such technology should make it simple to embrace concrete construction which relies on compression rather than steel rebar. While external utilities might limit design ideas for internal floor space and layout, that would be a small sacrifice, given the ultimate gains in both initial and long term building costs.

Much about future growth and prosperity, depends on our ability to improve building construction of all kinds. Let's contribute to the process with improvements in flexible design. Granted, as a older Baby Boomer, I know it's a bit late to expect innovation which translates into affordable housing retirement options for myself. Indeed, the main affordable "options" for many retirees are deteriorated older homes in need of extensive utility renovations! Small wonder some Baby Boomers are remaining in place (with sizable homes consequently kept out of the marketplace), when they would otherwise seek to downsize.

In all of this, recent questioning about the safety of old condos (many of which house older folks), puts additional housing supply pressures on communities which refuse land sales for tiny homes. This especially affects retirees who lack the stamina to start over with dilapidated housing stock, and recognize tiny homes as a cost effective, low maintenance way to avoid doing so! But who knows, within the next decade, communities might become open to zoning which better reflects retiree's needs. Plus, architects and engineers could also embrace external utility compartment design. If they do, that would benefit people of all ages and income levels, not just retirees. External utility compartments would also make it easier for people of all ages and incomes to renovate older housing stock, some of which otherwise is likely to be demolished due to long term neglect. With a little luck, perhaps the last of the Baby Boomers will finally gain real retirement housing options which retirees such as myself only dream about.

Addressing the Confusing Incentives of Shared Ownership

The tragedy which unfolded recently at Champlain Towers South, has also exposed some basic problems regarding shared ownership for physical properties. When it comes to shared ownership: the larger the relevant structure, and the closer its proximity to other installations, the more difficult it may be for all involved to resolve maintenance issues. 

Many who have paid close attention to these events in Surfside Florida, are at least gaining a better understanding re complexities in shared ownership responsibilities. As it turns out, when maintenance delays accumulate exponentially, the situation will sometimes prove impossible to successfully resolve. For instance, in the case of Champlain South, due in part to "extensive concrete deterioration and corrosion of reinforcement", Morabito Consultants indicated it would not be able to perform some much needed remediation that had been deemed necessary. There were also questions in this October 2020 assessment, whether full repairs might negatively impact nearby structural features. 

Hence Champlain Towers South became "a catastrophe in slow motion". An article from CNN discusses some of the relevant ownership issues:

The disaster appears to have exposed some of the limitations of condo associations, which are made up of condominium owners with a vested interest in the property but that seldom possess much expertise in structural engineering. And it has raised questions about whether other residential structures could be at risk in Miami-Dade County, where sea levels are rising, the salty air is corrosive and nearly two-thirds of all commercial, condo and apartment buildings are as old or older than the 40-year old edifice that went down.

Granted, the collapse doesn't necessarily mean excessive risk elsewhere, since much also depends on the degree of ongoing maintenance. Nevertheless, as Peter Dyga, the president of Associated Builders and Contractors noted,

We're probably going to overreact. But it's understandable--people want a level of assurance that their building is safe.

It's being said this is a "wake up call on many fronts" - one which basically translates into more laws, regulations and building inspections. But might this be our only societal response? How will additional regulations accomplish what is truly needed in this instance? Already, the condo residents were quite aware of ongoing problems due in part to regulations already on the books, not to mention ongoing inspections. Chances are, the main problem was finding a "meeting of the minds" in a timely manner. Of course, what would have been timely, given the extensive concrete issues?

These shared ownership issues are problematic in much of housing in general. Only considered for instance, how shared family ownership in single family housing (which may be further undermined by family law rigidity), often results in extensive housing deterioration. Clearly, the difficulty of achieving "meetings of the minds" can mean maintenance breakdowns for shared ownership in every capacity imaginable. 

For one thing, proactive market frameworks are needed which leave more room for individual decision making as to ongoing maintenance. In other words, more promotion of home ownership specifically for individuals. However, this post is primarily about problems in shared ownership and how they might be addressed. Perhaps the best possibility is a "meeting of the minds" in free market building innovation, to reduce need for intensive long term maintenance, altogether. Only consider that when ongoing maintenance is neglected, that often leads to a costly "starting from scratch" at some point. 

Meanwhile, we've been learning some hard lessons about basic 20th century innovations. Concrete maintenance is beginning to emerging as an important issue. Equally important however, are the long term maintenance problems of today's plumbing and electrical systems. Even though 20th century plumbing brought tremendous gains in health and public sanitation, much of it was constructed in ways which pose additional stressors for buildings of all kinds. Some of what is becoming obsolete, is not easy to remove and replace without compromising structural integrity. Equally important, is how the fact plumbing pipes and electrical wiring were installed behind walls and interiors, makes it difficult for lower income groups or (many) senior citizens to participate in basic maintenance responsibilities. 

Even when monies are available for extensive renovations in older structures, it sometimes proves impossible for people to live normal lives (in place) in these buildings, once extensive maintenance needs arise. For example, consider how even the desire of condo owners in Champlain South to keep their pool in use, is one factor which made complete renovations impossible. It's not difficult to extrapolate this example to deterioration in older homes that are continuously lived in and essentially co-owned by multiple family members, once electrical and plumbing systems near the end of their useful lives. Often when completely new beginnings are required for these systems - especially if they have otherwise damaged the buildings in some capacity - it may prove impractical to live in the affected buildings for at least a full year.

Ultimately, greater flexibility is needed. It's time to design external home components for plumbing and electrical which can be changed out as needed, so we won't routinely have to take jackhammers or axes to "permanent" building fixtures. Doing so is almost always a major inconvenience! As it turns out, much of our so called building permanence since the 20th century has been largely an illusion, especially in a time of climate change. The need for greater building component flexibility should be obvious to everyone by now, since the short life cycles of plumbing and electrical systems in interior walls are becoming more evident by the day -  let alone what occurs when concrete and steel are exposed to the elements! Let's build in the future, so that both interior and exterior mini-demolitions will become less necessary - likewise the major demolitions that can be such a relief, once failed notions of permanence get out of hand.

Flexible Ownership Frees Us. But Have Markets Responded?

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

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

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

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

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

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

Incremental Ownership Could Restore Hope for Millions

The COVID-19 pandemic poses problems not only for small businesses, but homeowners and renters as well - especially those with limited incomes. Indeed, according to CNBC, 28 million individuals could possibly end up homeless. For perspective, approximately 10 million lost their homes in the Great Recession.

Alas, when it comes to maintaining financial flows, rental costs are similar to the monthly obligations of mortgage payments. Both can be substantial enough to derail personal autonomy for renters and homeowners alike, if sources of steady employment are jeopardized. Given this reality, when income streams are disrupted for any reason, it's not always easy to regain one's footing afterward.

Incremental forms of ownership could do much to lower the risks of economic uncertainty for all concerned. And should employment opportunities prove unreliable, flexible ownership options could allow many individuals to gradually rebuild their lives without the undue risks so often posed by the costs of housing. By purchasing the most basic elements of living needs first, when income streams are sufficient to do so, ownership can accrue incrementally on terms that don't require debt. Fortunately, "pay as you go" ownership could lessen the monthly obligations faced by those with limited income and/or unstable employment sources. Once individuals are able to establish basic elements of ownership, temporary disruptions in wages would be less likely to derail the whole process.

Also, from a macroeconomic standpoint, flexible ownership arrangements could ultimately lead to simpler roles for monetary and fiscal policy. By reducing the contractual debt burdens of housing, monetary and fiscal policy would have less incentive for overreach. Greater flexibility for citizens could mean greater flexibility in policy responses. After all, since private enterprise in the U.S. has considerable flexibility to hire and fire at will, is it not logical to offer citizens that same degree of flexibility in markets for housing?

