Incentives Matter for Time Arbitrage Potential

An important aspect of time arbitrage is the need to secure time based services, starting with those which aren't exactly top career choices. Plus, these tend to be poorly paid, particularly services for elderly assistance. And since people who work for the elderly may struggle with their own financial responsibilities, they aren't always trustworthy and reliable for the people most dependent on their care. 

Granted, it can seem the obvious solution is to ensure adequate pay for all employees, whatever job one happens to be responsible for! Unfortunately, societies have shown time and again that the notion of "livable wages" for all, isn't feasible, despite the tremendous need. My regular readers know that the fact money will continue to be insufficient incentive for such work, serves as a starting point for my own suggestions regarding markets for time value.

If we can't create markets which specifically reward time value, there may ultimately be cultural ramifications. For instance, as the costs of traditional healthcare and nursing homes continue to rise, societal expectations would increase for individuals to make undue sacrifices for their own family members. While it's understandable that existing institutions are less willing (or able) now to pay for time intensive services, we need new institutions which can do so in their stead.

When it comes to incentives for time based markets, one thing to consider is the need for autonomy, and how it revolves around ideas of fairness associated with shared responsibilities. Still, when we purposely spend time with others, those interactions often benefit from the undivided attention of both individuals involved. Indeed, this undivided attention can often be critical to services outcomes. 

Yet attention to details with its associated time related costs, is often more costly than what existing institutions can still provide. When institutions are willing to pay well for time based services, they may expect high skill knowledge providers to commit to such a degree, that burnout becomes inevitable. Even so, excessive time commitments can be burdensome whether one engages in simple skill sets or high skill activities. In time arbitrage, a full range of skill levels would be apportioned so as not to create undue time commitment burdens. A fuller sharing for all skill levels, could also bring respect to work which is now almost treated as a form of social "punishment" for those who struggle with traditional education. 

Here are just a few of the links I've come across lately which highlight the need for a better marketplace for time value. Occasionally I find myself overwhelmed at the extent of time based services needs which simply aren't being met at any skill level. Alas, as a society we have scarcely begun to address these concerns. How could anyone claim real economic progress, if societies keep trying to move forward without better means of coordination for applied knowledge and time based endeavour in general? The sooner we face the fact that money alone cannot accomplish these vital tasks, the sooner we can begin to create new free markets in time value.

How to think about better aligned incentives in this regard? We share a number of basic time commitment priorities in our lives which warrant consideration. One way to think about the processes involved is this: What services are specific individuals willing and capable of providing, so long as doing so doesn't interfere with or somehow impose on the other important facets of our lives? Recall that what anyone might be tolerant of providing in an hours time, is not the same thing as activities one prefers on a more regular basis. Yet markets which rely solely on monetary incentives, don't distinguish well for these differences in relative time preferences.  

More specifically, time arbitrage could take place in several ways. The basic form would be agreed upon time share agreements between two individuals. These commitments would  occur as close to the same time frame as possible. That said, it would not always be possible to benefit from time arbitrage on these terms. Fortunately there are also incentives that would compel individuals to commit time, for which one would hope to benefit at some point in the future.

For one, there are moments of spontaneity, in other words those occasions when people do something for others "just because". One way to think about this is "paying it forward", only this approach tends more toward monetary gifting than services. However, the voluntary actions of time arbitrage would be recorded in the same manner as other aspects of time arbitrage into a broader framework. In so doing, the initial voluntary action functions as partial economic unit which turns into a completed exchange (and its associated full economic value) once the provider accepts a voluntary action from someone which they don't need to reciprocate.  

Another important economic incentive is the natural concern for our own well being, should we become temporarily or even permanently dependent on others in some capacity. This of course also ties back to the concerns of elderly citizens mentioned above. Toward this end, time arbitrage functions as a form of social time based insurance. It's an example of partial matches we can initiate in the here and now which might not be reciprocated for a long time. Such matches could prove especially helpful during periods when we fall short on more immediate time matches with others, for instance. What particularly distinguishes social insurance from monetary insurance is its direct nature, in terms of mirroring the kinds of attention we would seek from others should we become more dependent on them. One way to broaden the potential of time arbitrage for purposes of social insurance, is to seek matches not just for one's personal needs, but also in terms of home maintenance and/or care for family members. 

There's one more consideration as well. When it comes to personal incentives, what are our greater aspirations in life? How might those aspirations change over time? Local community coordination would not be complete, if participating groups didn't make room for everyone to discover challenging work which suits their own motivations and long term goals. Recall as well, how this is the part of time arbitrage which has the potential to contribute to applied knowledge in its more complex forms. What's different in this regard, is the time arbitrage approach to knowledge sharing. 

