Polarization is a Problem for Progress in General

Today's lack of political good will is worrying enough, but it also comes with plenty of economic ramifications. For that matter, both NIMBYism and culture wars tend to reduce economic dynamism. Just as the "not in my backyard" mentality turned housing markets into major headaches, it even affects technological change such as transitioning to electric vehicular transportation. Many aspects of our lives and environments come down to what people of all political stripes don't want us to successfully engage in, as opposed to what could be accomplished.

In all of this, whatever happened to the hopes and dreams of centrist politicians and citizens? After all - even a decade earlier - moderates were still a meaningful part of public dialogue. While centrists occasionally held alternative views, they were often able to bring opposing parties to the table to get things done. 

Indeed, moderates have been important for societal progress up until recently. A relative few remain who still highlight economic progress and the benefits of growth. Unfortunately however, the majority of such gains became associated with prosperous citizens and regions rather than average citizens - let alone those with limited incomes.

If polarized landscapes weren't already dangerous enough, what might that mean for younger generations? Indeed, will they eventually become receptive to the idea of civil war? Don't forget also that younger generations aren't convinced of the future viability of Social Security in the U.S. Even though I hope Social Security continues to function as a glue for economic stability and common purpose, one can't be too certain. Should Social Security benefits be reduced in the near future, that might further destabilize political desires to remain united.

Polarization also represents a loss of what was once known as Third Way political thought. For instance, when I was much younger, Bill Clinton's presidency was associated with this line of reasoning. Alas, other than environmental protection, who still believes such rationale is relevant? From Wikipedia:

The Third Way supports the pursuit of greater egalitarianism in society through action to increase the distribution of skills, capabilities and productive endowments while rejecting income redistribution as the means to achieve this. It emphasises commitment to balanced budgets, providing equal opportunity which is combined with an emphasis on personal responsibility, the decentralisation of government power to the lowest level possible, encouragement and promotion of public-private partnerships, improving labour supply, investment in human development, preservation of social capital and protection of the environment.

Why was much of this abandoned? Part of the problem is how advanced education became a place for elite dialogue at the expense of economic dynamism. Meanwhile, active knowledge use - since it lacks any grassroots equivalency - is being confused with information and flawed logic mostly meant to circumvent action. Formal education is certainly not the place for increased distribution of skills and capabilities! Instead, the "gateway to the good life" hoards its limited slots according to what monetary compensation might amply reward. Worse, few policymakers remain willing to balance budgets, since abandoning financial restraint means squeezing a few more lucky participants onto the gravy train of human relevance. And decentralisation? The only decentralisation my state government is interested in, is the powers it can remove from both Washington and cities which might otherwise function better if they were allowed rights to do so. 

I continue to believe the best way to overcome polarization, is to create a knowledge based economy that can bypass the culture wars of educational access. However, while I remain guardedly optimistic, my hopes have radically diverged from what many once considered optimal paths for abundance and success. Is it still possible to use knowledge in more practical ways, instead of wielding it as the ultimate weapon for income divisions and urban rural divides? Perhaps we will find out soon enough. 

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.

Don't Blame the Fed for Supply Side Recalcitrance

While there's a common refrain re "easy money" in a recent AEI article, this one comes with a twist. According to Tobias Peter and Edward Pinto, the Fed is also at fault for a growing divide in terms of inequality:  

The Fed's easy credit policies are widening wealth inequality as they fuel persistent home price inflation.

That's a serious charge. But how true is it? And does Chairman Powell - or the Fed for that matter - really not understand "how price inflation differs from inflation for commodities and services"? Granted, the authors have a point about current home price instability. But I believe these particular assertions against the Fed to be unsubstantiated and a convenient diversion from what's at stake. There's been plenty of times when it was appropriate to accuse the Fed of wrongheaded moves, but this isn't one of them. Rather, I'm encouraged by the Fed's recent maintenance of monetary velocity, especially given the difficult transitions of a post pandemic recovery. 

And insofar as the supply side is concerned re housing, technological innovation need not be as insurmountable as the authors imply. Of course builders struggle to meet demand due to high prices for labour and materials - not to mention NIMBY considerations! But when has this not been the case? Fortunately for all of us, a great deal of private sector activity has adapted and evolved, when faced with resource constraints. It's time for building sectors to do likewise, in shifting to manufacturing strategies which include more flexible means of ownership and land utilization. So we are within reason by asking at this historical juncture: if not now, when?

Also, consider the awkward policy expectations which Tobias Peter and Edward Pinto contribute to (re Fed obligations), by asserting:

The Fed's easy credit continues to drive housing demand higher, but has done little to boost supply.

Does this mean the Fed should somehow become more responsible for supply side circumstance? If so, in what capacity? The last time I checked, the Fed's primary responsibility was nominal in nature. Indeed, should they assume market activities currently neglected by other private interests, who is going to be comfortable with such an outcome? Hence even though this is an illogical assertion, it must seem occasionally "useful" anyway, since it implies private interests need not lose sleep over damaged markets. 