Given the wide variance in income levels today, incremental ownership could prove an advantageous response to economic uncertainty. Many citizens could thrive in environments where simpler living arrangements are possible - citizens who otherwise tend to struggle with what is presently required. Already, companies are starting to experiment around the world with a wide array of building materials and modular components. Hopefully, there will also be communities in the U.S. in the years to come, where simpler ownership options are welcomed and encouraged.

Basic Living Needs are Important for Long Term Growth

A quick economic recovery may prove more likely, if society does not neglect market potential for lower income levels. These markets tend to be built around basic needs as well. While I normally advocate for long term structural reform for low income levels, productive short term responses are equally important. If one isn't convinced this form of market representation really matters, only consider how companies such Dollar General and Walmart continue to prosper in pandemic times. These corporations share a similarity of willingness to provide for the needs of low income groups. Why can't more business models assume a similar useful approach?

It's not difficult to envision how market potential could be tapped, for basic needs in non tradable sector capacity. Indeed, entrepreneurs who are willing to invest along these lines, might also gain recession proof models as their reward. In particular, better market solutions are needed for low income groups which already faced substantial housing issues before the pandemic. How might one consider business possibilities for these groups?

For one, mobility strategies are key. Nevertheless, clear usage models or patterns are necessary, to prevent confusion with business strategies geared toward middle to high income levels. An apt example re the latter, is standard RV park rental costs, not to mention the expense of purchasing recreational vehicles or other transportation heavy enough to tow camper trailers. Fortunately, there's a wide range of amenities in RV and camper markets which could be made more accessible for lower income levels, by making their manufacture more portable and less dependent on expensive infrastructure or transportation.

Why hasn't RV living provided reasonable options for lower income levels already? A Google search result concerning RV park costs (and posted in 2014), illustrates how this market has been mostly out of reach of low income levels for some time:

Overnight campsite and RV park fees with hookups typically range from $30 to $50 per night or more. That is $900 to $1500 per month. However a lot of full timers avoid paying anywhere near that much and average closer to $500 to $900 per month. 

Alas, good luck finding suitable camps close to one's work on the lower end of this range! Since transportation costs make additional demands on small monthly wages and fixed income, many individuals end up living in their vehicles while furtively seeking places to park overnight for no charge. This reality needs to be changed.

Nevertheless, one challenge for low income market representation, is the understandable safety concerns on the part of communities which hesitate to provide temporary residence for low income groups. Because of these concerns, when land use is permanently altered with the appropriate physical infrastructure, often the only way business proposals for RV parks can get through, is by convincing communities that only financially secure consumers (middle and upper class) will be allowed. This is an important reason why lower income levels have lacked sufficient access to many living options which would otherwise be more affordable than traditional housing.

Perhaps the most feasible way to overcome this impasse, would be to seek out land where portable physical infrastructure can be brought in, rather than imposing permanent land alterations on reluctant communities. As to RV parks and similar arrangements, what about empty parking lots where big box stores and malls are no longer functional? Portable infrastructure mobile units could be trucked in, allowing entrepreneurs and communities to experiment with trial periods to discover whether proposed operations can prove suitable for all involved. Since safety issues would be carefully observed during these trial periods, some of the inclination to disallow low income groups could be overcome.

There are multiple options for what might be tapped on site or else trucked in. In some instances, local electrical, water and sewer connections may still be operational. In other instances, parks could cater to people without RVs by bringing in trucks containing portable showers, toilets, kitchen amenities, and even platforms where building components are configured for sturdy yet temporary shelters.

Such possibilities could also improve economic access to cities and regions where housing markets have been restrained in recent decades. Plus, these suggested business arrangements for underutilized properties, might ultimately help alleviate much of the hidden homelessness which now exists.

Flexible Building Components Could Save Lives

Once extensive manufacturing innovation finally kicks in, flexible components might even make home ownership feasible with only an income of $12,000 per year. At least one can hope! Importantly, many different groups are closer to this level of income than it may seem, not to mention the fixed incomes of Social Security checks. Clearly, calls for "living wages" will continue, if our non tradable sectors are not able to build real wage potential via production reform.

Recall also, that $1,000 a month is a frequently cited basic income possibility, in the event of technological employment disruption. But what would basic income accomplish, if non discretionary needs are mostly out of reach? Alas, this level of income, significant though it may be for the provider, still leaves recipients too dependent on the assistance of others. Without a concerted non tradable sector response, millions could remain unable to create useful and productive lives for themselves. Indeed, deaths of despair often stem from such realities.

However, the pandemic provides a more straightforward example, how independent living made possible by flexible components, could save lives. As it turns out, the most dangerous transmission of the virus occurs via households where people regularly congregate under the same roof. According to medrxiv:

All identified outbreaks of three or more cases occurred in an indoor environment, which confirms that sharing indoor space is a major SARS-CoV-2 infection risk.

Even though transmission takes many different forms, repeated social interactions at close range is particularly dangerous due to increased viral loads. Consequently, healthcare practitioners often attempt to isolate themselves from family members, when risk of infection is exceptionally high. Yet being able to do so is not always easy. Indeed, some physicians make temporary living quarters in backyard tents, to mitigate the risks to their own families. At the very least, individuals sometimes loan recreational vehicles and travel trailers to healthcare workers, where zoning permits them to do so. Other communities are stepping in and providing hotel rooms for much needed isolation, as well.

Besides addressing these short term realities, flexible building components could also prove well suited for a longer term context. A recent Brookings article notes how the crisis only exacerbates the problems low income groups already faced, in their efforts to secure reliable employment and housing. All too often, when extensive virus transmission occurs under one roof, it is partly the result of individuals having doubled up with other family members, after they experienced difficulties tending to obligations on their own.

Not every community is willing to make room for mobility options in living and working needs, and NIMBY impulses will doubtless remain one of life's constants. Still, some communities may decide to take a new and constructive approach. Clearly, the same market potential which opens ownership capacity for a wider range of income levels, makes room for new definitions of dynamic community in the process. Should flexible building components be adopted in the near future, these ownership options could help create paths which lead away from the uncertainties of the pandemic. With a little luck, flexible housing manufacture might become one of the initial ways that societies overcome the economic uncertainties of pandemic times.

It's Time to Build Strong, Lightweight, Yet Affordable

As the financial repercussions of the pandemic gradually set in, more of us will become focused on "whatever it takes" to keep a roof over our heads. Towards this end, flexible building components of all kinds are needed - especially for anyone already experiencing difficulties with rent and mortgage costs before the pandemic even began. The more mobile options we have for physical infrastructure and buildings in the near future, the greater our chances of continued economic stability.

Where to start? Initially, until 3D printing becomes more widespread for local manufacture, building components and their associated infrastructure, could be designed and implemented in various locations around the country. Once these new markets start to go into effect, they would gradually assume retail connections in communities which can open their doors to the appropriate zoning and regulatory variance. I continue to hope that plastics manufacturers are already experimenting with materials suited for these purposes. Plus, the more plastics in production which can be recycled locally for more building materials and infrastructure, the better.

In contrast with the response of temporary fiscal stimulus for businesses and employment losses, affordable building components would be a gift that keeps on giving, via lower monthly financial obligations. And even though affordable building components can especially help lower income levels, they would also provide means to "start fresh", for many who face temporary setbacks due to the economic circumstance of the pandemic.

Ownership of flexible building components could take place incrementally. The most basic starter units, for instance, would include built in (manufactured) electrical and plumbing. This would be an especially important regulatory variance, since the costs of normally required skilled labour for electrical and plumbing, tend to prevent home ownership for those with limited income. These costs stand in the way of lower income levels being able to purchase traditional homes which are in extensive need of repair and renovation.