Frozen Foods Brought Economic and Cultural Change

As it turns out, frozen foods came with unanticipated effects which are still relevant. Once electrification transformed factory production, it also made widespread refrigeration feasible, which ultimately led to frozen foods manufacture. A quick Google search further elaborates:

During the 1940s, the volume of frozen foods available to consumers boomed. It wasn't until the 1950s, though, that the first frozen ready meals hit the shelves in the United States.

Once frozen meals made their way into our homes, the production based expectations of our interpersonal relationships began to dramatically shift. Not only did time use patterns change among those primarily responsible for kitchen duties, but also other family members - particularly for families with limited incomes. Even now, frozen foods in the form of prepared meals, remain one of the simplest cost effective ways to "save time" in the course of a day. 

However one trade-off in these recent changes, is that many processed frozen foods aren't necessarily healthy! Even so, frozen foods are valuable production and consumption options, since they promote personal autonomy by freeing more time for daily routines. Further, the trade-off decisions involved for optimal health versus time saving convenience, are a reminder how personal health involves more time based commitments, than today's healthcare systems can readily provide. 

There was also a cultural trade-off, in terms of the ambivalence surrounding what women could accomplish with their newfound freedom from domestic responsibilities. How might gender relationships change, once women experienced new lifestyle options? 

What was perhaps not widely recognized, is that women were only a part of this changed cultural equation. For one, frozen foods manufacture has given real benefits to men insofar as their own preferences for meals. Equally important is how young, old, and disabled individuals became able to assume more central and often desired roles in kitchen responsibilities. Nevertheless, some of us still love to cook from scratch, even though due to market evolution, cooking is no longer highly valued as a practical skill. Basically that means we end up having to eat more of the leftovers ourselves!

Consider what these changed realities also suggest, regarding other domestic burdens many still face. In particular, some individuals with limited income, lack the stamina to fully maintain dwellings which have yet to benefit from new technology. Only imagine, how innovation in building design and manufacture, might one day alter this unfortunate reality. Once individuals with limited means become better able to take care of needed renovations, their non economic time value would also be improved. Granted, frozen foods manufacture reduced non economic time value for many women. Hopefully these individuals (and countless others) can one day regain value for their non economic time, so as to master their environments with less need of expensive services and other assistance.   

In all of this, technological advances have changed social expectations and there's no going back to earlier cultural realities. This is relevant for both the right and left. Indeed, consider how many individuals of both sexes come to prefer cooking for one, to the compromises involved in routinely sharing meals with others. Likewise, some forget that a truly healthy diet includes more hours in the kitchen than what might be possible. Perhaps these are moments when one can at least cut some fruit and cook some fresh vegetables on the stove, to go with that prepared frozen entree which only needs to be briefly heated in the microwave. 

Exit, Voice, and Skills Arbitrage

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

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

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

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

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

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

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

Implicit Land Rent as Potential Real Wage Gain

Why would land rent value be important, in terms of defined equilibrium settings which could contribute to the spending power of real wages? Today, productive agglomeration is in short supply, because much of it is limited to high income locales. What, then, could help implicit rent become a more affordable fixed component of the production function for knowledge based endeavour? Both questions matter for communities which seek to generate productive agglomeration for a wide range of ability and income. How would one define "affordable" specific land value which doesn't run counter to the wealth of local income realities, for instance?

Since the two most important factors for those with small wages are generally housing and services needs, it helps to consider how these two could also be interconnected, via implicit land rents. In a defined equilibrium for example, time based services would provide much of the initial aggregate economic value of a start up community. Nevertheless, in general equilibrium, the services to land rental value link is merely a starting point - given the many aspects of production which also contribute to local aggregate income. The more productive complexity that exists in any given setting, the more it is represented in local income and real estate values. However, not only has this process raised the costs of economic access for local landowners (and renters), by necessity it excludes many more who wish to participate on similar terms. Again, the Baumol effect has its natural equilibrium limits.

Defined equilibrium would approach land values in ways that allow applied knowledge to function as an accessible starting point for economic community. To this end, local land value would particularly reflect the maturity, or lack thereof, of local services generation. Management of implicit land rents as a local consumption standard, could provide an institutional response to the present day lack of productive agglomeration. Presently, productive agglomeration mostly exists where both salaries and implicit land rent are already high.

The core of such an equilibrium would consist of flexible infrastructure and building components, and an applied knowledge continuum for a full range of services generation. In order for a defined equilibrium to maintain access to lower income levels, much of what otherwise would be represented by monetary value, becomes correlated with aggregate time value as measured by gains in local skill and and economic diversity in services. Not only would this value in use process help preserve services complexity in the event of severe economic downturn, it makes possible a free market approach for time value in general.

