Are Charter Cities a Possibility for Migrants?

What if nations sought to create new cities instead of camps for the ever growing numbers of migrant refugees? A recent article for Brookings suggests this policy option, and the authors explain:

Charter cities are new urban developments that have been granted special jurisdiction to create their own governance systems. Clearly defined legal frameworks, good governance, efficient distribution of public goods, and modern infrastructure could support well-functioning markets and attract investments to generate higher rates of economic growth in charter cities. Based on these principles, we propose to establish sustainable charter cities-in-exile (SCCEs) as a policy framework for host countries and international development organizations to promote refugees' self-reliance and facilitate their integration. The proposal supplements existing migration policies, especially in areas of identified procedural and logistical bottlenecks, and supports refugees in their freedom of choice of migration destinations.

In some ways I find this proposal impractical, given the difficulties involved. One can only imagine the political battles that would ensue in the U.S. were policy makers to suggest something similar. Yet some nations may prove more willing to address these issues, which accounts for a response from The Global Eye.

It is clear that we all want legal and regulated immigration but the issue is highly complex and is characterized by growing complexity.

Still, their response to the Brookings article considers the possibilities:

It seems to us a viable prospect for a phenomenon that, politically, has been reduced to an invasion and a threat. Without changing perspective, politics will continue to deny the structural nature of the phenomenon and only aggravates its consequences.

My biggest concern in all this, is the extent to which economic complexity is starting to limit what traditional institutions can successfully coordinate for services and infrastructure, especially in areas which lack wealth sources. Granted, a century earlier, even individual private companies (as one example) could still manage the services and infrastructure involved for company towns, but larger versions today would be no easy feat. Alas, only consider the difficulties private companies in the U.S. encounter today, if they attempt to provide affordable healthcare for their employees.

Indeed, the serendipitous interaction between primary and secondary markets in the most prosperous regions, largely accounts for the economic dynamism of our present. However many knowledge providers are reluctant to settle in regions which come up short in this regard. Considered in this light, what these charter cities need to generate could be difficult. More specifically, "sustainable cities-in-exile" (SCCE's) would 

seek to provide refugees with a place of safety, an immediately available assistance network, and an accelerated path towards professional and income opportunities. A guarantor country or group of countries would enforce the SCCE's charter while guaranteeing the safety of private sector investments and firms, including those from the country of origin with temporary headquarters-in-exile. A proper institutional architecture guaranteed and monitored by national governments and international guarantors, with direct involvement of the refugees and local communities, would help to reduce the risks of crime, human rights abuses, and sexual exploitation.

While these are worthy goals, who would fund the traditional institutions required to make it all happen? It's this same lack of funding for vital traditional institutions here, which leaves many citizens without basic amenities in rural and underdeveloped areas. For that matter, a recent Washington Post article highlights how American territories are losing population in similar ways. 

At stake in all this, are distributional scarcities and limitations in some of our most important institutions, particularly those representative of secondary markets for applied knowledge. I believe that in order for new cities to happen, people will need stronger connections with direct forms of wealth creation and applied knowledge systems. Otherwise, many newcomers would remain dependent on the assistance of institutions already unable to meet the needs of local citizens. Chances are, the problems of immigration won't be so severe, once applied knowledge institutions evolve to allow skills participation for all individuals. After all, many nations would be more open to immigration, if their own citizens could participate in applied knowledge networks as well. 

The Importance of Economic Sustainability

April 22nd was the anniversary of Earth Day (beginning in 1970) which emphasizes environmental restoration and sustainability. However, this global acknowledgement reminds me that some aspects of sustainability get emphasized over others which are seldom noted. In particular - despite ongoing efforts to achieve financial and monetary stability as well - why has economic sustainability not received more attention?

After all, citizens need to be able to manage their own lives effectively, before they turn their attention to the physical care of their environments - at least insofar as sustainability is generally presented in the media. If sustainability dialogue focuses on anti growth or perhaps anti capitalism, then why do so many proposed environmental "solutions" end up costing more money than the poor can afford? Plus: paradoxically, the poor actually contribute to earth's resource preservation in many instances, since they have little choice but to limit their own consumption. 

Perhaps economic sustainability has not been considered, since instead of government dictates, it involves market centered options which lead to fewer financial burdens for low income levels. Unfortunately, when domestic providers prefer to keep consumption costs high, this results in an upward price spiral, as citizens respond by demanding ever rising wages to meet non discretionary costs. If this weren't enough, groups which lack the political power to demand "living" wages, also lack the ability to garner respect from society for the work they do. 

Let's reduce the spiral of ever rising wage demands, by bringing non tradable sector markets - especially time based services and basic housing components - within reach of all citizens. Once production reform becomes a reality, we will all benefit from the process. The road to greater stability in economic systems, is one which creates a more open version of market potential than is currently taking place.

Fortunately, there are many ways to make domestic innovation and production reform feasible. Should municipalities prove hesitant to make room for walkable options, why not create new communities which integrate walkable elements in the core of their design. When cities and towns won't address zoning and regulations which limit housing, create new communities that are willing to build flexible forms of housing and work spaces. And most of all, build new communities which actively engage in a full range of time based services generation. Make sure all residents are included in local calendars for work, play, and more, during the course of every year. 

All these elements might add up to a sustainable future, one where high income levels are no longer necessary to live a good and meaningful life. Once we create viable market options which don't require excess use of earth's resources in the first place, sustainability might finally be envisioned in broader terms.

The Decentralization Which Matters Most

How might decentralized options contribute to long term growth and economic sustainability? Granted, there are certain periods when centralized power structures hold certain advantages in this regard. But once governmental budgets start to extend well beyond revenue sources, centralized power gradually wanes in the long run. Indeed, we may have already entered a period when centralized power holdings actually detract from our economic potential. 

If so, what can be done? The structural framing of decentralization potential has yet to be fully explored. Meanwhile, current dialogue re decentralized options tends to be in reference to specific circumstance and factors, rather than multi system alignments. Yet the latter holds substantial possibilities for future dynamism, not to mention more sustainable economic outcomes. 

One way to think about such alignments, is how general or national equilibrium also translates into the resource potential of knowledge production. While the cumulative effects of this circulatory (primary to secondary market) environment are complex and vast, they still contain basic elements which could respond to systems design. Ultimately, local microcosms of defined equilibrium would feature complex services generation alongside local tradable sector activity. 

Presently, mature economies continue to benefit from highly complex financial systems for many important knowledge production activities. However, the extent to which these systems can further develop along similar lines, is increasingly in doubt. As it turns out, extensive price making in high skill time based product, limits entry into these vital markets not just in terms of production, but also consumption. While price making is certainly an understandable impulse, when most participants elect this route, others are left unable to coordinate more closely for the resource capacity which is actually at their disposal. And in this instance, the relevant resource is of course our aggregate time use potential.