Another sad aspect regarding inappropriate blame, is that many in the Fed do take such criticisms quite seriously. Indeed, how often does Fed "meddling" actually mean members of the Fed are losing sleep on behalf of others less concerned? This is no minor matter, given the nature of present day structural shifts in the economy.

Just the same, one must be careful in assigning blame to today's non tradable sectors, despite their exacerbation of social inequality via quality requirements and lack of innovation. All the more so, since structural fault lines and their resulting disequilibrium, aren't easy to understood. What's at stake however, is that we start making up for lost time. Ultimately, it's real economy conditions instead of the nominal realm, which cause such social and political unrest. 

What about high house prices, then? Don't get me wrong, I dislike today's high house prices as much as the next person. But I'm not fool enough to imagine that tight money - let alone the possibility of bad deflation - would somehow make me more "equal" to anyone else. I don't want everyone to lose in this scenario, via the money illusion that would make it appear I was somehow getting ahead. Consequently, I'd rather not sacrifice the nominal stability that does more than anything else right now, to prevent an unraveling of mutual financial obligations and societal trust.

Sure, it would be great if I could find retirement housing that was more in line with my actual Social Security. But I'd still rather not witness millions of citizens facing a world of financial hurt, in the event of bad deflation and seriously falling house prices. Deflation simply isn't a good thing, unless it positively impacts output so as to make life better for all concerned. So, let's get serious about building homes and workplaces which take advantage of centuries of innovation. We've absolutely run out of excuses, and only further the damage all around by pretending it's not feasible to do so.

Housing is in Need of New Profit Models

Were it not for the structural inefficiencies of our non tradable sectors, the pandemic would not have proven so difficult, and Washington might have been less compelled to add more long term budgetary burdens. Alas, these fiscal "rescues" intensified in part due to the housing costs of lower income groups. Lower income levels also suffered more employment losses than other groups. If all this weren't enough, as the pandemic eases, employers are finding it difficult to hire new employees, since there are too few low to medium priced housing options in places with good employment potential.

These are just a few reasons why housing needs new models for ownership and profitability. Not only could new housing models benefit from further manufacturing innovation, but also organizational capacity which includes lower income levels in land based ownership. Even though lower income levels presently have access to manufactured housing, for instance, they still suffer from a severe lack of land use options for these homes. 

In recent years there's been plenty of dialogue about the problems of housing supply limitations. Yet the main response (thus far) has been encouragement for more of the same, in terms of traditional building methods. Where are market innovators for housing when we need them most? According to Axios:

America has a record-low number of homes available for sale - just 1.03 million, according to the latest NAR data. 

Only consider how this compares to the recent housing supply peak of more than four million in July of 2007. However, what many believed to be a bubble in the last price run up, was occasionally linked to excessive building in places with limited zoning. As it turned out, many places where people wanted to live, weren't where home building was still actively encouraged. These were also years when communities disallowed flexible ownership arrangements, such as settings where manufactured homes could be brought in. 

What kinds of short term responses might help these circumstance? Bill McBride of Calculated Risk recently offered some suggestions and additional thoughts about near future housing supply. Even though many market observers are pessimistic re housing in general for 2021, McBride expects sellers to resume putting their homes on the market, once pandemic circumstance subside and sellers regain the confidence to interact with buyers. For that matter, rising interest rates might decrease demand. As to policy, McBride notes that if higher income owners were offered a one time waiver on capital gains, more higher priced properties would be placed on the market. As to lower income levels, recall how many single family homes and condos had been previously converted to rental units:

Another policy that would help would be to offer a tax break to landlords of single family homes and condos, if they sell a rental property this year. 

I for one would be especially pleased if there were more condo offerings on the market, since condos are one of the best ways for aging homeowners to downsize and lessen their maintenance responsibilities. That said, insofar as new housing prospects, traditional builders mostly find profits in the sometimes excessive square footage of higher income level housing. Increasingly, builders face their own pressures in hiring construction workers, not to mention the rising costs associated with their own supply networks. These factors make it difficult for traditional builders to even realize a profit from lower income housing. 

It would seem these realities are something many municipalities have been reluctant to come to terms with. Not only has NIMBYism gone too far, it has led to effects which negatively impact the economy along with many areas of our personal lives. Which is why I'm convinced that serious innovation in housing and land use might do more good for all concerned, than NIMBY proponents realize.

The Freedom to Build, to Be, Yet Also Destroy

Since personal freedom includes elements of both creation and destruction, the freedoms that societies may hope to preserve are becoming more complicated. By way of example, not all innovations are the same. Some innovations which are oft described as societal improvements, nevertheless don't provide unalloyed benefits to all concerned. This particularly holds, when someone intentionally builds products specifically intended for destruction.

For that matter, in contrast with weapons meant to kill, the destructive urges of today's "cancel culture" are relatively benign by comparison. Am I wrong in suggesting that the cancel culture of the left, mostly lacks the violent tendencies of certain wannabe authoritarians on the right? While the political right is understandably frustrated with the cancel culture of the left, I doubt they are actually as afraid of extreme violence from the left (at least presently), as some pretend to be. 