Initially, communities could connect building components with already existing infrastructure such as electrical lines and local water systems. However, an eventual community goal in many instances would be to create more flexible infrastructure options for energy, water and sewer needs. Only recall that when land can be used in ways which allow it to revert to simpler, less costly uses afterward (such as agriculture), temporary use zoning could prove simpler than zoning changes which require permanently higher land use costs.

Chances are, in the near future, job losses will make it difficult for millions of individuals to meet what are continuous financial obligations - particularly rent. Even though fiscal stimulus will provide temporary relief, it comes at the cost of additional long term budgetary burdens. What is really needed, is a long term approach for economic stability which does not create additional financial burdens. New patterns for incremental ownership, could create a targeted response to the uncertainties brought about by the current pandemic.

Needed: Flexible Investment for Impermanence

One reason why people in the U.S. don't save enough, is that investment in the form of personal housing tends to be an all or nothing affair. But is that really necessary? And what if better ownership options could take the actual impermanence of many building materials into account? Incremental investment would also mean flexible building components which owners easily combine or dissemble. Owners could keep using components still in good condition, should a single component fail.

Ideally, many components could be simple enough to be maintained by owners, especially since many frugal individuals balk at the cost of hiring specialists to do repair work for them. What would matter most for some mass produced components, is ensuring that plumbing and electrical circuitry are simple enough to no longer need professional attention once they leave the factory. When it comes to living arrangements, in this instance an inexpensive product which is easily disposed of, could prove to be quite a relief.

Nothing about our lives is truly permanent. The paradox however, is that our physical environments tend to be built with an illusion of permanence, even as cost cutting takes place in ways which ultimately require excessive maintenance and renovation. Plumbing and electrical wiring are still being run through buildings, as if there were little worry of pulling the whole mess apart for major repairs at some point. Since many building materials get connected in ways difficult to amend, doing so is not necessarily worthwhile, unless a property is sufficiently valuable to qualify for gentrification. Consequently, communities end up with many dilapidated buildings which have outlived their purpose, yet there is often little incentive to tear them down and start over.

Flexible building components would make it simpler not only to start anew as needed, but also for the simplest possible forms of instant remodels. Such options would make it much easier for aging individuals to retire without excessive home ownership burdens. In particular, flexible components built with plumbing and electrical circuitry as detachable units, could help even lower income levels to better manage financial responsibilities while aging in place.

Many building components could be mass produced in ways which are far more amenable to decentralized ownership options than is currently the case. Given our present lack of ownership flexibility, consider for example what can occur when "temporary" solutions end up as permanent outcomes. Johnny of the blog "Granola Shotgun", explains a style of Russian apartments, and how basic elements of their construction are now common elsewhere, for oddly similar reasons:

These ubiquitous buildings were mass produced from standardized parts by centralized authorities and were duplicated by millions across the Soviet sphere. This was in response to a housing crisis in the mid twentieth century. They were meant to be a temporary stop-gap solution that would last for twenty five years until permanent replacements were formed, but many are still occupied decades later. As is so often the case everywhere, there is nothing more permanent than a temporary solution.

In all this, Johnny notes that he is less bothered by the aesthetics of bulk housing, than by a dependence on either governments or corporations to maintain them over the long run. Indeed, excess regulations regarding how residents might keep these dwellings fully functional, only makes such dependence worse. He adds:

If an aging apartment is in a desirable location and is occupied by a small number of people who are reasonably prosperous, the situation can be quite livable...If too many budget conscious people are packed tight in an identical poorly maintained flat in a crappy part of the metroplex, life can be unbearable. In other words, it's like any place else in the world.

Importantly, public and private entities sometimes arrive at similar destinations, particularly when it comes to mass construction of today's inflexible housing units. The result?

...institutions driven by vertical integration, economies of scale, regulatory compliance, and the demands of physics and engineering. So hold off on touchy feely assumptions about the left or the right. We're observing convergent evolution and constrained maximization at work here.

Johnny's post is an apt reminder, how twentieth century housing can put anyone with limited resource capacity at a real disadvantage when it comes to managing one's life. Just as more flexibility is needed in housing regulation, flexible options are also needed for the physical components of housing and infrastructure in general. Incremental ownership patterns could make it simpler for millions of individuals to build better lives for themselves. Flexible building options could provide more opportunities for low income groups, and also reduce their long term investment risks.

However, there's much more at stake regarding mobility, given uncertainties such as climate change and the evolving nature of our workplaces. By way of example, a productive response to impermanence with flexible building components, could allow people to regain normal functioning much sooner after natural disasters.

Again, mass production isn't the problem. It's when mass production only creates investment in which personal risk assumes an all or nothing dimension. Why not create mass produced components which can be added, subtracted, or reconfigured without need of massive renovation costs? And why not amend them locally with 3D manufacture? Even better for local community dynamism, would be 3D manufacture which puts local plastics to good (additional) use.

Plus, incremental ownership would be a decentralized option which groups could set into motion as needed after natural disasters, instead of waiting for governments to come to their assistance. Fortunately, it is within our power to make peace with impermanence. Doing so would give societies a chance to use many resources more efficiently, as well.

Musings on Retirement and Defined Equilibrium

Many who have recently turned 65 probably have retirement budgeting on their minds, even though full Social Security in the U.S. for this group is now age 66. Yes I decided to wait. While I've found it helpful to review retirement advice online, lots of suggestions are geared towards people who are retiring on more than Social Security alone.

What about the rest of us? If Social Security income is going to be the only buffer, hard choices come into play - especially if it's just one income for life's exigencies. Chief among these is when we are tending to an aging body and an aging home at the same time. Often, expenses for one are going to edge the other out!

So I've gained new appreciation, for moments when financial care of body and home don't appear as though simultaneously necessary. One consideration re the body option: Medicare costs might initially outweigh benefits, for those in reasonably good health who have managed (thus far) to avoid regular doctor's visits. In particular, basic Medicare doesn't cover as much as one might assume. Perhaps that escalating 10 percent penalty per year on monthly payments, might not be so bad after all if I could tend to some housing needs first. Nevertheless, should a major heath issue arise, I may need to rethink that strategy.

Should our initial major choices run along these lines, recall how - fortunately - improvements in physical environment can also improve health. Two for one budgeting, so to speak. How often does a doctor's prescription actually stem from a house which was "ill" in some respect, making more health problems for its inhabitants as well? This possibility occurred to me when I was reviewing a migraine log with its list of potential migraine triggers, only to realize those triggers can be magnified by a house in need of repairs.

Of course, the above decision making process on my part is a short run approach, or a response to relevant circumstance in the here and now. Wherever we are, however we live, we work with resources we already have in any given moment. But how might our resource options appear, if we could conceptualize new possibilities for long term gain? In other words, what could expand our choice sets for a fixed retirement income in defined equilibrium settings?

Presently, zoning and regulations both get in the way of what most low income retirees can accomplish. Living simply and frugally is no easy matter, when building requirements are excessively rigid and complex.

Hence first, some groups would need to set aside places where the physical infrastructure of defined equilibrium can be legally set into motion. Then, once ground infrastructure is manufactured and locally assembled as a community grid, flexible building components attach to this semi permanent network. These components would in turn attach to electrical wiring, plumbing pipes and fixtures in self contained units. Once old connections need to be replaced, these disposable units would readily detach from others. Old electrical wiring and plumbing would no longer contribute to so many life hassles. What a relief for millions of future retirees, when they no longer have to tear into their homes just to access electrical lines and water pipes throughout the building!

Separate units for plumbing and electrical alone, could immensely contribute to the well being of aging retirees. Yet the benefits don't stop here, since such building options could help people of all ages and abilities. Not only would self contained plumbing units mean less termite damage; self contained electrical units could ultimately mean fewer house fires as well. The added flexibility of these self contained units could make it easier for communities to bounce back after natural disasters. Plus, ground level electrical work between these communities might make it less necessary for power companies to turn off community power during periods of extreme drought.