Fortunately, defined local equilibrium could pick up where the possibilities of national general equilibrium for knowledge production, tend to leave off. Time as a valid economic unit, would lessen the need for full monetary reimbursement of a wide range of activities which people find particularly worthy of their own efforts. One reason it is so important to develop local environments which nurture knowledge production, is that extensive price making in high skill time value, has also led to political unrest and polarization. Not only would new institutions for knowledge production make it feasible for citizens of limited means to reengage with others, the rural urban divide could also be meaningfully addressed as well. 

When We Forget How to Live and Let Live

Some resources are truly scarce. Nevertheless, other forms of resource capacity have become artificially scarce. Indeed, one reason capitalism is occasionally called into question, is that special interests too often maintain artificial scarcities in what are basically non discretionary markets. Unfortunately, when societies limit their own economic potential by doing so, the political centers which lend both economic and social stability, gradually lose their hold. Even though various groups and individuals continue seeking solutions for pressing issues, political polarization tends to drown out their voices. In other words, economic conditions may lead to circumstance in which people gradually forget how to live and let live. 

What can be done? Might the underlying structural factors which now get in the way of mutual understanding and civility, still be addressed? How could we make amends for the artificial scarcities which undermine economic stability, long term growth, and even human empathy? Hopefully we have not waited too long, for our present cultural impasse also stands in the way of possibilities for innovation. In a discussion with James Pethokoukis, Caleb Watney describes innovation as an engine and further elaborates:

one of the main things I try to stress...is that the components of the engine have been under considerable stress for decades. We really have not been supporting them through policy at all. In fact, we've been very actively working against them in some ways. But COVID might represent a breaking point of sorts. Sometimes, you can have so much bad policy going on for so long, and then you just need the final straw or a big enough disruption that can really make things start spiraling.

Watney also notes how people no longer feel the world is a positive sum place.

How can we make sure that economic growth does feel positive sum, that everyone's benefiting, that it doesn't have to be one person benefiting at the expense of someone else.

Alas, economists, policy makers and even most citizens grew weary of discussions regarding structural issues, once the economy rebounded from the Great Recession. Hence there was no real response insofar as reforms or other adjustments in organizational capacity. What few predicted, however, was the extent to which neglected structural issues would cause additional problems in short order, with the onset of the pandemic. Had those discussions a decade earlier not been abandoned so quickly after the Great Recession, perhaps we would not have reached the extremes which have surfaced in today's identity politics. Now, it is no simple matter to back up and begin anew. 

In the future, whatever happens, let's hope that representative democracies become more cautious about resorting to cultural battles as a smokescreen for unaddressed issues of economic access and participation. Even though it can be tempting for policy makers to do so, citizens suffer once their governments play the blame game so extensively that little else gets done. Meanwhile, precious energy is being lost in fomented hatreds, even as citizens continue to lose economic access in basic areas of their lives. 

Just the same, if we can once again become willing to live and let live, we need economic context which does not force people to adhere to the same set of structural requirements. The income levels of today's societies are simply too diverse for such unreasonable expectations. Decentralized settings are only worthwhile when they are built so as to encourage a full range of human ability, aspiration, and personal motivation. Even though the gains of some groups would doubtless appear minuscule in relation to other groups, who cares and why should it matter! Just do it! These decentralized settings could still nurture human capital improvement and the preservation of applied knowledge, to the fullest extent possible for all concerned. 

Otherwise, the one size fits all requirements of today's general equilibrium settings, will continue discarding human capital seemingly "unfit" for purpose in relation to the best and the brightest. Fortunately, we have the ability to create a more positive approach to human capital potential. But the time to begin building more hopeful and sustainable settings, is now. We need to productively respond to extreme structural imbalance, before we completely forget how to live and let live.

Notes on Trade Offs in Systems Design

Even though governmental gridlock is often frustrating, in some respects it can be more practical than the alternative. Among other things, gridlock acknowledges extensive competing demands on government budgets. And due in part to changes in lifestyle and individual priorities, some budgetary commitments no longer contribute to economic dynamism as ably as before, such as traditional physical infrastructure. Unfortunately, an undue focus on traditional infrastructure tends to detract from systems design options which more accurately mirror a fundamentally changed economy.

Systems maintenance trade offs are important as well. When we can't decipher how our time commitments translate into societal obligations, it only gets more difficult from there, to apportion remaining time for our own needs. We've gradually tossed much of our redistribution potential, via taxation, into a vast chasm of societal responsibilities. Could some of these processes take place on more productive terms? Even highly skilled knowledge is in certain respects a mundane maintenance function, yet we have few settings where it can be readily applied as such. In the future, as budgets become more constrained, what monetary values might public goods and services continue to hold? We need to create new market options while we can still think clearly about what will be involved. In other words, well before budgetary shortfalls make it necessary to do so on more stringent terms.

Each of us has a limited amount of money, time and resource capacity, for what societies wish to implement and hopefully, maintain. Alas, it is becoming less practical over time, to further add to environment maintenance costs (whether local, state or national) without clear specification of the trade offs, not to mention which income groups are actually expected to be responsible for costs. Much of what currently transpires is no longer realistic for societal coordination, given the wide variance in today's income levels. All the more so, when money mostly serves as a stand in for personal time or resource commitments.

Despite the importance of systems design on multiple levels, the broader trade offs that impact societal well being are not being accurately debated. Future systems design will have a greater chance of success, if and when it takes our broad income diversity into full account. Whenever income levels prove insufficient for systems maintenance, we can build respectable and desirable alternatives in the form of new environments, for those who lack the full monetary rewards of meritocracy. I would be remiss if I didn't add: When it comes to trade offs in general, this part of the public discussion has scarcely begun. Plus, when trade offs are discussed from a public choice perspective, it's not helpful when they are framed as "we would be better off without", if no market alternatives are being actively prepared for implementation. The rise and fall of Obamacare is just one egregious example.

A lack of systems design which could take different lifestyles and income levels into account, has also led to struggles whereby various groups attempt to impose their lifestyle preferences on other groups. In many instances it would be simpler to start from scratch, especially for the creation of walkable communities. New beginnings in systems design could ultimately lead to less political polarization, and more hope for the future. Restored hope in decentralized prosperity, could likely mean less struggle over opposing visions of the "good life". No one has ever successfully imposed their version of "best life" on any one else. People are far too stubborn for that to happen. So why do centralized governments keep trying to impose either/or lifestyle scenarios, which they inexplicably expect all citizens to live by?