Plus, when it comes to ideology, so long as mental capacity is engaged in actions which aren't overwhelmed by emotion, one at least hopes for less violence in political outcomes. Sometimes these realities are blurred though, when ideology becomes a convenient excuse for acting out, due to some form of massive grudge against various elements of society. There are additional dangers as well, should those in power actively seek support from people whose emotions clearly run counter to logical thought processes. 

Should politicians seek out future votes based on emotions rather than logic and rational thinking, we stand to lose even more of our freedoms. If politics mostly becomes a matter of besting one's perceived enemies, societies will pay the price through even more losses of personal and market based freedoms. Has Washington forgotten that markets still offer society's best potential for successful pursuits in creativity, imagination, identity, and the nature of our physical environments? Or, perhaps too many of these once free markets have already been reserved for the elite. If so, the additional result is more fuel for the fires of destruction. How many more would decide to act out in anger, should they continue to lack the legal ability to build a meaningful destiny? This is certainly a question worth asking in the U.S. given the realities of our gun culture. 

Chances are, we might still reduce the societal impulse to destroy, by restoring rights to personal identity and allowing citizens to build lives on more sustainable terms. Only consider why it has become so important to focus on careful market solutions, as Republicans now question the freedom of businesses to express their own political opinions. Imagine the good that could result, by making room in our markets for stronger production rights which focus on positive aspects of identity and freedom. 

It's time to support stronger production rights for all citizens, especially in terms of skill potential and innovative simple housing forms. Perhaps if more of our positive freedoms are restored, people will eventually become less inclined to act out their negative freedoms. When future innovation is discussed, much more is at stake than improvements at the margin. The innovations which matter most, have potential to improve the outcomes of average citizens in average places. Why not encourage the human impulse to build anew, in more positive ways.

What We Can Do, What We Can't Do

New years are a good time to reflect on life's possibilities, especially when it comes to societal progress. Nevertheless, how do we distinguish between realistic potential, versus what is essentially wishful thinking? For example, even though the world needs a lot more mutual respect and civility, desired outcomes such as these cannot be coerced. 

And while Adam Smith and many others celebrated the free markets which so contributed to civility in recent centuries, much of this fortuitous societal coordination takes place in tradable sector activity. Still, it's not unreasonable to ask: Could our non tradable sector markets also contribute to greater civility? How might they gain their own newfound freedoms? In particular, is it feasible for the resource of our scarce time, to garner more economic and societal value in the near future? Or will vital markets for time value, remain outside our realm of direct influence?

In the twentieth century, housing and time based services were regulated in ways which reduced the degree of autonomy and control individuals held over their own destinies - particularly those with substantial income limits. If millions were to regain control via new production and consumption potential, how much civility might we all regain in the process? At the very least, we still benefit from the civility which goes hand in hand with high levels of tradable sector resource coordination. And while we will never put a stop to what's bad in the world, we could still create more good, by allowing symmetrical (hence reciprocal) coordination of time via market tested means. Time arbitrage is one entry to this realm of possibility. It is a broad spectrum approach for improving personal autonomy and self worth, with potential to bring new hope to people from all walks of life.

With additional economic value for mutually coordinated time, millions more citizens would derive a greater sense of self worth. Consider one important reason why this matters. So much in the world which is unfortunate and destructive, includes the reality of poorly defined self worth. How can we expect people to be trustworthy or unfailingly good to others, when their time use potential lacks sufficient economic value to build a normal life? Granted, not everyone would personally benefit from stronger markets for time value. Just the same, millions more would finally learn to effectively negotiate with others for their wants and needs. I believe that gaining the chance to do so, would result in fortuitous circumstance whereby people are more inclined to be kind and civil. 

Even though the passing years have given me cause to excessively dwell on what can't be done, I still believe we are not helpless to act in positive ways. Clearly, we have reason to do so, when the evening news also dwells on what we seemingly cannot remedy. While there will always be instances when no one can decipher personal motivations for violence and hatred, there will still be positive ways to respond. Sure, some market efforts are going to fail, sometimes even miserably. But I continue to believe that viable and carefully representative market platforms are the best means we have, to build a better, more inclusive future. Plus, as Ricardo Hausmann recently noted in "The Missing Link in Economic Development":

If someone is not doing something that we as a society value it might be because they can't, not because they don't want to. This weakness in economics has far-reaching implications for our understanding of economic growth and development, which is fundamentally about the social accumulation of productive capabilities.

Markets should not be so willing to devolve, into a twisted rational of what societies supposedly can't do. When they become rigid and inflexible, does anyone really wonder why capitalism gets disparaged? Why not work to ensure greater freedom for our vital domestic markets, so they might better contribute to human civility and hope for the future? Why not 2021 as the perfect place to begin? Lets turn our non tradable sectors into realms where we regain hope for what we can do as a society, instead of remaining hopelessly divided over what we can't do.

When We Can't Always Get What We Want...

Somehow I find it fitting that Mick Jagger of Rolling Stones fame, studied economics before joining the group. Indeed, the song "You Can't Always Get What You Want", is an apt reminder how we seemingly forget to build vital need based markets. Yet if our domestic non tradable sector providers paid more attention to these areas, perhaps people would be less inclined to question the integrity of today's economic and political systems.