However, in conceptualizing these possibilities, it helps to reflect on what is normally the starting point for monetary economic value in local settings. How does rent factor into the costs of production? What does implicit rent mean for one's opportunity costs as a landlord, especially given what has been necessary for home ownership in a knowledge based economy? How does local aggregate income level correspond with local production (what local property generates), or the real estate which also reflects local aggregate income value? Indeed, which comes first? Paul Samuelson offers ways to think about this in Economics (page 527 and 528):

Since rent is the return to an inelastically supplied factor that would still be supplied to the community even at much lower prices, the direction of causation is as follows: The prices of goods really determine land rent - rather than having land rent determine the prices of goods.

Okay, for us this would mean the aggregate value of services helps to determine land rent, right?

But at this point we must avoid our old enemy "the fallacy of composition". What appears as a cost of production to each and every small firm using a particular kind of land may, as we have seen, be to the whole community merely a derived, price-determined rent expense rather than a price-determining one. More than that, suppose the land is specialized and can be used only for the production of one industry. If a grade of land is inelastically supplied to one industry and has no place else to go, it will always work for whatever it can earn there; then its return will appear to every small firm as a cost like any other.

It turns out that relativity of viewpoint matters as well, because even though land is inelastic, to any one firm or industry the supply is elastic:

To conclude: Whether rent is or is not a price-determining cost depends on the viewpoint: that of a small firm, small industry, large and even exclusive-user industry, or whole economy. What is a price-determined rent return to a factor which is inelastic in supply to the whole community or dominant industry may, to each firm and to any small industry that is only one of many potential users, appear as a price-determining cost.

In normal circumstance land values accrue gradually, especially as communities build up permanent forms of infrastructure. Much of their success depends on the degree to which infrastructure of all kinds can be maintained. The better they become at the process, the more limited their access may in fact become, especially if the land contains special natural attributes.

Cost "containment" or management in defined equilibrium, would depend on many things. Even though land can be kept "affordable" by generating similarly accessible services, each part of the process depends on the other. And while such communities would generate economic activity which goes well beyond time based services, flexible infrastructure makes it reasonable to pursue short term economic strategies which need not require extensive monetary investment.

Since - in a defined equilibrium - much of the local economic value would reside in the time continuum, the best way to reflect this is to ensure that local ownership remains flexible and incremental. This way, local system infrastructure would not bear such high access costs that lower income levels become barred from participating in a knowledge based economy. Recently it has been difficult for those who struggle to invest in human capital or access highly productive regions, to contribute to productive agglomeration. Fortunately, this could be changed with a defined equilibrium which aligns implicit land rents with real wage potential.

GDP and the Reciprocal Volunteerism Factor

Volunteer activities are important for any community. Yet many take forms which make them impractical to designate as formal transactions that include monetary compensation as a part of GDP.

That said, there are important exceptions which might gain validation in the near future. From a wealth creation perspective, the greatest economic significance of social interchange is due to specific voluntary transactions between individuals which can be directly reciprocated. After all, these activities may contribute to the personal welfare of both participants, since both are included in the identity enhancement process of voluntary provision.

The most beneficial social exchange for economic purposes, consists of two participating sides in specific and timely transactions. By way of example: While the positive nature of "pay it forward" processes could be loosely considered a two sided voluntary exchange, its tendency in groups is infrequent in nature, while providers and recipients are not directly reciprocal. This helps explain as well another name for paying it forward: "random acts of kindness". Consequently, paying it forward may not occur frequently enough to strengthen trust or group cohesion. What's needed are regular and ongoing patterns of reciprocal volunteerism, for mutual assistance to become a replicative and spontaneous process.

Many who have felt powerless at some point in their lives, instinctively understand the value of mutually agreed upon negotiation for the supply and demand of time based services. Well designed platforms for services supply and demand, could help individuals go beyond efforts they might normally expend for their own families and friends. People especially need such patterns when they lack employment which encourages negotiation and social interchange in the workplace. Yet too much of this activity has been assigned to rigidly formal patterns in present day institutions. When specialists and professionals do most of the negotiating on behalf of the average individual, there are few remaining possibilities for voluntary reciprocity, or the identity reinforcing nature of mutual assistance which keeps us civil and humane.

What about forms of volunteerism which continue to function best informally - especially insofar as GDP is concerned? When we volunteer to help someone without a request on their part, we also (generally) don't expect them to reciprocate. While our assistance may still have positive results, random services supply without expectations on the part of recipients, can make it difficult to discern whether group social circumstance are positively evolving over time.

Also, domestic responsibilities in the home tend not to be the best candidates for the measure of GDP. Indeed, much of this activity revolves around personal preferences for spending time in one's own home environment. In other words, while work is certainly involved, it is generally of a much freer nature than most workplace norms, even to the extent of functioning as a form of positive experiential product. Fortunately, home for most individuals, at least during many stages of life, continues to be the main place where people actually have the most freedom to do as one wishes. The better part of home obligations today are choices, rather than absolute necessities.