However, the cronyism of special interests, has inadvertently contributed to today's either/or scenarios as well. Now, consider the consequences: When governments give in to the protectionism impulses of private interests, where is the logic in belittling citizens for responding by demanding similar protections? Despite the fact that protectionism has come full circle, and of course the global implications, there may yet be time to back away from this precipice. Why not work to reduce centralized and protectionist impulses while we still can. Why not build upon systems design which makes room for everyone, not just whichever fortunate individuals happen to be in power at any given moment. Ultimately, the best way to achieve sustainable trade offs, is to create ample economic options - options which allow all income levels to contribute and participate in society.

For Progress, Basic Innovation Remains Necessary

When it comes to societal progress, inventions that improve basic aspects of living are as crucial as they ever were. In considering why this is so, one also hopes future progress studies will encourage participants to envision basic innovation as much more, than past historical records. Innovation is not solely about creating new economic options, to further tempt those who already have plenty to spare! Indeed, with concerted efforts to innovate local environments, productive transformation could come to non tradable sector activity where it is most needed: time based services, building components, and physical infrastructure.

Oftentimes, achieving more supply side output means getting more people involved in the entire process. Alas, societies tend to lose this perspective, and they end up traveling paths in which ever fewer citizens are able to go. And while a more inclusive economy is often discussed in terms of greater monetary redistribution, basic forms of real economy activity are actually more important, so that all citizens can remain fully engaged. Much about societal progress relies not only on our active participation, but our personal ability to contribute to system maintenance as well. However, without ongoing production reform which lowers basic systems costs, they eventually become unsustainable, as growing majorities of citizens find themselves unable to contribute to systems upkeep.

Another way to think about supply side possibilities: How can we create more good deflation in these basic areas of our lives? What the supply side makes possible in terms of production and consumption, often matters much more than our actual income differences. Only recall, how the benefits of good deflation in tradable sectors have led to greater economic access and centuries of progress. Production reform in non tradable sectors would ultimately translate into additional economic activity, allowing millions more to build meaningful lives.

In certain respects, good deflation functions as other forms of productivity gains, in that it achieves more output via the resource capacity already at our disposal. This is why we also tend to observe lower costs in areas where good deflation does occur. That said, quality product gains also affect this relationship. In particular, preserving good deflation potential in non tradable sectors, means being careful not to allow perceptions of quality product to determine the extent of our personal economic time commitments. Especially given required costs for personal environments which are already non negotiable! Many businesses already have ample incentive to increase productivity, so why hasn't a similar approach been applied to the resource potential which communities actively share? After all, there are plenty of means for doing so, which can preserve the freedom and autonomy of all involved.

Without the possibilities of good deflation, too much non tradable sector activity would remain a financial burden for limited income communities. It's time for real change in these basic systems. Even though existing inequalities will always be with us to some extent, we could still bring vast progress to non discretionary goods, services and environment structure which involves asset ownership. Whether or not societies prosper in the future, may well depend on how our non tradable supply side capacity is organized and conceptualized. There's plenty of work to be done, to improve these vital areas of our lives.

For Libertarians, Sustainability Matters for Economic Freedom

Is it possible for libertarians to find political support which isn't diluted by excessive identification with conservatives or progressives? While alignments such as these are understandable, they still tend to result in lost freedoms. And all too often, if economic freedoms are lost, it's only a short step further to lost political and social freedoms as well.

Too many ideological arguments turn around personal preferences for either government or business dominance. As it turns out, this reasoning is too simplistic for the economic complexities of our time, especially since many aspects of private and public enterprise are quite integrated. While this integration has often created positive outcomes, in other instances it results in negative complexities which make life more difficult for everyone.

The main issue at hand, however, is how both public and private endeavour are losing their ability to maintain real economy activity at consistent growth levels. What can we do, to ensure the extensive progress of recent centuries is not put at risk? I continue to hope that libertarians will assume new roles in promoting more sustainable forms of wealth creation. In many instances, doing so would include taking part in local economic experiments which promote both the well being of lower income groups and small communities.

Especially paramount is our need for sustainable local economies. Since much of our healthcare is stymied by centralized organizational patterns, the U.S. particularly struggles with today's pandemic circumstance. Part of our inability to productively respond, is due to the built in structural limitations of today's high skill service generation. Locally provided skilled services - where they are in fact possible - are caught in the political struggles of centralized revenue flows and their macroeconomic patterns. Indeed, these service patterns became more prominent with the added wealth of globalization. Hence it's not helpful, that losses in globalization could also lead to a partial demise of these centralized form of skills arbitrage.

We need a new approach to high skill applied knowledge, and libertarians have the opportunity to take part at a time in history when it especially matters. Even though it is difficult to establish additional high skill services through fiat monetary systems, time arbitrage could provide much needed new sources of wealth and economic stabilization. All who believe in the continued viability of free markets, could benefit by making time based services more amenable to free market approaches such as this.

By allowing time value to function as a valid economic unit, we could encourage stronger coordination patterns between individuals - patterns which ultimately lead to more sustainable outcomes. Only recall as well, how immediate reciprocity in services could help alleviate long term budgetary problems. When it comes to non tradable sector production reform, goals such as these are worth pursuing. Let's build more reliable social patterns for economic sustainability, while there is still ample time to do so.

Globalization is Still Vitally Important

There are often unexpected similarities between conservatives and progressives. One in particular, are the growing numbers who no longer believe in globalization. Might they get their wish for considerable losses in this regard? If so, what might such a reality consist of?

For one, deglobalization would bring about sudden losses in overall wealth - losses that would doubtless prove devastating in unexpected ways. For instance, few would be prepared for the financial fallout that would occur. In the meantime, the COVID-19 pandemic continues to disrupt global networks which were already impacted by the trade wars. Recently, Kenneth Rogoff expressed his concerns about this circumstance, and I've highlighted a good portion of the relevant Project Syndicate article in this post:

Even if the United States turns a blind eye to deglobalization's effects on the rest of the world, it should remember that the current abundant demand for dollar assets depends heavily on the vast trade and financial system that some American politicians aim to shrink. If deglobalization goes too far, no country will be spared. 

Also from the introduction:

The post-pandemic world economy seems likely to be a far less globalized economy, with political leaders and publics rejecting openness in a matter unlike anything seen since the tariff wars and competitive devaluations of the 1930s. And the byproduct will be not just slower growth, but a significant fall in national incomes for all but perhaps the largest and most diversified economies.

He adds:

The US has more to lose from deglobalization than some of its politicians, on both the right and the left seem to realize...In particular, many of the benign factors that today allow the US government and American corporations to borrow vastly more than any other country are likely tied to the dollar's role at the center of the system. And a wide array of economic models show that as tariffs and trade frictions increase, financial globalization decreases at least proportionately. This not only implies a sharp fall in both multinationals' profits and stock-market wealth (which is probably fine with some), but could also mean a significant drop in foreign demand for US debt.