Granted, many producers face the temptation of raising the bar on product definitions where possible, so that product and services reflect consumer wants more closely than actual need. After all it can be quite profitable to do so. Unfortunately however, if too many non tradable sector producers choose this route, markets gradually become destabilized. What might be done? Again, cue what Mick Jagger and Keith Richards wrote:

But if you try sometimes you just might find

you get what you need

It's time to get serious about creating more accessible free markets in our non tradable sectors. We are confusing too many experiential wants with what is essentially necessary in order for citizens to thrive. For one thing, taxpayers face additional burdens, due to negative externalities caused by low income workers who lack sufficient income for even limited sets of non tradable sector costs. One indicator we have procrastinated too long in this regard, is that middle class citizens are beginning to seek "living" wages for non discretionary needs as well. Domestic protectionism might be out of control for instance, when a general lack of basic markets encourages politicians to mandate wage floors. And higher mandated wages only make it more difficult for employers to realize profits. We need to focus on production reform in markets where it matters most, to stop this destructive cycle.

Alas, even with fewer profits and businesses in operation, we can't always get what we want when it comes to "livable" wages for all employees. Yet today's workplace offerings are thought of as "meaningful" mostly when when abundant wages are part of the package. Perhaps it's not surprising that the most negative responses to my work thus far, have been due to my advocacy for good deflation in time based services income.

However, good deflation in time based services might be the only way to increase the use of workplace knowledge in more meaningful and accessible ways. Let's just admit it: Great wages are one of those societal wants which is impossible to fulfill for all citizens, via either fiscal means or private sector mandates. The sooner we face this reality, the sooner we can move towards a future of restored hope, as millions gain the right to inclusion in more productive organizational settings. For one thing, good deflation in time based services would do much more than simply address consumer "affordability". Good deflation in income and building requirements, would give us the legal and social grounds to share the work which people find most meaningful in life. 

One reason citizens expect so much from fiscal policy, is that governments are expected to be responsible for meeting many societal needs. The problem in this regard, is how governments and private interests raised regulatory and price bars on basic needs too many times. Each time these bars were raised, governments incrementally gave up their ability to influence or fiscally support citizens and economies, one unfortunate rule and regulation at a time. Now, many basic needs go unmet, as regulatory rules mostly accrue to the societal benefits (wants) of higher income levels. Among the sacrifices in this regard are the one time effectiveness of fiscal policy. Where once it held a valid role in addressing societal needs, now it is closely bound with specific political aims. 

Consider why this matters for inequality and applied knowledge preservation, as well. Fiscal policy now only holds a minor role in smoothing income differences. But more importantly, it is losing its ability to fulfill the role of spreading and supporting knowledge for the use of all citizens. To a large extent, these roles are diminished by the fact redistribution mostly augments the wants of specific high income groups. 

Which is also why I find it difficult to understand, the high hopes attached to fiscal policy "remedies" such as MMT. Even if political support for Modern Monetary Theory should turn into a policy option constant, what might its adherents hope to accomplish in any concrete sense? And that's not even considering the disparaging attacks MMT advocates tend to make on monetarist views. To me at least, Modern Monetary Theory advocates appear mostly concerned with middle class wants, rather than any need based structural issues faced by lower income levels. Granted, there is some good which can still be achieved via fiscal policy. However, we should let go of believing fiscal policy can actually address existing inequalities, let alone the productive use and preservation of knowledge in society. 

 

Hopefully, my readers won't get the impression I view wants as a societal negative. I absolutely believe that wants can be positive as well. However, let's be careful to ensure basic needs are actually met, first. What's more, do so without changing the goalposts so as to obscure basic needs once again. For instance, don't insist that smartphones or credit use are absolute necessities. I don't need either in order to thrive, plus opting for these things would reduce my spending capacity in other crucial respects. Indeed, once basic needs are met, and one finally gets to breathe easier, the occasional wants of a tradable sector (retail) splurge need not break the bank at all.

When societies forget what it actually takes for lower income levels to survive, they also lose track of the extent to which progress actually takes place for societies as a whole. At the very least, tradable sectors have given us excellent examples for full needs based markets, especially when luxury adaptations come from basic commodification structures. Whereas non tradable sector activity, due to the existing scarcities of time and space, tends to leapfrog need based offerings for what may appear as societal progress, but in certain respects is instead luxury mandates for low income levels which can ill afford such requirements. 

Profit is integral to businesses and sustainable economies in general, but profits should not be sought by needlessly obscuring the differences between want and need. Too much of society is presently paying the price for this approach. For one thing, it is a simpler matter to determine basic survival needs than some imagine. Once we become willing to highlight the real differences, innovations for our physical environments in particular, could proceed from this understanding.

Until we realize good deflation in time based services and building requirements, these areas of our lives will remain structurally fragile. As things currently stand, the domestic markets of our non tradable sectors demand too much in terms of debt levels and redistribution, for governments and citizens to successfully shoulder these burdens in the near future. Let's commit to innovation in need based markets. Even though societies can't fulfill every thing their hearts desire, we could still do a much better job of market creation which addresses actual needs.