Nevertheless: As more aspects of production continue to shift towards automation and technological support, societies will need to reconsider the relatively informal terms by which neighbors might provide voluntary services for one another. For that matter, the more that mutual assistance is spread among as many participants as possible, the less likely that anyone ends up taken for granted in such exchanges. It's easier for everyone concerned, when maintaining one's self respect is feasible in services exchange. Only recall that when individuals lack social norms re reciprocating for assistance, many will refuse to ask or accept - sometimes even if they are in dire need.

Another factor in terms of potential reciprocity, involves economic options such as guaranteed jobs or a basic income. Guaranteed jobs present problems in terms of external decision making as to what "needs" to be done, or what is "worthy" of being done. Without adequate input and negotiation on the part of all participants, guaranteed jobs miss the point. For instance, when external decision making determines the jobs provided, few are going to be willing to give up their own meaningful work, just so that others might have employment.

Likewise, some assume that a basic income could allow recipients to "do their own thing". Alas, while this approach could help in the short term for unexpected emergencies, long term it would be little more than an existential path to despair. Being expected to "do "one's own thing" indefinitely, is still social isolation, with little hope of returning to meaningful interaction with others. Indeed, the basic income approach would mean the least amount of group alignment among all possible economic options, in terms of local supply and demand for mutual assistance.

Granted, it would take considerable effort to decipher the supply and demand possibilities which individuals might seek to voluntarily provide one another. But once such processes are set into motion, the rewards could eventually prove worth the effort, for it would give individuals the chance to rediscover their natural inclinations for mutual exchange.

Is Targeting Productivity a Good Idea?

Would it be reasonable for the Bank of England to have a productivity target alongside its inflation target? Probably not. In response to a recent report which suggests a productivity growth target of 3% per annum, Frances Coppola offers explanations why attempting to target productivity in this matter could present problems:

This target is extremely challenging. A footnote in the report notes that labour productivity growth since 1950 has averaged 2.4%, and describes the proposed uplift of .06% above this average as a "small increase". Forgive me, but an increase of 25% in the rate of change is not by any stretch of the imagination "small". It's an absolute whopping hike, particularly when you take into account the fact that in the 1950s and 60s the labour force was much smaller due to lower immigration and female participation, and the UK was rebuilding after WWII. In a mature economy which is 80% services and which has nearly full employment of both men and women, that 3% target looks well-nigh impossible. 

There was also lack of clarity in the report, what aspects of productivity might actually be targeted, hence Coppola noted labour, capital, and multi-factor productivity as possibilities. What about capital, for instance?

The fact that the rate of return of capital has been falling for the best part of forty years could suggest that capital is not being deployed efficiently. 

However: Recall that as returns on capital have fallen, the services component of the economy has been rising, and has only recently stabilized at present levels in mature economies. Chances are the decades long shift in dominance between tradable and non tradable sector activity, holds considerable meaning for how capital potential translates into marketplace realities. After all, time based services in particular face not only natural scarcities but also artificially imposed scarcities, which further limits aggregate output for applied knowledge. Since much of today's capital investment is closely linked with human capital investment, non tradable sector output includes higher levels of professional income, rather than tradable sector profits which tend to be more widely dispersed among key staff, employees and shareholders.

There's probably little that central bankers can do directly, to encourage productivity gains. It's up to participants in the real economy to make this happen, and differences in organizational capacity will also be needed before significant productivity changes are likely for some non tradable sectors. In any event, central bankers aren't well positioned to positively impact present levels via productivity targets.

Alas, mature economies do need productivity gains in the near future, if living standards are to continue improving for future generations. But what can be done? Presently, a non linear approach might be necessary, which is another way of saying much of the low hanging fruit for productivity potential has already been picked, via more obvious linear means.

Any non linear approach would also benefit from a broader framing re general equilibrium dynamics. Toward this end, aggregate output potential can be considered through a total factor (or multi-factor) productivity lens. For instance, how much of today's time based product in non tradable sectors could be likened to a knowledge production factory?

Once we envision inputs and outputs on these terms, one problem quickly comes into focus. Unlike the direct alignments of tradable sector supply chains, many non tradable sector inputs which could translate into applied knowledge settings, are mostly haphazard and partial. Processes of learning in this regard, presently extend across a wide range of diverse institutions which are only indirectly linked to other institutions, if at all. Plus, it's difficult to discern what supply and demand for time based product might actually consist of, since much of the alignment is from individuals to multiple institutions, instead of individuals to individuals in group settings with a knowledge continuum.