Alas, potential innovations such as this are not yet on the immediate horizon. But I can dream. After all, the real wage value of Social Security income will only become thinner in the years to come, if we don't get extensive innovation in our non tradable sectors. That said, should these possibilities come to fruition, even low income retirees would be better able to manage body, mind, and house. Again, at least one can hope!

Global Scale Adds to Local Diversity Potential

Might societies remain able to support local and global trade in a new community framework? Hopefully yes, because future prosperity may well depend on doing so. Globalization arguments on the part of progressives and conservatives alike, often don't take into consideration what is actually at stake. For one thing, too many discussions miss how vital it is for anyone with limited income to access affordable global product, even as free traders also tend to miss the importance of recreating local dynamism.

With a little luck, future communities which create local services diversity via time arbitrage, will also continue to advocate for the preservation of global trade. Otherwise, it could prove difficult to keep consumer options as open and diverse as possible. While time based services could be central to local production, by no means is augmentation of basic time scarcity the sole option. For instance, besides more traditional economic opportunities, citizens may also actively take part in 3D manufacture, even if only for their own flexibly constructed dwellings. With 3D innovations, especially in recyclable plastics, one of the most promising avenues for more affordable ownership in community investment, would be the local manufacture of building components and infrastructure.

Likewise, traditional transportation hubs at the periphery of walkable community core, will hopefully continue to bring mass manufactured product to most local communities in the foreseeable future. Nevertheless, daily economic strategies would focus on creating services diversity which to some degree would reflect what is now found in the most prosperous regions of nations. In all this, one imagines how future populations will be able to recreate new local diversity, while preserving the movable feast of global diversity to the greatest extent possible.

It's unfortunate that forms of capitalism which function reasonably well, are inexplicably catching much of the heat for other aspects of modern day economies which have functioned poorly for some time. Even more discouraging, is that the inability to face economic issues where they are most pressing, is leading to a cultural backlash. Everyone needs to take a deep breath, regain perspective in terms of resource scale possibilities and system potential, and put these disabling cultural wars to rest. Also: If product responds to scale with fully supplied markets, breaking up its representative firms may leave more negative than positive effects. On the other hand, if product is vastly limited because it does not scale to full markets due to monopoly, regulation, or knowledge use limits, try different economic approaches to create full market scale, but again, set the cultural wars aside.

Now it is time to address head on, the mixed economy additions of the twentieth century which never quite functioned properly to begin with. By way of example, many aspects of healthcare have essentially proven impervious to reform in recent decades. If we don't create new avenues for economic diversity in non tradable sectors, too many political constituents might end up even more determined to destroy wealth which holds considerable value. Why? Often for no better reason than when everyone gets mad, surely some relief can be had by breaking something!

If we can disregard the impulse to destroy wealth due to anger, it would also help to conceptualize two separate spheres in our minds at the same time - the local and the global. By tackling the present problems of insufficient scale in time based services and flexible housing ownership options, there's a good chance we could move beyond the growing political divisions of the present.

Build New Realities That Reflect Where We Are

And by extension, what society already has, not to mention previous accomplishments on the part of individuals and groups alike. Continued economic prosperity need not be as difficult as some are inclined to make it out to be.

Ultimately, our economic settings are about much more than participation and contributions at the cutting edge of applied knowledge. For that matter, the biggest part of our working lives is composed of what we've already learned and done - albeit in new contexts. How might we ensure that the profits from the the cutting edge don't always have to be redirected for the ongoing maintenance of utilitarian knowledge and skill? If shared workplace activities are to be sustained wherever people choose to live, those activities need to contribute more directly to wealth creation. New organizational methods which combine workplaces in more accessible settings, could help ensure we remain able to pursue our life objectives and intellectual challenges well into the future.

Alongside the new knowledge of cutting edge endeavour, we also all have the good fortune to be "standing on the shoulders of giants". It's this wealth of preexisting knowledge and skill, which could revitalize so many communities that lack the ability to contribute at the level our most prosperous regions now experience. The earlier efforts of untold millions who came before us, hold plenty of relevance for what we continue to pursue in the here and now.

What's more, much of what we've already accomplished as individuals, could often be useful to others as they pursue their own paths in life. How might we make our own self improvement efforts more relevant to others on economic terms? Economic inclusion is not about forcing everyone to certain forms of skill and ability which present institutions may not even need, it's about exploring the possibilities of what we already have. Further investments in human capital for what we assume workplaces might need, aren't necessarily the human capital others would seek from us in a better aligned economic framework.

Formal aspects of human capital investment in particular are being questioned, as the bar for social and economic inclusion continues to be pushed ever upward. Today's definitions of quality product tend to come with assumptions that our already existing attributes are somehow "never enough" to take part in society as we are now. Still, when our time value is only allowed as exclusive quality product, even the most routine of services based activities are expected to transpire on these terms. In the process, societies end up budgeting for these forms of quality product in ways that further exclude those who don't meet the qualifications as they presently exist.

For these reasons and more, I sometimes find myself overwhelmed by posts and articles which call for higher wages as supposedly the most important guarantor of continued prosperity. Granted, substantial wage increases have been with us for a long time. But how much of these wage increases were actually derived from the output gains which resulted from centuries of tradable sector dominance? Is it not time to design environments which more accurately reflect the forms of resource capacity we presently hold? Because much of that capacity is now more closely aligned with the experiential nature of scarce time based product, instead of the output gains associated with tradable sector activity.

What prompted this post was an article from Daron Acemoglu for Project Syndicate, which left me somewhat deflated. In "Where Do Good Jobs Come From?", he writes:

Historically, no known human society has created shared prosperity purely through redistribution. Prosperity comes from creating jobs that pay decent wages. And it is good jobs, not redistribution, that provide people with purpose and meaning. 

Articles such as this seem to come with underlying assumptions. One would expect that wages "must" go ever higher for all concerned, so that we as taxpayers might continue covering the ever increasing costs of our governments and maintenance of our environments. It won't be easy to dissuade these high cost expectations for the sum total of our living and working environments, even though ever higher wages are only feasible up to a point, especially now. Plus, these expectations stemmed from centuries of tradable sector dominance which made extensive and costly forms of building capacity/infrastructure possible in the first place.

How can we build more flexible environments which are more responsive and better suited to changes in output scale, during times of non tradable sector dominance? Today, continued progress depends on a better alignment of overhead costs and gains from scale in applied time, alongside what money can contribute in terms of ongoing output. Much of this process means creating physical infrastructure and building components on more lightweight and flexible terms. By way of example, walkable communities will definitely need to include building elements for living and working needs which are transportable by means other than automobiles and trucks.

Fortunately, it is also within our ability to create good work with meaning, even when such work does not come with well compensated salaries. Importantly, however, meaning is subjective. What is fulfilling to one person might just be an aggravation to the next, and selection processes need to be more closely aligned with individual preferences. Time arbitrage in particular, should always be a voluntary process for flexible forms of work association.

In his article, Daron Acemoglu noted that "no known human society has created shared prosperity purely through redistribution". I would add that redistribution isn't just about money, because we can't redistribute applied knowledge from those whose time based product is among our most scarce resources. The only way that knowledge can be increased in society is through active dispersal via time increments - not just via education but in terms of actual use and economic validity. As to the latter, increased participation is necessary, if it is to happen.

Economic inclusion means less judgement as to what is "supposed" to take place in time based experiential product. Indeed, if we can come to terms with this possibility, there could consequently be less emphasis on lifetime education as means to survive a demanding society, and more emphasis on lifetime learning as one of many ways to meaningfully live in a society. With a little luck, this approach could lead to communities which accept widely diverse levels of knowledge and skill as valid paths to economic participation. Let's build stronger economic realities based on what we have already become.