That would hardly be ideal at a time when the US needs to borrow massively in order to preserve social, economic, and political stability. Just as globalization has been a major driver of today's low inflation and interest rates, shifting the process into reverse could eventually push prices and rates in the other direction, especially given what appears to be a lasting adverse supply shock from COVID-19.

As Rogoff noted, globalization has especially been important for dollar assets. This globalization benefit helped build our strong services economy, and greatly increased income potential in the U.S. as well. Yet some among the wealthy may already realize, the extent to which their basic and augmented income sources could soon change. By way of example: Even as lower income levels restore earlier spending levels, the rich have not really begun to do so. Should they suspect long term income changes in the foreseeable future, there may be good reason. Even though the basic wealth of today's rich is largely correlated with human capital and national redistribution, globalized wealth contributed an additional layer to their income (via personal investments) which to some extent may be lost.

Nevertheless: Among the reasons globalization is now threatened, is that too many investment opportunities don't accrue to individuals who lack the base "requirement" of educationally enhanced human capital. And there are other important reasons why many citizens aren't impressed with the wealth of globalization. Chief among these, are the high costs of today's non tradable sectors - costs which particularly impact lower income levels. In all of this, many local economies still lack constructive ways to reach out to local citizens, after a decades long process of lost local manufacturing employment. Before many citizens become willing to embrace globalization, they would need new opportunities in economic participation - opportunities which are also linked with the resources of time, place, and community.

Should nations find the courage to recreate non tradable sector participation, the losses of globalization would not have to be so extensive. Production reforms could also provide means for nations to better manage their debt burdens. By not relying so heavily on debt for services generation, nations could lessen their chances of defaulting on earlier debt accumulation. Perhaps there is still time to restore confidence in globalization, by giving citizens the chance to recreate more abundant non tradable sector wealth, close to home.

Education: Let's Restore Local Community Threads

Much of today's formal K-12 education, takes place quite separately from the lives of local citizens. Alas, this reality adds to the financial burdens of many small communities, where local citizens support public schools through lifelong property taxes. Even though local taxation sometimes leads to impressive school buildings and well prepared students, local circles of sustainability can still be broken, when students need to go elsewhere to put their skills to good use. What of the locals who may never gain the chance to meet these young people? What does society lose, when neither local citizens or students can benefit from what either group learns in life? How can a society sustain itself for the long run, when its knowledge based institutions seek monetary support to survive, but neglect to tap a vast abundance of human capital potential, so that all might thrive?

Clearly, our time value needs to be a greater part of the wealth equation for human capital. We could work to restore valuable community connections, especially those which promote the use of knowledge and skill for markets which otherwise tend to be in short supply. Enhancing the services productivity of all citizens is important, and all communities deserve active roles in today's knowledge based economy. Fortunately, it is within our power to realign local education, so that everyone might benefit from learning processes. Already we are seeing in a time of pandemic, how many knowledge centered institutions will struggle if they depend solely on taxation and redistribution, in the foreseeable future. Why not tap into the vast pools of human capital potential which are waiting to be unleashed?

Time arbitrage, with its reciprocal patterns of wealth generation, could provide opportunities for young learners to engage with many local citizens, particularly during their high school years. With a little luck, this approach might help heal some of today's political divisions. Plus, on a practical note, time arbitrage could lead to meaningful economic interchange, in years when students especially need resources that prepare them for adult responsibilities.

The recent COVID-19 pandemic also illustrates how students might assist others in the here and now. In particular, better communication systems are needed in small communities, so that all citizens can stay informed and up to date. One would think not much time would be necessary, before students could get digital versions of (yesterday's) local newspapers up and running. Such efforts could be readily coordinated without need for advertising revenue to keep the processes going. One immediate gain from such a project, is that small communities would be able to compile statistics about the effects of COVID-19 locally. In the meantime, they often have to rely on guesstimates according to big city statistics, for their own public health management options.

Ultimately, learning processes could be coordinated with larger cities, so that small communities become able to create a broad array of healthcare provisions. One possible pandemic response, might be for healthcare providers whose work is on temporary pause, to work with local citizens and students for the creation of local testing options and other vital assistance for those affected by COVID-19. Even though this would be a short term response, it nonetheless suggests future frameworks, by which prosperous areas might reach out to areas that were already left behind, prior to the pandemic. Given the chance, smaller communities might finally be able to realign local education, toward more productive and beneficial ends.

Notes on Personal Reciprocity vs Social Reciprocity

Between keeping up with developments re COVID-19, and efforts to clarify my own perceptions in regard to reciprocity, I deleted more material in the last post than was actually kept. So today I'll try again, to explore relevant differences between (what could be considered) personal and social reciprocity.

Free markets are often described as voluntary forms of exchange. Even so, too many time based economic interactions, are not as spontaneous and voluntary as they could be. When it comes to other forms of product, prices can usually do a good job of representing and coordinating the voluntary actions of individuals and groups. It's when final product contains substantial time based and experiential components, that people face too many obstacles in what they might otherwise create or provide for one another. Money is a tremendous price and signal, but it could perform even better, if mutual time preferences could also function as prices, signals, and stores of economic value.

Many activities take place either through the personal reciprocity of individuals, or the social reciprocity of groups. While personal exchange allows individuals to negotiate for common purposes, social reciprocity seeks to build bridges and common "middle ground", as well. Since beginning this project, I've tended to focus more on personal reciprocity, than social reciprocity. However the reality is they are equally important, for they often need to function simultaneously in many social circumstance. Even as personal reciprocity creates starting points between individuals, it's the larger group context of social reciprocity which encourages a cohesive and constructive whole. In other words: When minds "think alike" in terms of aspirations and personal commitments, individual daily contributions in this context, are more likely to create circles of social sustainability.

Both social and personal reciprocity require understandable social patterns which are voluntary and not forced. People are far more likely to continue reaching out to other individuals, once it becomes obvious their efforts will generally not be in vain. What's more, societies and their institutions cannot expect immediate family members to assume too much personal reciprocity in the form of internal family roles. When this occurs, human capital potential is limited, as is also the potential of group interactions as a whole.

Plus, when individual family members have plenty of options in group settings for time based services provision, each family member stands a better chance of maintaining their personal autonomy and self respect. Indeed, family relationships tend to be more positive and supportive, so long as all family members have ample opportunity to benefit from the personal reciprocity and social reciprocity of group settings. We often observe this now in the services generation of high income communities, for instance. The more possibilities each individual holds for time arbitrage, the less the chance that everyday interactions will be of a forced nature.