Consequently, inputs which hold potential for use at most skill levels, greatly outnumber the outputs which are actually gleaned from the time based product of these supply chains. Imagine the problems this would create for the supply side chains of tradable sector activity, if only a mere fraction of their intermediate processes were useful to other parts of the supply chain!

Just as tradable sector activity has often combined many separate activities into long term knowledge continuum, an institution is needed which can perform a similar function for diverse high skill services in the present. Fortunately, it's possible to turn many aspects of formal education and human capital investment into input which could simultaneously function as output. Instead of attempting to target productivity in an effort to achieve long term growth gains, why not turn time value into an economic measure which provides greater focus for input, even as output is simultaneously increased. Time value as resource reciprocity could ultimately mean more productivity gains, than has been possible thus far with the input/output imbalance of today's high skill non tradable sectors.

Build New Realities That Reflect Where We Are

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

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

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

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

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

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

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

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

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

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

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

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

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

What Really Preserves the Labour Theory of Value?

Who still believes in the labour theory of value, rather than the more recent subjective version? Or, perhaps there's actually a more relevant consideration: How much personal belief in a labour theory of value manifests unconsciously, instead of at an ideological level? Chances are, unconscious attributions for labour value are a stronger contributor to economic outcomes than what is often debated. One might envision the general equilibrium result as power relationships in skills arbitrage, for that matter.

Indeed, underlying assumptions regarding labour value, greatly affect how high skill human capital has been conceptualized, especially since the workplace transitions of the twentieth century. Professional groups often rely on a non tradable sector structural framework which allows human capital inputs to take precedence over the aggregate outputs of time based product.

In this instance, it turns out that subjectivity cuts both ways. Consider how a subjective theory of value in terms of product, previously benefited from direct correlation with good deflation and recognizable gains in standards of living. It made sense to emphasize the subjective reality of product value regardless of labour contribution, when progress could be largely attributed to tradable sector productivity gains. But more recently, subjectivity has become associated with societal expectations as to what quality product represents. The consequent emphasis away from baseline utility, has muddied the waters for product subjectivity, especially for potential labour value contributions. Alas, quality time based product often includes excessive inputs at multiple institutional stages, before the product output intended for consumers actually takes place.

While my impressions re subjectivity dovetail somewhat with those of the Austrian school, many such discussions feel more relevant for historical periods of tradable sector dominace. Madson Pirie reflects on Carl Menger's many contributions to subjective value, and notes:

He founded what is now called the Austrian school. His crucial insight was to recognize that price is not based on what it costs to produce goods, as traditional economists had supposed, giving rise to the labour theory of value on which the edifice of Marxism is built, but on what the demand is for them.

He adds:

...value does not reside in the object, deriving from its input, but resides instead in the mind of the observer, representing his or her estimation of its worth. 

Even if arbitrary definitions for quality standards reduced the impact of good deflation for tradable product, at the very least many forms of tradable sector product provide standard utility which can be readily discerned. Alas this hasn't proven the case in non tradable sectors, where a reasonable baseline for product utility has long been abandoned in favor of requirements which - among other things - have muddied the waters of true productivity gains.

Given the subjectivity of economic outcomes, a better utility baseline is needed for non tradable sector product in general. A better definition of basic non tradable sector utility - especially for housing and time based product options - could clear some of the present fog as to how aggregate productivity, hence potential economic gains, might once again be measured with confidence.

Update on a Busy Writing Schedule

Regular readers have probably noticed I've not had much time for blogging recently. However it's mostly due to a good reason: I'm in the process of finalizing material, for the first book of a series which will also eventually become part of the blog sidebar. This past August, I'd begun settling into a schedule of wrapping up chapter material each month, before continuing to the next chapter. Of course as it turned out, the third chapter ran three weeks longer than expected - given my self imposed deadline! Hopefully that won't happen too often, so I'll still have time for blogging, and particularly so the initial part of this extended writing project will be complete (finally!) by summer's end of 2019.

There'll be eight chapters in the first book and they should be ready for their last edit (prior to this initial publication) by late spring. Once Time as Wealth is complete, I'll be able to set my sights on some pressing macroeconomic concerns which are the main focus for the second book. Afterward, the third book will describe a potential institution which - alongside for profit endeavour (physical building and infrastructure components) - would support a time/generational continuum for mutual employment and knowledge preservation. In particular, an institutional structure is needed which can address the widespread structural dilemma which is also a result of the Baumol effect. Meanwhile, here's a few highlights from Time as Wealth.