Everyone Needs Economic Continuity

Social media networks can't provide this, neither can one's friends or neighbors. And despite their vital roles in society; families, religious organizations, governments, voluntary groups, schools and other institutions, are simply not positioned to function as direct economic relationships. Firms and corporations are possibilities, but only up to a point and increasingly, only in certain places. Indeed, the desire of firms and/or employees for "permanence" as highly specific forms of economic engagement, can undermine the potential of sustainability. Paradoxically, society's need for economic continuity, may also undermine other business objectives.

Yet economic continuity is necessary in a modern world, for individuals and communities alike to "stay the course". Continuity is especially important for the long term contractual obligations so often associated with ownership of traditional assets. Businesses may come and go, but financial obligations are here to stay, for practically everyone in advanced economies. And whenever economic dynamism begins to falter at local levels, many who get caught in the crosshairs have few ways to effectively respond.

When local economic conditions go south; both the individuals and communities involved, may have to abandon their hoped for long term commitments - both economic and personal. Some individuals lose the ability to start over yet again, especially if they've already done so half a dozen times. Sadly: If societal expectations weren't so rigid re the "necessary" environments for living and working, the inevitable falls from economic grace might not be so closely associated with loss of pride and self respect. Why make it inevitable that more fail, by setting every conceivable living standard beyond the reach of actual incomes? Why force millions to become dependent on others, when so many would gladly hold tight to personal identity and integrity, if every bar weren't set so damn high? In all of this, advanced nations have struggled to come to grips with the reality of lost dynamism, all too often uncomfortably close to the places where success still beckons.

One reason it is difficult to face the problems of areas becoming left behind, is that some sort of social planning, even if distasteful, almost seems necessary. What is public policy, if not the latest round of social planning? Even organizations which are skeptical of government "solutions", advocate their own solution sets for public policy just the same. Yet who is really positioned or motivated for finding relevant solutions, if not the ones who - due to an actual need to start anew - are extremely motivated to do so? Clearly, private enterprise has also stood in the way of production reform, and its structural contributions to the city country divide, still stand in the way of effective decentralization as well. Perhaps the best that can be said of all this is, at least no one is so blindly foolish as to attempt the horrendous social policy mistakes of the twentieth century.

Even though most individuals know the dangers of excessive central controls, it has been difficult to impart decentralized patterns which could effectively create more economic freedom for lower income levels. It's the lack of recognizable economic options for these groups which is creating new sets of problems. Hopefully, a new institution might be created which holds economic continuity as integral to its primary mission, especially for lower income levels. What might the framework of such an institution, actually consist of?

For one, ownership would be structured so that everything need not fall apart every time circumstance change. Flexible ownership options are all the more important, during times such as now when change appears as though the only reliable constant. Even though simple relationships between revenue flows need to be highlighted for non tradable sector activity, still, the fact remains no one will be able to predict when resource use patterns change. Hence the challenge is to respond via local production shifts, infrastructure and time commitment realignments on the part of relevant groups, instead of additional debts and bankruptcies.

Also: Simplify basic income relationships via defined non tradable sector requirements, wherever possible. Granted, in general equilibrium conditions, it's not feasible to directly observe the intricate and interdependent patterns of tradable sector and non tradable sector activity. New start up communities which begin with a knowledge base prior, would isolate basic non tradable sector requirements so that each start up community can create its own unique income consumption ratio. Importantly, this ratio would serve as a starting point from which more complex relationships of tradable sector activity, could gradually follow.

Normally, a decentralized approach has required tradable sector activity as a starting point or economic base, which makes sense since this created discretionary revenue flows. The resulting income gains have also provided a tax base for communities to work with. Since many aspects of non tradable sector activity are time and placed based, non tradable sector start ups would need to approach discretionary activities more specifically, so that economic time value can substitute for taxation, and citizens won't be burdened with hidden tax burdens that are impossible to decipher. At a later point, once non tradable start ups become better established, communities might reconsider traditional taxation sources, once tradable sector activity contributes to local income and revenue.

It will take time to build new forms of non tradable sector activity with sufficient connections to other economic activities which go beyond non discretionary needs. For this reason, non tradable sector start ups will need extensive innovation in infrastructure, so that those with limited incomes are able to contribute to community ownership. For economic continuity to be truly feasible, society needs more ways to reduce risk for lower income levels, which allow their "failures" to transition into successes wherever possible. Fortunately, 3D manufacture will eventually bring building component manufacture to local communities. Likewise, AI could make it feasible for many with mid range levels of skill to function in high skill capacities - only without the now necessary extensive human capital costs.

Where would AI be most useful? There's a simple way to answer the question. When human capital contributes to product, and that product scales in ways which augment output, high human capital costs are generally reasonable, because increased output can cover those costs without budgetary burdens being passed to future generations. Conversely, when output scales via participation instead of product output, high human capital costs eventually become extensive social costs. Hence AI could become part of the division of labour where specialization doesn't actually pay in terms of increased output. These are just a few considerations, how economic continuity might eventually, hopefully, transpire, on more certain terms.

The Untapped Potential of Plastics

Ever since plastics came into widespread use, people have harbored mixed feelings about them. And there's also a paradox: Even though they degrade quite slowly (what should be a beneficial characteristic), their potential for durability and flexibility in our physical environments, has long been overlooked. Meanwhile, the proliferation of disposable product has certainly not helped their reputation. Indeed: Given how long plastics have already been with us, I'm surprised that the term "single use" has only now become a "word of the year". Alas, plastics play an outsized role in products which are only intended for a brief use. Where, exactly, do we still have ample space to throw things away?

Nevertheless, despite the recent rush to create biodegradable products, it helps to remember the kinds of products we don't necessarily want to dispose of - at least in the short or medium term. Even though biodegradable material makes sense for disposable plates and the like, it's not necessarily a good idea for products that need to last for a longer duration such as housing and automobiles. Anyone who lives in areas prone to flooding or insect infestations, knows the drawbacks of wood and wood based products as "permanent" parts of a home's structure, for example. Equally problematic are the biodegradable products being utilized for automotive parts, since rodents find these products suitable for consumption! And granted, even though squirrels have already been known to destroy (expensive) parts under the hood, some are convinced that biodegradable materials for this purpose, simply makes things worse.

More companies than ever are responding to the fact that plastic has been ending up in too many of the wrong places, such as our oceans. Is it possible, given this scenario, to reclaim the value of plastics which could be put to more durable and long lasting use? Plastic building components could especially help those who lack the ability to rebuild on traditional terms after natural disasters. Components which are both strong and lightweight, would also be a tremendous plus for those who need to renovate deteriorating structures but presently lack the physical capacity (or other resources) to undertake extensive renovation.

Plastics still have considerably more potential for widespread use than is recognized, especially for anyone seeking viable alternatives to the high costs of traditional building methods. Chances are, durable forms of plastic could play a role in more flexible forms of infrastructure. One apt example is the need to create environmental options for what are now growing shortages of sand that binds well for concrete. Might it be possible to combine methods of 3D manufacture and landfill alternatives to create building components and flexible forms of infrastructure? Perhaps the plastics which can't readily be used for recycle could be compressed inside of 3D print frames which in turn could serve either as walls for housing, or even walking paths. For that matter, there may be entrepreneurs and STEM graduates working on such challenges, even as this post was being written. I certainly hope so. After all, living in uncertain times makes some of us wish we were decades younger, so that we too could also be actively pursuing such possibilities.