How might we create reliable patterns for mutual reciprocity which are more voluntary in nature than present day institutions?  Skills arbitrage - for all its monetary value - has proven insufficient for the generation of services, knowledge, and personal autonomy which societies aspire to, particularly during times of economic uncertainty. Time arbitrage could ultimately tap into more sources of human capital, than skills arbitrage is capable of. Eventually, time arbitrage could lead to sustainable forms of services generation, which take place via common and easy to understand frameworks.

In order to function effectively, time arbitrage would include recognizable elements of both personal and social reciprocity. As to the latter, new communities could be established, where common interests could be pursued as a long term continuum for the maintenance and care of applied knowledge. Best, these new sources of human capital could rely on internal organizational patterns to generate new wealth. Indeed, one might dare hope, that when societies falter for any reason, such communities would serve as repositories of human potential, economic integration, and long term economic stability. In these settings, personal reciprocity could become the base which is strong enough for the larger goals of social reciprocity.

Mutual Reciprocity Could Alleviate Fragile Systems

One of the main issues many communities now face, is the fact that neighbors who live in close proximity to one another, lack reliable methods for mutual assistance on a regular basis. What were once common and spontaneous forms of social reciprocity, have gradually been supplanted by formal service roles. However, these more recent patterns of social and economic organization, feature "empty spots" which are exacerbated by unfortunate events such as the COVID-19 threat. Regular readers are familiar with my advocacy for time arbitrage. I remain convinced that a marketplace for time value, could help to fill empty areas where there are now few roadmaps for mutual reciprocity.

In the months ahead, attempts to control the spread of COVID-19 will doubtless add more burdens to healthcare and financial systems alike. Ultimately, societies are going to need more than centralized patterns of knowledge and skill, to bring productive agglomeration in services to areas where it is needed most. How might we build a stronger economic context, for time based services at local levels? After all, decentralized patterns for the use of applied knowledge and skill, could help restore personal autonomy to average citizens. Plus, local patterns for skilled services generation, would make it simpler for all individuals to assist one another, during all kinds of public emergencies.

Healthcare providers already struggle with the limited capacity of present day healthcare systems. The U.S. in particular, is ill prepared to fully respond to widespread health threats. For example, self quarantine might become an important strategy, since little additional hospital capacity exists if millions become seriously ill at once. It would not take much, for a pandemic to overwhelm what our present systems can realistically provide.

Another way to think about what is possible for local services coordination, is the integration of lifetime education with local strategies for applied knowledge. Only consider what could be gained, if local property taxes were redirected to support local educational efforts which augment the possibilities of informed mutual assistance. Fortunately, there are viable ways to create stronger knowledge use systems. Long term commitments to the time value of all citizens, would help address the systems fragility of our times.

3D Printing Holds Vast Economic Potential

Some of the most encouraging news in recent years, is due to advances in 3D printing and technology. Recently I came across the video "3D Printing is Changing the World", which is well worth the twelve minutes it takes to watch.

Indeed, it's surprising that the near future possibilities of 3D printing have not been more widely discussed. Instead, artificial intelligence gets much of the innovation spotlight, despite the fact that 3D printing could prove equally significant - if not more so. For that matter, emerging 3D printing technology is already evident in cutting edge research applications.

Granted, it may take some time, before 3D printing technology finally benefits local environments and improves the quality of life for millions with limited incomes. But once this finally occurs, the process could also usher in long term productivity gains. After all, 3D printing for local manufacture, would produce building components in ways which vastly reduce required time (purchase) hours for a wide array of building needs.

In the meantime, the above linked video highlights some 3D printing applications which are taking place in the here and now. For instance, healthcare researchers are taking 3D printing to a wholly new organic level, in hopes that organ donor scarcity might finally be alleviated. Plus, 3D printing is already contributing to models, parts and tools on demand, thereby assisting multiple development processes. For that matter, we have already entered a crucial period in which prototypes are evolving into mass manufacture design. From here, 3D printing processes will assume their first widespread production stages.

What directions might all these efforts take? Since there are currently many unknowns, perhaps this transitional effect helps to explain a recent manufacturing lull. While everyone's attention has mostly been on national trade disputes as disrupting global supply side patterns, there's also the reality that initial mass manufacture changes are still in progress. Doubtless, some participants wish to observe what takes place in the next few years, before broad investment options become more obvious. Some manufacture response patterns may change the extent to which global manufacture supply side patterns are configured, as well.

Another interesting aspect of the video was how advanced recycling technology could emerge, from research efforts to create sustainable site based manufacture on Mars. Should this research come to fruition, it could create impetus to produce more plastics as a permanent component of local recycle for local manufacture. I find it most encouraging, that research intended for projects far from earth, could create vast potential at home, by restoring production possibilities for millions of us - quite literally in our own backyards.

Recall that in the not so long ago past, local production in tangible goods, made it much simpler for citizens to pursue intellectual and artistic challenges without dependence on revenues from centralized national budgets. With a little luck, 3D printing could not only lead to production gains in non tradable sector activities, but also tradable sectors, thereby restoring the viability of decentralized manufacture in millions of left behind communities.

State Capacity, Endogenous Design, and Exogenous Wealth

What is state capacity still capable of contributing to modern economies? In some important respects, state capacity is no simple matter. Yet there is plenty of wishful thinking on both sides of the political aisle, as to what governments "should" be able to accomplish for long term growth and prosperity.

Not so long ago, the governments of advanced nations were better positioned, for fiscal policy to function as an active component of economic dynamism. However, as commitments to special interests and citizens in general have grown, fiscal policy has gradually become better suited as an economic stabilizer, than for additional growth prospects.

Perhaps this is a reasonable outcome, for national governments which have long depended on endogenous monetary design. Much of this capacity exists quite separately, from the vast exogenous monetary wealth that extends well beyond national borders. Yet the more tangible nature of the latter is largely due to tradable sector activity as our primary source of wealth origins. Consider how crucial are the roles of exogenous monetary wealth. Should any global calamity reduce this capacity, the ability of national governments to function normally via fiscal policy would be immediately compromised. Despite the supporting role of governmental endogenous design, exogenous wealth generation is still central to long term economic stability.

Nevertheless, the relationship between endogenous and exogenous sources of wealth has become so complex, one can be forgiven for imagining monetary realities as solely endogenous in nature. The main problem with endogenous monetary creation, is that populations can become too dependent on future forms of resource reciprocity, making individuals less inclined to seek direct reciprocity with others in the present. Even though future commitments in the form of monetary wealth can be quite versatile, they should not be be relied on to such an extent that people forget how to apportion time and skill for mutual reciprocity in the here and now.

Too much reliance on endogenous future wealth to fund today's services, may lead to excess passive monetary holdings in the GDP of nations. The dynamics of general equilibrium are essentially defined by interactions between the primary markets and the secondary services markets of future obligations. When expectations become too rigid in secondary market flows, sectoral balance is gradually disturbed. Today, there are rigid expectations in housing and time based services, which have contributed in turn to outsized expectations elsewhere in the economy - for instance levels of income supposedly now "necessary" to live normal lives.