1) The Untapped Potential of Time Value
Many discussions re time as wealth, understandably focus on the reality of personal time scarcities in relation to institutions which already exist. But what if it were possible to position our economic time value within a context of institutional adaptation? Importantly, a marketplace for time value, would mean greater monetary equivalence for all time use potential. This approach would help compensate for the fact nominal wages may be slow to adjust upward, during historical periods of service sector dominance. Indeed: The tradable sector dominance of our recent past, was likely a greater contributor to relative income equality than is generally recognized. That relative loss in tradable sector output - hence relative wage loss - is a recipe for political fragility. Gains in aggregate time value could  help restore a rising standard of living, and bring a new dimension to productivity as well.

2) Imagine and Create the Markets We Want
How might a well defined marketplace for time value, actually benefit society? For one, there is a growing zero sum mentality in the political arena, which has been exacerbated by the exclusivity and polarization of today's non tradable sectors. By taking all time use potential into account, more inclusive and less polarized workplaces would eventually take shape. What makes greater inclusion feasible, is that mutual reciprocity creates wealth at the outset, instead of having to demand resource capacity from elsewhere. Reciprocal wealth building, means new economic options that go well beyond the skills exclusivity of many present day workplaces.

3) From Skills Arbitrage to Time Arbitrage
Is it possible to differentiate how we value the overall use of our time, from how we came to define the value of skills investments in 20th century workplaces? All too often, the commitments of our skills priorities have meant giving short shrift to other time priorities and responsibilities. In some respects, time arbitrage could prove a more flexible means of services coordination, than skills arbitrage. Time arbitrage could tap the use of knowledge in non rival ways which help to preserve the spread of knowledge throughout society. Not only could time arbitrage restore our capacity to manage the time necessary for personal commitments, it could allow local groups to coordinate a broader range of skill sets than is presently possible.

4) Autonomy, Personal Agency and Economic Freedom
Governments and private industry alike, have long been complicit in mutual agreements which reduce our economic freedoms. How can a society expect to preserve political freedom, without economic freedom? Nevertheless, the freedom to produce is not as prominent among supporters of free markets as one might expect. Much of the usurpation of knowledge production rights in particular, took place well before wealth came to be strongly associated with knowledge. Indeed, the dialogue of victimization likely emerged in part due to a lack of understanding, how production rights have slowly but surely been lost. Production rights are an important part of our potential happiness and satisfaction in life, in that they make autonomy and personal agency a viable option for society as a whole.

5) From Divisions of Labour to Mutual Time Priorities
Not only do we need to closely examine future possibilities for time management, we also need to take a broader perspective regarding the rationality of mutually held time commitments. While tradable sector activity continued to dominate, time management was often a secondary concern, given the obvious demands of these kinds of organizational activity. However, non tradable sector organization has not been near as efficient, or as complete in terms of production potential. Possibly the best way to think about regaining efficiency for time based services product, is to envision the process as one of mutual employment for mutually held time priorities.

6) A Place in the Sun for Students of Life
How did our personal enjoyment of experiential and practical knowledge, become so lost in the demands of formal education? If that weren't enough: Formalized education has made it exceedingly difficult for average citizens without college degrees, to participate in some of the most important issues of our times. It is said we need to vote if we want a good societal outcome. Nevertheless, there's little in the political area which actually addresses the most pressing issues of the day. And many vital issues - instead of being worked out at a societal level - are inexplicably "roped off" for educational papers and high level discussions. Let's create more meaningful roles which include economic context, for students of life with an avid interest in lifelong learning, yet little means by which to share that passion in productive ways with others.

7) Building a Continuum for Knowledge Preservation
Even though generational wisdom may appear irrelevant or outdated, there is hidden fragility in the systems of our times. Knowledge tends to utilized in ways which don't necessarily carry a reliable continuum or momentum. Important information may actually be lost at times, in part due to how its use is organizationally structured. How might societies reduce this risk? An important aspect of this conundrum, is a wall of separation between schools and workplaces which prevent students from taking active roles in the economic and civic lives of their communities. Even though social and economic mobility will always be important, more communities need the economic option of being able to play direct roles in the knowledge preservation and utilization processes they have supported for so long, via formal education.

8) An Overview for a New Institutional Role
A new institution is needed, which can productively respond to the fact that time value scales differently from other forms of value. Time based product is vitally important in multiple aspects of our lives, especially since it contains an experiential nature which cannot be replicated in any other way. Nevertheless, the only way to make time based product truly efficient, is to provide an economic dimension in which time can directly function in relation to itself. Knowledge and human value would be able to scale up in this arrangement, so as to compensate for the fact this system wouldn't directly capture full monetary representation. Participants would generate the monetary equivalence of real wage value, through their creation of service options which otherwise would not be possible.

There's another important aspect of monetary equivalence in this arrangement. Each participant would build lifetime ownership in both local building components and physical infrastructure, and have ownership options as well in the manufacture of these components which are sold globally. This active citizen shareholding position, would make it possible for central banks to indirectly represent the labour of these groups (which otherwise couldn't function as a liquid asset), via their share of ownership in the for profit role of the equilibrium corporation.