A Meditation on Physical Infrastructure

Among the reasons I've promoted flexible forms of physical infrastructure, is that ownership patterns for more permanent and capital intensive infrastructure, are in a state of flux which may take decades before the dust begins to settle - alas, literally and figuratively. Clearly, the process could profoundly affect societal expectations for overall economic conditions, as well. While some may scoff at the idea of physical infrastructure which local groups could simply pick up and take with them at will to get things done, the adaptability of these movable parts could prove priceless in the short run, for institutions that are able to embrace life on such terms.

Indeed, it can be overwhelming to contemplate, just how many aspects of basic physical infrastructure, now lack fiscal revenue reliability from either governments (or other institutions) which once seemed prepared to "guarantee" long term maintenance and sustainability. The nature of highway networks here in the U.S. is just one example, how our economic expectations became augmented and to some extent taken for granted, since the latter half of the twentieth century.

Let's step back in time for a moment, to consider how the dynamism of tradable sector activity, made so much of these earlier infrastructure upgrades possible. During periods when the general equilibrium circumstance (of today's developed economies) began to take recognizable form, it was difficult to ascertain how capital intensive long term maintenance obligations would eventually prove difficult to uphold - in part due to rising labour costs. Nevertheless: Paradoxically, the rising wages of long term tradable sector dominance, made it feasible for majorities of citizens to take part in the taxpayer obligations which funded so much national infrastructure in the first place.

It's when nations experience periods of rapidly rising wages (especially as tradable sector activity remains dominant), that their ability to define and create capital intensive infrastructure is at its greatest potential. Plus, capital intensive decisions during periods of tradable sector dominance, give additional impetus to general equilibrium possibilities at a national level. On the other hand; for developed nations which have become obliged to subsidize non tradable sectors as dependent organizational capacity, there may be little left over, to offer continued support of permanent physical infrastructure which is already in place.

Once non tradable sector activity (inevitably) begins to dominate any long term economic cycle, it becomes more important for societies to designate ownership patterns for physical infrastructure, which directly include the individuals who are close to the spaces and time frames such patterns represent. Otherwise, too many individuals would lose the forms of economic access which make for a normal life. In the meantime, many citizens in developed nations have become less supportive of infrastructure which they aren't likely to personally utilize, and this societal reluctance could make quite a difference, for the ways our physical and economic landscapes take shape in the foreseeable future.

Now is the time to begin building more flexible forms of physical infrastructure, which are geared towards solution sets and ownership patterns that reflect the resource capacity of local groups who rely on them. Adaptability also means the ability for everyone to experiment, so as to discover how the use of knowledge can reconfigure more effective means of services generation. And just as strong and lightweight building components might physically define such living/working spaces, these components could also transform what are excessive burdens for electrical and plumbing requirements. In particular, future transportation needs to involve a lot less cement, and a lot more alternative means for moving people and things from place to place.

Early stages of defined equilibrium settings would first need to stabilize the steady state nature of knowledge building through time arbitrage, with its somewhat limited wage structure, before branching out into broader ownership patterns which could (once again) provide more diversified infrastructure options. At the very least, in the here and now, the more that nations are willing to give their citizens a chance to create knowledge centered wealth at local levels, the more fiscal revenue may remain available to maintain the transportation networks of the 20th century. It means a lot presently, to be able to keep moving ahead one step at a time.

Economic Inclusion is a Decentralized Option

Florian Ranft in "How can we spread the benefits of the digital economy?", expresses concern about an emerging economic model "where value creation is driven by intangible assets and investments", and notes:

Given these dramatic changes, policy makers need to update their economic thinking of work in society and find policy solutions that better reflect the unfolding changes of big tech and innovation that includes shifting the debate on digital from micro to macro and rethinking how the distribution of the economic benefits of digitalisation can be translated into an inclusive growth model.

However, addressing the economic uncertainties of a digital era is becoming more difficult, for centralized economies in which both time based service product and housing costs representative of time and place, have gained a dominant structural position. These forms of product often don't benefit from additional output in ways that naturally stimulate additional revenue for wages, taxation, or other societal needs. In other words, the response to "Where is the path?" (for greater inclusion) in these circumstance, might be "you can't get there from here"!

Alas, it could occasionally become necessary to "start the trip" from somewhere else. At the very least, decentralized options for new employment and infrastructure potential, could make it possible to create stronger marketplace integration and vitality. Sometimes - just as Diane Coyle seemed to suggest in a recent post re work in digital times - it's not enough to simply hope for more inclusive economic conditions and expect a meaningful response. Just the same, this changed structural circumstance has few obvious fixes that readily translate into policy objectives. Hence policy makers may instead opt to give a green light to a new institutional context, in which decentralized possibilities for economic engagement could be explored.

Only consider how intangible forms of production have created a backlash of relatively tight monetary policy, partly due to the increased difficulty of redistributing either wages or providing support for existing infrastructure via centralized means. By way of example, how to think about this argument from Florian Ranft?

A straightforward solution would be to simply readjust the tax burden between capital and wage income. As machines become better at substituting human labour, sustaining a high level of taxes on worker's income may not be a good idea, potentially driving unemployment and inequality. 

Unfortunately, "one size fits all" taxation models worked better when when more tangible forms of tradable sector production - for instance - could be further sourced for revenue and redistribution. Whereas today's machines and automation frameworks may instead augment professional income hours which bear little connection to output gains. Capital enhancing machinery was certainly easier to tax, when it held direct responsibility for aggregate output gains. And 21st century human capital - in relation to earlier capital frameworks - has essentially become a taxation boondoggle.

Meanwhile, lower income level taxation is also where citizens have few means of access to the legal workarounds that are enjoyed by professionals and corporations alike. What much of this boils down to, is the fact less tax revenue will be available than governments now expect to access in the near future. As more residents become responsible for the infrastructure of their own environments, they will need to be able to assume greater roles in the simplification and design of local infrastructure. It's past time, to explore new avenues for building components and infrastructure which allow communities to better represent a full range of income levels.

In all likelihood, the most effective decentralization models of the near future, will be those which - instead of relying on random taxation measures to tend to ongoing needs - instead find ways to generate more marketplace diversity for local infrastructure, building components and time centered services, on direct terms. This would include integrating available revenue for community obligations into local ownership patterns. By making all local participants owners and co-creators, economic inclusion would indeed become a viable option. Nevertheless, the process will likely become somewhat different from the taxation and redistribution expectations of the present.

Granted, it's easy to think of approaches such as tax simplification as ways for individuals with high income levels to escape "undue" governmental burdens. But the reality is that a more carefully thought through approach, would bring a full range of economic activity within reach of all income levels, many of which experience little gain from the governmental taxation they're presently expected to bear. Done right, the tradable sector activity which scales in tangible ways could serve well into the future as supportive of centralized power. Still: It's the intangibles which can be the undoing of advanced economies over time, if and when citizens lack means to more carefully manage the resources they actually have at their disposal.

Ranft, in the above linked CapX article, also mentioned the possibility of "plural ownership models".  Here, the most important question for such endeavour might be "Does the product in question already have the capacity to scale up?"

If it does, there may be little need for communities to organize cooperative settings around these products and goods. Future governments should maintain some leeway in the redistribution of revenue derived from tradable sector output gains, so long as open global trade remains actively encouraged. It's product which isn't readily amenable to scale, that occasionally benefits from the assistance of local cooperative effort. Ultimately, we would all benefit from a better understanding when local economic coordination can assist both citizens and aggregate output, versus the traditional economic framing in which spontaneous coordination for production, will fortunately suffice.

Resource Flexibility Requires Investment Flexibility

When does private ownership actually hinder allocative efficiency? Generally, ownership makes it possible for individuals to put resources to good use. Even so, ownership of property in particular, remains legally designated in ways that sometime make it a blunt instrument for personal intentions versus actual outcomes. In other words, present day legal property constructs aren't quite as optimal as one might expect.