Any efforts to expand on state capacity in the present, are going to run headlong into these expectations which have led to extensive budgetary obligations and social commitments. Producers and consumers alike are heavily vested in these particular alignments, which largely define how domestic wealth is constructed. In a post which reflects on state capacity, Scott Sumner explains:

...one aspect of state capacity is the ability of countries to act in a way that is seen as desirable by a consensus of people who don't have a special interest to inhibit change. A government that is able to "do the right thing" has more state capacity than one that does not, even if somewhere between 1% and 40% of the time the "right thing" turns out to be wrong.

Once societies rely on inefficient centralized coordination patterns, citizens move further away from a consensus on how those patterns should function - all the more so when millions of citizens are involved. Scott Sumner has often noted his own belief that a nation's democratic potential to achieve the "right thing", is likely only feasible in decentralized settings.

However, part of the problem for decentralized decision making in the use of knowledge and skill, is that special interests in the 20th century sought out national protection for how skills and knowledge could be utilized at local levels. Consequently, the U.S. may not be able to devolve important skills and knowledge use decisions to local levels in the near future, in a general equilibrium capacity. For this reason, I've suggested defined equilibrium settings which could create more accessible environments for human capital potential.

Time arbitrage would make it feasible for local citizens to gradually build stronger forms of democratic governance. Possibly the greatest benefit of time as symmetric wealth value, is that it would allow time to function as an exogenous or original source of wealth. Ultimately, time arbitrage could build upon decentralized settings in ways reminiscent of the organizational capacity of tradable sectors.

The knowledge use systems of time arbitrage, would make it possible for participating groups to bring aggregate time value into better balance with other forms of exogenous monetary wealth. Once time units become capable of purchasing other time units, the resulting new commodity standard would allow time to function as a reliable wealth source. Time as direct resource reciprocity would place (gently guided) mutual assistance into tangible and primary market forms. As an exogenous wealth source, time arbitrage could gradually help to reduce the political pressures and expectations that state capacity now faces.

Defined Equilibrium as Defined Product Quality

There is a practical dimension for the potential of defined equilibrium: People would gain economic freedom to define products they regularly use, which are also linked to place and time. In other words, there would be more opportunities to take part in the construction of product which is part of our everyday lives. Non tradable sector product is heavily represented by the basic scarcities of time and place, hence lower income levels could greatly benefit from personal management in these areas.

Without such options, non tradable sectors impose numerous quality requirements on product with time and place connections - especially building construction and services. However, governments are poorly positioned to generate affordable non tradable sector product, in part since quality requirements for luxury product create additional governmental revenue. What's more, when governments seek to impose regulations on non tradable sectors, sometimes the only way to do so is to grant additional favours to the private interests involved.

Ultimately, more decentralization is needed, to prevent these unfortunate incentives from reducing the economic access of even more low income groups. Locally defined equilibrium settings could allow citizens to determine the extent of quality requirements they can reasonably afford. It helps to ask: Which quality gains are obviously real and possibly deemed necessary? How difficult is it, to separate these categories from what are perceived as luxuries?

Fortunately, tradable sectors have been answering such questions with extensive market choices for a long time. Indeed: In recent centuries, alongside the beautiful and exclusive, we have countless examples of inclusive and accessible no frills production. While there are of course notable exceptions, much of this tradable sector product proves capable of fulfilling the required task with minimal fuss and expense. Why has it been so difficult to gain similar options in our non tradable sectors?

Defined equilibrium settings could provide such opportunities, by bringing aggregate non tradable sector costs more in line with the (monetary) wealth potential of tradable sector revenues. These decentralized communities and areas would function in certain respects like opportunity zones, except they would provide new economic opportunities for those willing to invest with personal time commitments. This is an altogether different approach, from the opportunity zones open to investors who are primarily concerned about monetary results. By allowing time units to assume economic value, there would be considerably more breathing space, for society to fulfill its most important tasks and challenges.

Local participants would be able to contribute to non tradable sector innovation, if they can regain sufficient legal production rights in defined equilibrium settings. These locally zoned permissions would once again make it possible for individuals without college degrees, to become part of decision making processes for housing, infrastructure and time based services needs.

Nevertheless, local citizens would have plenty of prior assistance in their efforts to construct simpler functionality in services and the physical building components of their environments. Hierarchical organization remains quite rational in earlier stages of manufacturing components, for instance. These are complex processes which require precise and standardized procedures to function as intended. However, citizens need a stronger say in production management, once physical resources are configured for the "final" product forms that support living and working arrangements.

By far one of the most important aspects of defined equilibrium, would be simplified legal settings which everyone can understand. Legal complexities are problematic enough in any circumstance, but they particularly get in the way of productive lives for those with small wages. When are extensive regulations and legalities actually necessary? In the book Life Without Lawyers, Phillip K. Howard considers this issue:

Two great intellectual currents came together over the past century to bring America to this state of hyper-legalism. The first, which grew naturally out of the Industrial Revolution, is the idea of organizing to do things. Frederick Winslow Taylor, the father of scientific management, preached the idea of creating systems in order to increase productivity. Organization is undeniable essential for complex products. Henry Ford's assembly lines proved that...Today we assume unquestioningly that any activity will be more effective if we detail in advance how to get the job done.

Instead of greater effectiveness, the non tradable sector hierarchical result has led to extensive problems in societal coordination, along multiple dimensions. All too often, the rigid rules of non tradable sectors get in the way of mutual respect and mutual assistance, instead of creating efficiency. It's time to experiment with defined equilibrium settings, so as to make non tradable sector markets more accessible for all citizens.

If the Economy and Middle Class are OK, What's Wrong?

Understandably, people hesitate to take seriously the warnings of bearish observers, when the economy appears to be in good shape. What need is there to complain, given the relative ease of finding employment in many environs? That might help explain why a Reason interview with Russ Roberts was simply titled "Economist Russ Roberts Isn't Worried About The Middle Class."

Of course, reality is more nuanced - as is Russ Roberts, who carefully considers the issues presented in his podcasts. Still, who would deny the correlation between today's dynamic economy and the strength of the middle class? Hence for participants in a recent Gallup poll, non economic issues took precedence over those with more obvious economic implications. 25 percent of respondents were specifically concerned about government and poor leadership, while only 11 percent believed economic issues in general to be a higher priority.

Since the economy is strong, and the middle class appears to have little worry in this regard, why are policy makers paying such lip service to its economic problems? (Particularly if the public's real concern is policy makers?) Scott Sumner explains:

Politicians often complain that middle-class Americans are lagging behind because the system is rigged against them. They are right. But the politicians don't tell the entire story. Only a modest part of the rigging is done by big corporations like Facebook, Google, Goldman Sachs and JP Morgan. The biggest problem is various interest groups comprised of middle class people, who rip off the general public.