The Economic Freedoms We Still Need

Only in retrospect is it apparent how many economic freedoms we've lost - especially in recent decades. But how to respond, as special interests and legislators alike continue to place limits on our personal agency? 

In particular, consider how we seek to participate in the economy - not just as consumers, but as producers. As producers, we get the chance to experience economic freedom via active and meaningful roles with others. Consequently, the personal agency that derives from active use of skills potential, is more important for personal identity than is sometimes recognized. 

Our active participation in society is vital to innovation possibilities in both our physical and intellectual environments. However, realizing the potential of innovation, also requires that individuals keep a full range of production rights, so that such rights are not constantly diverted to preferred groups and associations. Not only do we need to protect permissions for personal management of physical resources, but also the necessary permissions which allow us to assist others through the use and application of knowledge. 

For that matter, our extent of personal freedom as producers and consumers, affects our ability to retain knowledge. In a recent study the authors discovered that people learn more readily when the relevant material is freely chosen. Despite the fact this education comes with a given bias, the bias framing lends greater meaning to the actions we choose. Indeed, according to the study, "the learning rates were slower in the forced-choice situation than they were in the free-choice one."

The economic freedoms that individuals need in their roles as producers and consumers, are crucial if societies expect to preserve a full range of economic access for all concerned. Production rights matter for ongoing activities which are practical and necessary, but also those which are aspirational and experiential. Perhaps one of the simplest ways to think about production rights is to consider a broader context in which economic freedom is possible. The simplest approach for me in this regard, is to envision how economic freedoms could contribute to the societal processes of maintenance, building, creating, understanding and healing. 

Maintenance is the foundation which supports all the others. From an economic standpoint, sometimes we struggle to maintain economic complexity, since maintenance activities in certain respects are the least compensated of the entire group. Yet even though some maintenance activities are basic in nature, they make it possible to sustain everything else, not only in terms of knowledge and information, but also our physical realities. When we lose crucial economic freedoms at a foundational level, our personal autonomy tends to be compromised in areas of higher levels of economic complexity as well. 

As lower level economic freedoms have been lost, so too society's ability to successfully engage in the higher activities of healing and mutual understanding. Only consider how activities in this regard could otherwise bring the actions of healing to a higher order in terms of positive societal intentions. Even our abilities to build and create are being blunted, and basic healing options are in disarray. In all of this: When people insist that intentions mostly lead to negative outcomes, only recall that intentions always begin at individual and personal levels, and they are both positive and negative in nature. It is only when positive intentions are disallowed, that the inevitable negative intentions societies also hold, come to the fore and gain the upper hand. We need to revive the positive intentions which can protect our economic freedoms, while there is still time to do so.

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.

Design Markets That Let Basic Incomes Meet Basic Needs

Might formal versions of basic income become part of our future? While I believe an open ended or non reciprocal approach would be counterproductive, I do advocate for "basic" income levels which can support new forms of mutual employment - especially those which take place via non hierarchical means. Indeed, we are entering a historical moment when many individuals could benefit from new paths of economic experimentation such as this. All the more so, since many citizens and communities now lack many production options which prevailed when more labour was still necessary in our tradable sectors. Non hierarchical services formation would mean good deflation in income expectations as well, for the low income groups which need services access the most.

Just the same, basic levels of income have been with us all along - even though low income groups are all but ignored in the costly market requirements of our non tradable sectors. Why haven't these groups received more respect or acknowledgment from the providers of (largely) non discretionary markets? Chances are, one of the best ways to preserve economic stability and long term growth, is by making market design more receptive to what many businesses enterprises and individuals have been able to pay their workers and employees, all along.

By no means is the issue of small income representation, one of just younger workers or else older employees who lose stable employment with benefits. Future contributors to market design also need to take retirees into account, especially those in the U.S. which rely mostly on Social Security. Not only do many present and future retirees lack private pensions, their savings also don't go far enough in a low interest rate environment. If this weren't enough, new retirees (such as myself) need to take into account the expected losses in revenue for Social Security in the next 15 years. How will we adjust our lifestyles in the meantime? What should many individuals expect to forego in the years ahead? Will we as a country be prepared for future Social Security losses? It's time for our supply side to step up to these challenges.

I continue to hope for a concerted market response for the millions who live much of their lives with limited income realities. Even though governments are not well positioned to tend to these issues, fortunately there are many others who could craft productive responses. Often, the best way to do so is simply start from a clean slate via new and flexible communities. When it comes to housing and other building needs in particular, start with interchangeable building materials which are not only water resistant and easy to put together, but also relatively impervious to insect infestations. Such options are especially important for people as they age, since traditional housing materials become less reliable in the very years when aging homeowners already dedicate more time, energy and money to the care of their own bodies.

At first glance, tiny homes or RV living appear to provide affordability options. However, both are - even when only indirectly - too dependent on the same traditional infrastructure settings which pose problems for community maintenance in general. Consequently, many existing communities are not comfortable in making room for either option, especially since low income groups can't sufficiently contribute to existing tax bases. Only consider this added wrinkle for retiree budgets, especially given what they can now expect in terms of average healthcare costs. Not only do we need extensive production reform in services generation, we also need substantial innovation in physical infrastructure, so that new communities need not depend on high income level groups to create and maintain local physical infrastructure.