For instance: Over the years I've observed too many properties sitting in limbo indefinitely, once ownership is cut short through death or other forms of separation. Even though surviving heirs can sometimes reach agreement re property settlement without discord and hard feelings, often the process is difficult for all concerned - including the communities which contain these properties within their boundaries.

Among the reasons I've sought flexible and incremental ownership means, is the fact legal property disputes can sometimes make the difference between personal success and failure, in the course of one's lifetime. Today's inflexible ownership patterns also encourage people to assume others aren't capable of committing to ownership and responsibility. But often, many individuals could live more meaningful lives, if ownership options were constructed so as to allow people to build wealth gradually - thereby creating stamina for potentially broader personal commitments at the same time.

These market design priors on my part, encouraged me to take note of property arguments in a recent publication, "Radical Markets: Uprooting Capitalism and Democracy for a Just Society" by Eric Posner and Glen Weyl. Since I've not yet had the chance to read the first chapter (which is included with the above link), I plan to read some of the book reviews whenever possible. For instance, Diane Coyle wrote:

It's extremely thought provoking and clearly brilliant - yet also barking mad. This is the territory of thought experiment rather than policy proposal.

At the very least, some thought experiments could be tried in local decentralized market settings - they just don't need to overturn general equilibrium scenarios and fully functioning municipal frameworks. Vitalik Buterin's review of the book has some particularly useful perspective about the investment problem of market efficiency and allocation:

As it turns out, it is absolutely possible to have a system that contains markets but not property rights; at the end of the year, collect every piece of property, and at the start of the next year have the government auction every piece out to the highest bidder. This kind of system is intuitively quite unrealistic and impractical, but it has the benefit that it achieves perfect allocative efficiency: every year, every object goes to the person who can derive the most value from it (i.e. the highest bidder). It also gives the government a large amount of revenue that could be used to completely substitute income and sales tax or fund a basic income.

However:

Re-auctioning everything once a year completely solves this problem of allocative efficiency, but at a very high cost to investment efficiency: there's no point in building a house in the first place if six months later it will get taken away from you and re-sold in an auction.

Even though it's not reasonable to subject traditional private property to yearly auctions, some aspects of yearly auctioning could apply, should people use building components to spatially organize for mutual workplace patterns. While spatial organizational patterns for resource flexibility have long been part of business organization, we've yet to apply these organizational options to the broader coordination of time based service activities.

How to envision a starting point? Any planning for walkable densities needs careful consideration for those whose could especially benefit by closer proximity to core economic activity. New communities might structure around a double core - one with more traditional forms of zoning options, alongside a service based core where young and old alike would be able to purchase and manage their own areas for daily interaction with others. Instead of being institutionally segmented off elsewhere, away from the general public, many who are now arbitrarily marginalized, could finally take part in life on more spontaneous terms. In core settings for services generation, perhaps a yearly auction for property arrangements would come in handy, so that participants could use the process to pay for the yearly operational costs for the relevant properties.

Again, what would make the auctioning process possible for yearly operational costs, would be the ownership of flexible building components which could be moved about across the utility grids which these communities already have in place. While the latter would also be a form of incremental shared ownership, as far as I can presently discern, this form of ownership has a continual aspect which would need to be constructed quite differently.

Granted, the forms of investment suggested in this post, may not have the path breaking quality associated with "cutting edge" investment opportunities since they're intended for individuals who are less concerned with monetary reward than gains in lifestyle options. These groups wouldn't be investing for "more of everything", but using resources already at their disposal to create something which might otherwise not have been possible. While it's not feasible to preserve investment flexibility for some resource capacity, fortunately, alternatives are possible. As Ian Hathaway wrote:

So before continuing down The More of Everything path, consider an alternative. Sometimes the answer is more of something. But often, a more relevant question is how well something is being done. Are you getting the most out of what you already have? What can be done to improve community cohesion today? To what extent are the existing pieces integrating in a productive way?

In my experience the answer to these questions comes not from adding, but from activating and transforming...It's not always the big moves that get you where you need to go.

Gentrification is a General Equilibrium Constraint

In a Brookings article, "Will Opportunity Zones help distressed residents or be a tax cut for gentrification?" Adam Looney notes:

States are fast approaching a deadline set by the new tax law to designate low-income neighborhoods as "Opportunity Zones" - a designation that will unlock favorable capital gains treatment for investments in those areas.

And he continues:

In contrast to the new Opportunity Zones, the policy with the best proven record - Empowerment Zones - focused on people and local services not just capital investments. They encouraged hiring, subsidized up front investment in capital and equipment, offered loan guarantees, regulatory waivers, a partial exclusion of capital gains, and large grants to local government authorities for local services and infrastructure...But the program was expensive and intensive, costing approximately $850 per resident. As a result, only 11 neighborhood zones were ever designated under the original design.

Is there a better approach? Much was written about the potential of Empowerment Zones, so I was startled to discover only eleven were established. Nevertheless, regular readers won't be surprised that I consider gentrification to be a general equilibrium constraint, due to societal expectations re housing and infrastructure which don't necessarily align align well with life's realities. Once traditional housing and physical infrastructure age, their costs and maintenance requirements can become a burden on anyone with limited resources, especially the oft fixed incomes of retirement. What if gentrification also translates into too few places for older individuals with limited incomes to go? As Alana Semuels recently wrote for The Atlantic:

In America in 2016, nearly half of all single homeless adults were aged 50 and older, compared to 11 percent in 1990.

Fortunately, it's possible to overcome the societal expectations that are closely tied with general equilibrium constraints. We could create defined equilibrium (non tradable sector) settings, which more closely match the personal aspirations and resource capacity of groups who find common ground for living and working together. Presently, when many individuals with limited means exit gentrified locales, they often end up in other declining areas which pose greater risks than the places they left behind. If people had options for carefully considering how to start over with other individuals in similar circumstance, the pressures of relocation might not be so unsettling.

Instead of worrying about the places people sometimes need to leave behind due to gentrification, let's pay more attention to how the marginalized can build anew in environments which more closely match their potential. One reason so few solutions have been actively sought for lower income levels, is the fact we don't yet have zones which can experiment with less costly innovative building components and physical infrastructure.

Likewise, in the originally conceived Empowerment Zones, local services were probably framed as an ongoing external societal cost. In order to create long term solutions for limited wage capacity, local services need internal generation which allows them to become wealth creation instead of external costs. Such a strategy would greatly add to what participants could bring to the table, in terms of mutually shared responsibility. By allowing innovation to contribute to physical and social infrastructure, many who are now considered marginalized in some capacity, would finally get an honest chance to become more personally accountable - both for themselves, and for others.

Some Thoughts on Dynamic Property Ownership

Part of the decline in economic velocity over time, can be attributed to difficulties in making the most of property ownership, especially for properties which are mutually owned by family members. Even though housing has mostly become associated with consumption in the present, some still rely on mutually owned personal (family) property as primary production means for goods or services.

However, it can be especially difficult for lower income levels, to successfully work out disputes regarding the use and/or control of mutually owned personal property. Due to the inflexibility of legal ownership guidelines, family owned resource capacity can end up utilized at a fraction of its true potential. Too many people have lost everything - time and again - for no better reason than family members could not, or would not, agree among themselves regarding common usage for mutually owned property.

In recent years I've suggested a flexible institutional structure for property use, which could make more dynamic forms of property ownership possible - especially for physical assets as utilized by individuals. Property ownership of participants within an equilibrium corporate structure, would function like the pieces of a dynamic jigsaw puzzle, which allows property holdings to adjust for group and individual work/life patterns, as they change and evolve. The ownership process begins with each participant's basic level of property acquisition, which corresponds with entry into time arbitrage via peer to peer educational assistance.