If we had free markets in health care, dentistry, optometry, fire protection, home building, car retailing, and many other industries, then we could shed enormous numbers of workers from useless activities. These workers could then produce useful output elsewhere, dramatically boosting real GDP and living standards. 

That's a lot of market restrictions! Sumner ruefully adds:

If a politician promised to crack down on doctors, dentists, teachers, firemen, and older homeowners (like me), they'd certainly get my vote. Unfortunately, that's pretty much the only vote they would get. 

He also acknowledges the extent of improved living standards since the seventies, in spite of all that has stood in the way of such gains. Indeed, for higher income levels, ongoing maintenance in existing physical infrastructure will continue to contribute to public health for the foreseeable future. One observes this especially in areas undergoing gentrification, where extensive municipal and related building costs are still feasible to uphold. On the other hand, lower income levels and communities left behind, may suffer more health setbacks in the decades ahead, if physical infrastructure does not benefit from extensive innovation in the years to come. Hopefully, production reform in these areas will eventually bring municipal costs into a more affordable range for millions of citizens and thousands of communities as well.

As things currently stand, aggregate costs for physical infrastructure and vital time based services are accumulating faster than aggregate government revenues. Alas, buried in these costs are the same public/private crony connections which enrich the lives of some middle class individuals, while making it increasingly difficult for other citizens to fully participate in a modern economy.

For me it is somewhat surprising that more people don't see long term economic burdens in a context similar to governmental issues. After all, it won't be long, before the lack of governmental resources in relation to existing obligations, begins to negatively impact pensions and overall governmental ability to tend to a full range of financial obligations. Once this occurs, taking to the streets in protest, may not be as useful a response as one might imagine.

How to think about our inevitable budgetary shortfalls? In many respects they no longer belong to some distant and unimaginable future. Yet there is still ample hope to turn things around if - instead of casting about for blame - citizens become familiar with the underlying economic structural realities which have brought us to this impasse. It would be better for all concerned, if citizens could explore more decentralized and less costly ways to accomplish important tasks at local levels. A structural approach to growing societal burdens, would mean less severe budgetary ramifications, once the days of reckoning become more obvious. Fortunately, we can build new options for sustainable organizational capacity, in both services generation and physical infrastructure. Why not take a no blame approach this time, in doing what needs to be done.

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.

Defined Equilibrium and the Generational Debt Burden

Given all the discussion regarding a more sustainable use of earth's resources, one might expect more concern about sustainable long term budgetary strategies as well. Why, then, hasn't this been the case? Part of the problem, is that governments and populations are overly reliant on long term debt for the funding of high skill services generation.

However, this approach leaves too much applied knowledge vulnerable to the limits of asymmetric reciprocity. Too many debt instruments now discourage symmetric resource use for services generation. Alas, debt as services "solution" encourages a societal perception that carefully managed national budgets aren't as important as other aspects of sustainable resource use. Even though monetary representation (in its most immediate and usable form) reflects direct resource reciprocity, a substantial amount of monetary representation supports less direct means of high skill services funding.

And, in part because of the future reciprocity expected of services debt, monetary representation of the latter is less likely to be kept in active circulation in the economy, than the former. When money becomes "sterilized" on such terms, it may actually be designated as a measure of current value, instead of as a current medium of exchange (This process also prevents nominal inflation at a general equilibrium level, but simultaneously deflates investment capacity). Part of the impulse to sterilize money is due to the lack of immediate reciprocity for services generation. Hence some monetary representation (also reflected in divisia) can actually obscure the crucial role of money in wealth creation via immediate resource symmetry. Chances are, it will be a while before differences in monetary divisia roles become more apparent, since monetary representation is still evolving in response to recent services dominance in general equilibrium conditions.

In all of this however, future generations are expected to pay for many high skill knowledge based services being provided in the present. This being the case, is it any wonder that while younger generations are concerned about earth's sustainability, they aren't particularly worried about long term budgetary sustainability? Especially if policy makers aren't attempting to reduce the burdens of future generations in this regard! When every political party starts to run with the money while in power, what would make free college for all any more egregious than other forms of budgetary excess! Since younger generations have been sorely compromised at basic levels of governmental policy, that could explain why they no longer find a middle ground in policy making, all that compelling.

Unfortunately their lack of concern is quite understandable. That said, I still believe in long term approaches for long term debt burdens. Let's face it, Keynes probably didn't emphasize that "In the long run we are all dead" because he didn't care about the long run. Rather, he may have been worried that economists wouldn't continue making strong enough contributions or adjustments as needed, to help ensure economic stability for the long run. Call me old fashioned perhaps, and not sufficiently cynical given present political circumstance, but I still worry that if long term debt burdens are not soon addressed, much of today's economic prosperity will eventually unravel. Regular readers also know I doubt we can still tend to these issues on general equilibrium terms in a complex economy. Which is why I suggest local defined equilibrium settings, to help maintain and preserve long term economic stability.

For the most part, the general equilibrium conditions of many nations have become too complex to respond well to ideas - economic or otherwise - which could readily be applied to a structural whole. Indeed, some even complain that there is a dearth of new ideas! Chances are, what's really lacking are suitable settings where new ideas could readily be tried with minimal repercussions if they don't work out. Governments need to give their citizens permission to conduct local small experiments via new economic platforms, instead of subjecting entire nations to economic experiments which are more likely to end up as social disasters. Plus, governments are increasingly exposed to competing factions which prefer different approaches to economic engagement. Why not try different approaches in small community settings, instead of attempting to impose a one size fits all economic pattern on a diverse citizenry?

While local versions of defined equilibrium would create boundaries for time based services coordination, these new communities would remain open to surrounding economies, especially for tradable sector activity and global ideas re infrastructure potential. Still, these communities would reject forms of non tradable sector rigidity which made debt burdens so intractable in the first place. Hopefully, new economic options for non tradable organizational capacity, might eventually lessen society's dependence on debt formation. Affordable building components and reciprocal symmetry in services generation, could give governments much needed possibilities for the problems of long term budgetary debt.

Decentralization For The Greatest Good

When many rules have centralized origins - especially in large populous nations such as the U.S. - governments struggle to achieve the greatest good for the greatest number of citizens via taxation. The fact that utilitarian outcomes aren't easy to come by for diverse populations, helps explain why policy makers of opposing parties have become less willing to compromise. So why do we insist on imposing the same sets of requisite rules and standards on everyone? Why can't our economic freedoms be more closely associated with the possibilities of economic diversity, so that all citizens might live in settings where they can create good lives for themselves and others around them?