As an aside in all this: When it comes to building more flexible forms of new community, shared goals, aspirations and intellectual challenges are also basic needs for individuals and families alike. What we have yet to explore in current versions of property ownership, are platforms which make it possible to better align common interests and aspirations among neighbors. All too often, when neighbors lack any commonality other than physical proximity to one another, they aren't necessarily happy in having to live so closely together, possibly for a majority of their lives! Indeed, what does this example of limited commonality suggest for the larger picture of segregationist impulses if - unfortunately - a substantial fraction of white neighbors scarcely get along with or trust one another?  Granted, this personal observation on my part (as a white person) is no excuse for any extreme expression of racism. Still, we might get better societal results, by making the future ownership of group association less about monetary income or privilege, and more about where common aspirations and goals find economic platforms in which to flourish. I believe time arbitrage and flexible ownership are ways we could make this happen.

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.

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.

Frontiers For Basic Gains Are Also Progress

What makes the possibilities of frontier so important for the progress of nations? Much more is at stake, than frontier progress which expands opportunities for human wants along the margins of a given equilibrium. While this high income approach to economic progress has been dominant for some time, something is missing. Our non tradable sectors have paid scant attention to millions who would more fully participate in the economy, were they able to do so. What about the wealth potential of newly generated local settings which could encourage low income groups to fulfill basic life goals? After all, this approach would ultimately create more consumers able to encourage the growth frontier of "cutting edge" at the margin, once millions of individuals gain sufficient footing in more basic endeavour.

Chances are, the frontiers which matter most, are those which include starting points for the innovation of need based circumstance. Part of what makes these kinds of frontiers so important, is their potential to allow people of all income levels to more directly manage and create their own life circumstance, thereby contributing to economic growth in the process. Too many such opportunities for self control of local environment, have instead been given over to special interests, redistribution and subsidies, in the belief that experts "should" instead be managing the circumstance which low income groups face.

Indeed, innovative gains which contribute to basic life conditions, are also those which add to economic growth in ways that can actually surpass what occurs along the"cutting edge" of a given equilibrium margin. Alas, the latter more often involves shifts in wealth and resource capacity from one form of consumption to another. Only consider how the relatively recent frontiers of the New World also created new opportunities for citizens to start over in need based terms. Ordinary citizens of those frontier days, often had the good fortune to play starring roles in these earlier stories of new wealth creation. One of the primary challenges of our time is to create new forms of economic frontier, where gains in the innovation of basic needs on the part of everyday citizens, continue to define how we experience our world.

All too often, experts assume that basic economic settings where ordinary people might gain a new lease on life, are a thing of the past in modern day economies. However: Even though immigration is a good solution where possible, it should not be relied on as a sole means of economic escape from conditions that aren't conducive to survival and human thriving. Especially since immigration has only become increasingly difficult for many would be emigrants. Perhaps we could set ourselves an easier task, by creating new forms of economic frontier for beginning anew. In these local settings, many aspects of regulation would be greatly simplified so as to encourage basic innovation on the part of those directly involved.

Let's not assume that need based economic gains are a part of the past, especially in advanced nations where this approach to progress has mostly been abandoned. There are simply too many citizens and communities left behind, to focus all efforts for wealth frontier on further gains for higher income levels. Chances are, need based frontier for wealth creation could be just as useful and practical as ever. Basic human needs in general, could greatly benefit from occasional examination and social adaptation. Modern day economies should not remain limited to a focus on expanding the wants of higher income levels. The economic needs of lower income levels and the potential for supply side innovation in this regard, will always hold relevance in the continued pursuit of progress.

Some Productivity "Mysteries" Are Solvable

One often hears, "To what extent does technology contribute to productivity?" But an equally important question is, "What else may be closely involved?" For instance, when do societal expectations of what comprises quality product, get in the way? Are those expectations creating additional burdens for our already scarce time use options?

If quality product expectations (such as housing and services) keep requiring ever more of our scarce economic time, more citizens will end up excluded from basic market processes in the years ahead. Essentially, this means aggregate productivity is also being lost, despite productivity gains which may still accrue at upper income levels. Markets aren't as beneficial as they seem, if the costs of basic life necessities leave little room for discretionary spending options for millions of people. On the other hand, free markets are a major boon for all concerned, if they offer accessible basic products and services for all income levels - thereby creating a base of sustainability. Should this in fact take place in the near future, some of our production mysteries will also have been solved.

Certain features of our non tradable sector activity have been reducing aggregate productivity gains for quite a while. Nevertheless, there's good news, for we have the ability to simplify some of the current confusion as to potential productivity gains. How so? One of the most basic elements of productivity gains which still holds, is how such gains accrue to our advantage when they give us additional time options, monetary options, or both. Importantly, even though we now inhabit a services dominant economy, this is as true as it ever was.

Productivity gains, when they do occur, tend to take place in more than just a single dimension. An apt 20th century example for productivity benefits at multiple levels, were washing machines which entered our homes around mid century. Not only did we realize wealth gains from increased aggregate output (and output scale created a positive wage benefit), washing machines freed up lots of time for other activities as well.