Associative Time Value as a Source of Continuity

Associative time value in the context of this post, refers to value in use functions which have naturally occurred in the past, particularly among groups which share similar identities and common interests. Some of these settings have fostered divisions of labour which hold cultural meaning, as well. Of course, much of this activity has been largely displaced by value in exchange functions - especially in developed nations.

Value in exchange activities provide considerable societal coordination and knowledge use continuity, but not to the extent one would expect. What's more, governments often aren't well situated to coordinate vital services - particularly those out of reach of lower income levels. Which is just one important reason why - ultimately - production rights for knowledge based services shouldn't be limited, as they are today.

Nevertheless, present day institutions are too siloed, to provide continuity in the form of value in use settings for the preservation of knowledge. Unfortunately, value in exchange activity lacks some of the "glue" which binds a civilization, if and when systematic burdens become pronounced. For one, extensive knowledge use now occurs in rival context, especially when it is directly aligned with the value of knowledge intensive time based product.

Today's schools are a prime example, of institutions which hold only limited associative group time value for lifelong continuity and knowledge preservation. Formal educational roles - in spite of their appearance of local community continuity, are mostly extended to those who are not yet adults. And while formal religion is one of the few remaining local institutions which still encourages multi generational participation, its value in use societal functions are by no means as extensive, as they were in the past.

It would be difficult to radically change the definition of formal schooling for the better, without a recognition of the need for lifelong knowledge use continuity, and the voluntary mutual assistance which makes it possible. Any learning institution worthy of the designation, needs to preserve spontaneous associative time value to the greatest degree possible. Without the continuity in knowledge preservation that spans generations, communities end up supporting young students time and again, only to watch them go elsewhere in search of horizons where economic prospects appear more promising.

Knowledge use exclusivity now contributes to losses in economic stability as well; since supposedly, only those with the "best" skills sets need apply for an increasing degree of economic participation. However, this "perfection" imperative could make our institutions more fragile, as it becomes difficult for ever more citizens to take part in their active support. We need new ways to tap the tremendous amount of wealth creating capacity, which largely exists in a medium skill range. After all, there's no logic in assuming that the bulk of future prosperity could - or should - derive from workplaces which utilize mostly extremes in skills use potential.

So long as individuals hold sufficient production rights, they have a real chance to contribute to societal continuity and economic stability in their own environments. Much of today's institutional fragility is due to the fact that governments and special interests alike have excessively benefited by reducing the production rights of the average individual. Hopefully, many of these lost production possibilities will ultimately be restored, so that average citizens will - once again - be able to resume their own unique roles in the continuity of knowledge preservation.

Employment vs Staked Claims on a "Material" World

Now that the Walmart effect is also "forcing prices down" in India, Tim Worstall reminds us how this process is ultimately for the good. However, in "The Benefit of Killing Jobs" he asks:

But who should we be supporting here? Clearly, our innate prejudices are in favor of the small operator, that struggling family business, as opposed to some monster of late stage capitalism. We could further believe that a thriving community of sturdy independents is more valuable to us than some mere reduction in the prices of diapers or milk. 

But that's not the point here, nor is it what makes us richer. Economics advance is about using less labor to do any one task. This is why we obsess over productivity. It's not so that we can gain more from the same amount of labor either. It's so that some labor is freed up to go and do something else, which is the important matter.

Nevertheless, too many of our productivity gains continue to break down, at the level of total factor productivity. As some individuals continue to lose jobs, others are increasingly tempted to enhance their income through the revenue gains of more recent productivity advances. Carried too far, it's a process which could eventually undermine our structural mechanisms for societal coordination.

When local jobs are lost, this often translates into diminishing local service capacity as well. Much of the obsessing over productivity accomplishes little, when price makers (many of whom function beyond the Solow growth model) reduce aggregate productivity gains which could have contributed to a higher standard of living. Chris Dillow also responds to Tim Worstall's article, and he sums up:

...technical progress and destroying jobs are not sufficient to achieve good economic growth, even where markets are functioning well.

While I agree with Dillow insofar as this sentiment is concerned, how does it relate to his broader perspective, re future employment potential? For example, in what context do we express concern about "losers", if the world has supposedly experienced "enough" material growth? Who still gets a "living" wage, if growth ceases in its tracks and other revenue has already been claimed? In his post, Dillow references Daniel Cohen, the recent author of "The Infinite Desire for Growth", where materialism is questioned in the Amazon review for the book:

a future less dependent on material gain might be considered and how, in a culture of competition, individual desires might be better attuned to the greater needs of society.