Nevertheless, one may take comfort, in the fact rigid expectations are nothing new. People have attempted to impose one size fits all regulations and social requirements on one another for a long time. For instance, even though Walden was published in 1854, Henry David Thoreau details how the social expectations around housing, contributed to the impoverishment of many in his time:

Most men appear never to have considered what a house is, and are actually though needlessly poor all their lives because they think that they must have such a one as their neighbors have. As if one were to wear any sort of coat which the tailor might cut out for him, or, gradually leaving off palmleaf hat or cap of woodchuck skin, complain of hard times because he could not afford to buy him a crown! It is possible to invent a house still more convenient and luxurious than we have, which yet all would admit that man could not afford to pay for. Shall we always study to obtain more of these things, and not sometimes to be content with less? Shall the respectable citizen thus gravely teach, by precept and example, the necessity of the young man's providing a certain number of superfluous glowshoes, and umbrellas, and empty guest chambers for empty guests, before he dies? 

Sometimes, societies impose such standards as a way to exclude others who they believe cannot adequately contribute to the needs of given communities. The problem however, is that more communities aren't created with infrastructure which accurately reflects what many individuals could contribute to the well being of all concerned, given the chance. Where, exactly, are excluded individuals and groups expected to go, especially when there are few domestic markets competing via product innovation, to enrich the production potential of lower income levels? And why haven't such individuals already gained the economic freedom to create anew for themselves, what many institutions have proven reluctant to provide?

Social expectations around housing requirements in particular, have proven especially harmful for the bottom 50% of working adults in the U.S. without sufficient income to live where reliable work can readily be found Even though lower income levels have been losing real wage capacity for decades, we have scarcely begun to discuss supply side approaches which could lead to more positive outcomes.

Alas, no one can realistically pretend that trends for low pay work will be reversed soon. We need economic options which allow us to bypass the sticky markets of today's extensive non tradable sector requirements, so that low wages will go much further than is presently feasible. Decentralized local settings which more accurately reflect what small incomes are capable of, could give millions new hope. Such settings would have far more ability than any centralized government, to create the greatest good for the greatest number of citizens. Defined equilibrium for housing, infrastructure and services would also make use of limited regulatory patterns, for groups which find mutual assistance a way to improve the well being of all concerned.

Consider as well that when it comes to housing, one need not classify Thoreau's housing sentiments as anti-materialistic. It's one thing to disavow material possessions in order to seek other time use options, yet altogether another to disavow certain forms of consumption which many individuals can't realistically afford in the first place. Life is much easier when we can accept such realities and move on, instead of having to constantly struggle with income differences in the face of one size fits all regulatory absurdities. People should be able to make low cost choices where desired, yet still have plenty of local economic options to lead meaningful and respectable lives.

A supply side approach would allow us to take the focus off struggles concerning aggregate demand and government "solutions". Doing so is all the more important, since governments hold considerable responsibility for the centralized consumption regulatory barriers which impact the lives of low income groups. Let's build decentralized settings where non discretionary costs might finally come within reach, of millions who seek to make the most of the resources they actually have available.

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!

Can Structural Dialogue Transcend Its Limitations?

Even though structural arguments have been getting some airing of late, they aren't being discussed in ways which really get at the root issues. Consequently, dialogue about the potential for progress can come across as superficial, which certainly isn't what the participants are intending. Or worse, entire debates about our economic realities get reduced to the language and struggles of identity politics.

In some respects, it's not hard to understand why this is happening. Since we live in an economy which has had ample time to mature, general equilibrium conditions are so well developed (entrenched?), that structural experimentation is best approached outside these boundaries. Still, it hasn't been easy to imagine decentralized settings for structural reform. For instance, how to create new service markets via internal means, when so many time based services rely on the redistribution of centralized states? How do we create new forms of building manufacture and infrastructure, and expect institutions which rely on traditional buildings and infrastructure, to make room for them? It's not always possible to do so, which is why new communities are needed which are more likely to embrace structural innovation.

One reason structural dialogue gets undermined, is that additional redistribution remains the expected norm in most instances. Yet redistribution is - and has been - an unrealistic approach for some time. Not only would it would reduce a needed emphasis on new wealth building potential, general equilibrium revenue would make it more difficult for defined equilibrium settings to contribute to economic potential via their own terms of engagement.

Another problem which inhibits productive dialogue, are arguments which accomplish little because they occur at such an abstract level. One notorious offender is whether capitalism bears the "blame" for our most pressing economic problems. We can't afford to continue vague arguments which do little more than assign blame. Rather, we need to determine where capitalism does actually come up short, and respond to that reality. Specifically: What if there are not enough markets, instead of too many? What if the supply side of our modern economies is completely MIA, in communities too numerous to name?

How so? Consider how non tradable sectors have essentially ignored millions of individuals, among the two thirds of the U.S. population who lack college degrees. Sometimes it seems these sectors only care to compete for the high income levels among us, or they simply aren't interested. And much of what is produced in these sectors is also non discretionary. Given the importance of this product, how, exactly, are people without college degrees expected to live normal lives? Where are the options they can feel good about, for housing, infrastructure and a full range of high skill services? Even though we understandably celebrate how tradable sector activity has reached out to low income groups in recent centuries, no one can realistically "rest their case" on the achievements of tradable sector representation for all income levels. Alas, tradable goods are discretionary, hence this isn't enough.

What about the vast market potential for human capital, which has yet to be tapped? Even though human capital is responsible for much of a modern services economy, how our institutions have utilized human capital thus far, is not necessarily a good fit for millions who seek inclusion. If structural dialogue is to break free of its restricting boundaries, human capital has to be taken more seriously, as an integral factor of knowledge based production.

The real potential of human capital is not solely the province of the best and the brightest. It is more about the aspirations of the millions who aren't yet successful, but are doing the best they they can to build a good life for themselves. When we conceptualize further progress and long term economic growth, what makes us imagine the best and brightest among us are going to be the ones convinced this is the way to go? Why should the most successful among us, be the ones who desire more growth and progress, when they are flourishing and fully vested in the world that already is?

All too often, when we think about progress, our minds dance along the "cutting edge" of prosperity, where we imagine well to do groups flourishing even more as the latest and the greatest is introduced. But what is prosperity, if it contains too few means to positively impact the entire landscape of human possibility? If we don't think the potential of applied knowledge holds real promise for those still left behind, chances are we aren't equating the masses of humanity, with what we believe progress to actually consist of. Yet it cuts to the core, when we forget that long term growth and prosperity, is really about creating economic means for all who seek to grow and flourish. We cannot forget that the ones most likely to embrace innovation and change, are precisely the ones who have yet to be vested, who consequently are most likely to invest and advocate for, the places where experimentation is just beginning.