These base property holdings would function as a form of group insurance, via replacement base building components in the event of natural disasters and the like. Basic levels of services access in the course of one's lifetime, would coexist alongside this (time value backed) property insurance pool.* While specific locations are sometimes important in their own right, often the specific geographic location is a second consideration. This way, each group is able to retain its ability to shift holdings for life and work patterns so that families and individuals who have shared time based obligations, can remain in reasonable walking and/or commuting distance from one another.

Often, ownership is not so much about a specific building component or property, but one's ability to utilize buildings and property so that their personal efforts and risks in relation to others, aren't unduly compromised. If specific properties in this setting function as dynamic jigsaw puzzle pieces, one might imagine building components in this context, as similar to Lego pieces. While many properties would closely correspond to changing life/work settings, other more permanent property designations would provide ample room as well, for the personal expressions which personal ownership can beautifully impart to the landscape.

Dynamic property ownership would reduce the legal problems which arise when physical property ownership is subject to the inevitable risks of life. While divorce is among the greatest risk for lower income levels, these groups are at greater risk from the vicissitudes of nature as well - particularly floods. With more viable options for individual ownership, it would become a simpler matter for many individuals with small incomes, to remain economically engaged for the full duration of a lifetime.


*Additional ownership beyond the base insurance levels agreed upon by individual communities, would function as more normal aspects of property ownership.

An Epic Storm of Inane Hurricane Articles

Numerous articles have been written about Hurricane Harvey, in what continues to be a destructive hurricane season. Unfortunately, with some notable exceptions, too many articles took advantage of the already trying circumstance of Hurricane Harvey, to bash Houston in particular, and politics in general. It helps no one, for the media to use major storms as yet another tool to divide public opinion.

In times of devastation and tragedy, which are already difficult enough, why not write instead about the positive efforts of countless heroes and volunteers, as they come together to help one another? Or at the very least, provide useful discussions regarding infrastructure design options which are short on inappropriate blame, and long on potential solutions.

Hurricane Harvey was a most unusual storm, which remained in our coastal regions far too long. Consequently, local municipal systems were strained to the limit, and we are fortunate these systems held up as well as they did. Harvey, with its record setting levels of rain across Texas coastal regions, was a storm in which the least bad option for many of us was to shelter in place. Just as one emergency management director said, re ongoing evacuations for Hurricane Irma, "Honestly, I can't tell you where safe is." And many emergency coordinators remember all too well what took place when millions tried to leave Houston in advance of Hurricane Rita. As Wikipedia noted, regarding that ill fated evacuation:

The combination of severe gridlock and excessive heat led to between 90 and 118 deaths even before the storm arrived.

Dietrich Vollrath, an economist at the University of Houston, expressed his frustration with a onslaught of "Hurricane Harvey as X" articles which were written even before floodwaters worked their way downstream. This hurricane was a catastrophe, not some ill begotten metaphor, and Vollrath's rant is worth reading in full. From his "Harvey" post:

For those of you wondering why the whole city didn't evacuate, do you really think that the city was shocked to discover it could be hit by a massive hurricane? Sheltering in place was not some shoot-from-the-hip wild guess of a strategy. It's the best of a bunch of crappy options. If you want to have a discussion, say a month from now after the worst of this is all over, about whether there are ways to effect an evacuation, during the next Harvey-like event, great. Let's do it. In the meantime, your homework is to devise a plan to evacuate the entire state of Massachusetts subject to the following constraints. (A) you have 48 hours. (B) You can't use Rhode Island, Connecticut, or New York, and (C) everyone needs shelter for up to 10 days. Go.

Unfortunately, even some economists didn't get Vollrath's "Harvey as metaphor" memo. The most recent example I came across was Joseph Stiglitz, who used this major storm as yet another excuse to assign further blame with the Trump administration. One doesn't have to be particularly fond of the inanities of Washington, to find Hurricane Harvey an odd connection to such goings on. For those who would enjoy a good rebuttal to similar narratives, Leo Linbeck at the New Geography blog, provides an apt synthesis of various major media complaints, and addresses them one by one.

At the very least, the informal use of social media platforms has been more positive. These platforms made possible a level of decentralized rescue and relief efforts which was not feasible during Hurricane Katrina. And despite what anyone thinks about the "appropriate" nature of centralized efforts, neighbors helping neighbors becomes all the more important, when people need to shelter in place and then respond to local events as the situation changes.

Two articles in particular had the right idea, hence deserve to be highlighted. Ian Bogost, in an article for the Atlantic ("Houston's Flood is a Design Problem"), wrote:

It's not because the water comes in. It's because it is forced to leave again.

Indeed, the same system decentralization which could assist and augment knowledge use, could pair people who opt to shelter in place, with water systems which capture water in place. In "How Long Will it Take Houston's Floodwaters to Drain?", Laura Geggel offers suggestions for site specific solutions to water management. She explains how Houston is slow to drain, which in turn puts additional pressure on its systems. Again, infrastructure design is important.

If there's any takeaway from the deluge of unhelpful hurricane articles, one question in particular comes to mind: Why can't formal media outlets be more helpful and positive in outlook? A more positive approach could make everyone feel better, in the uncertain times of the present.

Maintaining Strong Tradable Sector Connections

By tradable sector connections, I'm referring to the need for individuals and groups which take part in knowledge use systems, to support as many tradable sector activities as possible.

Plus: An important aspect of discretionary income for these participants, is ownership in the building and infrastructure components which are integral to equilibrium corporate structure. Not only does this ownership supplement the base commodity (time arbitrage) wage, it is flexible and need not be specific to a single (tradable or non tradable) sector application. Options include shares in company manufacture (also for markets beyond knowledge use communities), and the ways in which components and infrastructure are locally applied.

While time arbitrage does not compete on the open market in general equilibrium settings, the building components of equilibrium corporate activity, would function as a part of any markets which permit the necessary regulatory adjustments for their use. These products don't pose a direct threat to other markets, because their function and purpose is quite different from dense and heavy building materials which are designed solely for specific settings. Knowledge use systems would also align with traditional forms of tradable sector activity, to provide as many lifestyle and traditional employment options for its residents as possible.

Why are tradable sector links so important? Even though time arbitrage creates a platform for mutually sought skills and challenges, this form of wealth generation is nonetheless limited by the finite nature of the time at our disposal. There are good reasons, why economic thought has emphasized tradable sector activity over services. Even though personal services have always been important, were it not for the spread of tradable sector activity, the path to opportunity for so many, would have been exceedingly difficult. Tradable sector wealth led to centuries of gains in living standards, and generated positive global connections. When local communities did not have sufficient room even for the inclusion of their own, the spreading wealth of tradable sector activity, often meant the possibilities of new horizons for these individuals.

Tradable sectors would benefit, from the use of knowledge as an interdependent role. Time value as new wealth, allows for the dispersal of knowledge in ways which are no longer dependent on availability of tradable sector revenue, in order to take place. Importantly, this would allow both employment and output to develop via more natural means, without the crowding out effects that often occur between tradable and non tradable sector activity. Presently, no one really knows the level of output that is possible, because of the ways these dynamics play out in general equilibrium conditions.

To sum up: while our time links to other individuals provide discretionary choice for services generation, our tradable sector links provide discretionary choice for the resource capacity which has so contributed to the progress of recent centuries. No one can afford to confuse goods coordination, with the coordination of time based services. These forms of resource capacity, are different in every way imaginable.

Governments in particular have stumbled, by trying to mix the dynamics of non random time with random resource capacity, in centralized settings. Governments lose entirely too much fiscal policy potential from tradable sector revenue, given their extensive requirements for non tradable sector participation. It is vital to understand how the output of time and place might be encouraged locally, so as to prevent unnecessary output losses in tradable sector activity at global levels.