Only imagine how easily we could realize similar production gains today, by adopting lightweight yet strong materials for a broad range of building functions. Indeed, many building components could combine to create relatively small structures (compared to today's square footage requirements), simple enough in form to require a mere fraction of the maintenance and renovation which is now necessary. These new living/working options would restore millions to a sustenance level of activity at the very least. In other words, far more individuals would remain closely attached to wealth creation processes, than if they were dependent on others for shelter. Any society that forces undue dependence through excessive living costs, will also tend to create less overall output or wealth. Whereas greater independence in living and working arrangements, leads to more personal choice for countless other market options, hence greater output and productivity gains.

Let's reduce the production mysteries in our dialogue, by addressing how arbitrary product definitions and social expectations impact our time commitments and ability to freely choose. We could reasonably ask of products or services: Can they free up our time for activities we might prefer over present activities? If not, then why not? When we don't take this kind of approach, we inadvertently allow "quality" product requirements to reduce the larger possibilities of our lives. Even worse, we allow those arbitrary product definitions to reverse a centuries long process, of the productivity gains which added so much to real wealth and societal progress.

As Diane Coyle notes in a recent Project Syndicate post, we could all benefit from a more nuanced understanding, as to what makes productivity relevant for our lives. She stresses how already in OECD countries, four out of every five dollars "purchases services or intangible goods". Coyle is spot on, in suggesting we need to think in broader terms about productivity measures and how they may affect overall well being. Otherwise, without a better approach to measured services output (and I suggest time arbitrage), it will only become more difficult, to determine whether societies can keep moving forward as before. Let's stop our struggles over how government demand among citizens is apportioned, and pay more attention to the supply side circumstance which matter most for everyone. Many of us have a good chance of thriving, if we can regain our former rights to select for size. Being able to do so, is what economic freedom is really about.

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.

Many Services Need Better Market Coordination

In spite of regular reminders to improve our skill sets as we go through life; the fact remains, as Karen Weese notes in "America's Fastest Growing Jobs Don't Pay a Living Wage", that some jobs don't translate into fully compensated human capital. How to think about this paradox?

For example, a community worker discovered in one locale that women were mostly working full time with wages at approximately $24,000 a year. Alas, even though this sounds like reasonable wages to old folk like me, it's not sufficient to cover much more than basic bills in many instances. How on earth do these individuals successfully coordinate their services with those of others? And since many of these women worked as home health aides and personal care aides, they were actually seeking assistance in the form of uniforms or scrubs. Ouch, these don't cost much. I priced them at $10 at the local Dollar General after reading the above linked article, and that's when they're not on sale. Weese continues:

Over the next 10 years the occupations with the most job growth in America will not be the techy jobs that most of us think of as the jobs of the future, like, say, solar-panel technicians or software engineers. Instead, they'll be the jobs held by the women in Hyde-Miller's community center neighborhood: home health aide and personal care aide. More than one million new aides will be needed over the next decade, in addition to the 3.2 millions already in the field, the Bureau of Labor Statistics reported Wednesday. What's more, six of the 10 occupations providing the most new jobs over the next decade will pay less than $27,000 a year. That's more than 15 million people, working hard at jobs that simply don't pay the bills.

There's another problem regarding this reality which is not always taken into account. She asks: What about those who do gain the needed education to exit this kind of work, for better wages? More to the point: what if everybody did so? Who would be left to tend to those who are in need of additional assistance from others?

Like many, Karen Weese argues for higher wages for low skill work, which is understandable. Nevertheless, even when workers benefit from nominal gains, those gains are temporary. Only the real economy can create the supply side conditions which make multiple wage levels relevant. As a quick aside: Without production reforms, UBI could become a particularly thorny taxpayer burden, as its recipients find themselves in similar circumstance to today's low skill wage levels. All the more so, if UBI or perhaps government guaranteed work is implemented as means for policy makers to relieve themselves of time based service responsibilities. One can only hope, they might see to it that new service market options are in place first.

More progress can be made, by creating better services coordination and innovating our way out of the present hurdles of today's building and infrastructure requirements. A more pragmatic approach is needed - one capable of creating good deflation for a wide array of non tradable sector product and services. Only after new equilibrium is explored, would societies find it realistic to build knowledge use systems which don't fully compensate at the expected monetary levels of the present.

Fortunately, there are ways that basic skills sets can be shared with more challenging skills sets, for all concerned. Besides the normal voluntary matching of time arbitrage, time based service product could also be coordinated via local community "service taxes". Another useful approach would be time value insurance, which creates market space for individuals to "pay it forward" for those who can't reciprocate. For instance, should someone stop and do yard work for an elderly person on a hot summer day (does he really need to be out there pushing that mower?), their activity would also become part of a local public record, ensuring someone remembers to do the same for them, later on.

When we purchase insurance essentially of a social nature via money, the results are not always efficient, particularly when what we really seek is the time and attention of others. By way of example, in the U.S. we are encouraged to wait as long as possible, to tap into the insurance of Social Security. And while Social Security is primarily a matter of monetary security, the Medicare aspect of this form of social insurance, is mostly about access to the time of others when we need it most.

Here's the problem. Even though Social Security can no longer be taken at 65 without penalties, we still need to start monthly payments for Medicare at age 65, regardless. And if we don't, there's a ten percent penalty for monthly Medicare payments which grows an additional ten percent each year. How is one supposed to come out ahead by delaying their Social Security as long as possible (when they don't have other sources of income), if the previously required Medicare time frame still applies? The head scratching discrepancy between Social Security and Medicare requirements, makes all too evident the fact that money does not represent our aggregate time value as well as one might imagine.

Time arbitrage could help create markets for time value, which are more direct, representative and efficient, than what money is currently able to provide. There are ways to create better coordination, for vital and useful services of all kinds. We just need to begin the process of exploration, to discover what is possible.

Is Growth Necessary For a Successful Economy?

Is growth actually the best way to measure economic success? Dietrich Vollrath says it doesn't have to be so, and explains why in Fully Grown: Why a Stagnant Economy is a Sign of Success, which is due out in January. From the University of Chicago Press review:

Our powerful economy has already supplied so much of the necessary stuff of modern life, brought us so much comfort, security, and luxury that we have turned to new forms of production and consumption that increase our well being but do not contribute to growth in GDP. 

Tyler Cowen also highlights a text excerpt which gets into some of the specifics of Vollrath's argument:

Although there were plenty of changes in the individual markups firms charge, many of them actually fell over the last twenty years. What explained the overall rise in markups from 1.18 to 1.67 was that spending shifted away from firms with low markups and toward firms with high markups. Which high markup firms did we shift our spending to? Well, a lot of service firms, including those involved in communications, technology, health care, and education. In short, the rise in economic profits and markups we see at the aggregate level is part of the overall shift toward services we discussed a few chapters ago.

Here is where things get a little weirder. Baqaee and Farhi show that the shift toward high-markup firms was good for productivity growth. Whatever the source of a high markup, it indicates a product that is very valuable relative to its marginal cost. If we take the inputs required to produce a low-markup product and use them to instead produce a high-markup product, then we have raised the value of what we produce. As this increase in value came from reallocating our existing inputs toward a different use, rather than from accumulating new physical or human capital, the shift in spending toward high-markup firms shows up as an increase in productivity growth.

Nevertheless, we still need to consider the fact additional growth remains desirable at a global level. For that matter, nations with advanced economies continue to seek local growth, particularly since many citizens and communities lack full participation in a 21st century knowledge based economy. Only consider these realities in utilitarian terms. Have we already created the greatest good for the greatest number, before making luxury the default option for economic goal setting?

If citizen and community majorities were already engaging with sustainable infrastructure; assets and services in the form of luxury product would be aggregate gains. But there's a problem. We still have insufficient market capacity for simpler and more basic forms of non discretionary options. Meanwhile, citizens and communities continue to add on debt to sustain luxury versions of infrastructure and services which are actually out of their reach. In other words, the market has yet to create the greatest good for the greatest number at basic levels of need, as opposed to the wants of discretionary choice. Yet no institutions - at least to my knowledge - are yet addressing this supply side reality directly. Which could help explain why some policy makers are likely to continue seeking higher growth levels in aggregate, whether or not economists believe it necessary to do so.

As to Vollrath's arguments, if sufficient basic non discretionary options were in fact available for low income levels, his conclusion might be essentially correct. Today's low growth economy would be reasonable, if citizens and communities were already proceeding from a financially sustainable base - one that doesn't need a growing revenue stream so as to pay down debt. However, there are problems with luxury consumption when it cancels out basic infrastructure, asset and service formation for low income levels, especially during times of great income variance such as the present. And today's non tradable sector institutions lack the incentives to ensure that lower income levels gain basic economic options by which they could live relatively normal lives.

Again, luxury consumption as a broader component of GDP is likely positive, so long as more basic forms of consumption are not suppressed. When they are, as is currently the case, societies take on additional budgetary burdens which are not easy to resolve, long term. Even though lower income levels have benefited from the real wage gains of additional output in recent centuries, much of their real wage gains are a direct result of the good deflation of countless forms of tradable sector product. Let's not forget the benefits of good deflation, and its role in economic stability over time. We still need good deflation as a contributor to many local settings and communities, so these citizens can hope to lead productive lives well into the future. More output with less cost is central to economic prosperity. Good deflation is the best way to address the extreme income variance in society which will doubtless continue.

New creation of non tradable sector good deflation is imperative, given our historical moment of relative wage stagnation which leaves supply side means as the main recourse to improve the real wage capacity of lower income levels. Only recall as well that a predominance of luxury options in product which does not scale, reduces market capacity in areas which do scale. The resulting imbalance bears considerable responsibility for wage flattening, since service sector activity generates less output in relation to tradable sector output.

In short, more good deflation is needed in areas which remain exclusively devoted to luxury. Let's create valid supply side options to ensure that those with small wages can live normal and productive lives. Should we elect to do so, policy makers might not view higher monetary GDP levels or excessive fiscal policies as the sole options for economic gains in the near future.

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.