What exactly is being implied, by pining for a "less material world"? Who is actually getting a chance to compete for life's wants and needs? Indeed, all is not quite as it appears in this regard. Materialism, like so much present day conceptualization, suffers from a moralistic framing which makes it difficult to approach the issue rationally.

After all, many forms of valuable knowledge are also essentially being hoarded, so that citizens lack the ability to compete in terms of skills production and presentation. How is knowledge hoarding any different from material hoarding, especially if material hoarding proceeds are used to compensate knowledge hoarders? Individuals whose time value seems off the charts in relation to others, are still being compensated via the revenue potential of countless material things. One of the best examples I've come across, is the extreme volume of sales necessary in a hospital thrift store, before sufficient revenue is collected to pay for a mere fraction of human capital value in hospital procedures.

For that matter, material hoarding can be likened to the "lesser" challenges of our natural inclinations for personal arbitrage. Alas, much of what we bring home, can seem more valuable than the extent to which our time may be perceived by others. Yet when we are confident regarding our time value in the workplace, our discretionary time is more often spent in the pursuit of collecting the memories of experiential product. But what about those whose time value has been prejudged and deemed not necessary for 21st century intellectual challenges? Will we further suggest that their junk collecting challenges should be tossed as well, in a less material world?

Is it possible to be a little less hypocritical? When anyone demeans an "infinite" desire for growth, is this imaginary cap expected to extend to the growth possibilities of the human spirit? Why not promote a world that actually needs less materialism to pay its intellectual bills? And above all, let's not assume society should determine the nature of desire and the greater good of all concerned, on specific one size fits all terms. Instead of attempting to hand out consolation prizes to the excluded, find ways to include them, through value in use means. It's one thing to take advantage of a material world for one's own extensive value in exchange benefits, but altogether another, to assume that is the only kind of world that is feasible.

Sustainability Coexists With Wealth and Market Options

Why aren't economic options more widely discussed which could address ecological concerns and generate new wealth at the same time? For instance, dialogue re carbon taxation as a response to climate change, is problematic in that it would be yet another form of internal wealth redistribution. Is this as inventive a market approach as we can get? Still, there's no need to be as pessimistic as Ivan Ascher, who in a recent Project Syndicate article concludes:

Ecological devastation should be expensive, and the world no doubt needs workable strategies to move people away from dirty sources of energy toward greener, more sustainable alternatives. But to defer to markets to overcome the environmental woes of capitalism is a blueprint for disappointment - and a recipe for planetary suicide.

If - as Ascher believes - there's no market solution for climate change, what is realistically better? Why not build broad based market options that don't impose single solution sets on everyone? Indeed: How would we negotiate with one another to organize mutual priorities and obligations, if we didn't have market platforms by which to do so? Why do we act as though earth always has to be compromised by the process? Chances are, it's possible to create wealth which takes climate change into account, and do so without further redistribution of general equilibrium revenue.

Local community infrastructure design could provide market options, especially for those who value environment settings which aren't presently associated with today's ownership structures. One could imagine - for instance - a mutually tended wildflower meadow community which includes an interesting variety of knowledge based challenges as well. For anyone who switched up home ownership patterns over the course of their lives just to see what different arrangements felt like, these market options would make sense.

Just like the challenges of intellectual endeavour, environmental design is a form of experiential product which could integrate time value commitments (arbitrage) as a "cost of local living" component. This approach would provide a wide spectrum of market based options for multiple income levels and lifestyle choices. A few years ago one often heard "there's an app for that". Wouldn't it be nice to hear, "there's a community market setting for that."

Fossil fuel is likely to remain a highly valued transportation option in the near future, especially since it would allow individuals to pursue solitary adventures at long distances which lie well beyond the commuting patterns now envisioned by purveyors of automated transportation. Hence most walkable community options would seek traditional transportation at the periphery, even as they include central core designs that allow groups to coordinate weekday work activity within walkable distances. To imagine how a 21st century society may want to envision transportation priorities (other than electric and/or automated), note four basic sets of transportation preferences:

1) Weekday walking for daily and ongoing activities with others.
2) Weekend (or vacation) walking possibilities for experiential activity.
3) "Traditional" fossil fuel means for daily commuting needs.
4) Fossil fuel means for the transportation of weekends and other exploration.

Much of today's dialogue remains centered around the third transportation option. A recent post from Scott Sumner is a good example, especially since he stresses the importance of expanding equilibrium potential wherever possible.

Since the first two categories are only partially addressed in the present, the equilibrium corporation would give them priority in potential infrastructure design. While the first set of activities is designed at the core (with special emphasis to include children, elderly and disabled), the second and fourth considerations would be placed in a broader set of networked design perspectives. One example could be networks of natural corridors that could extend between community locations at long distances. Corridors such as these would make it possible to walk (or bicycle, for instance) from one community to the next, either on weekend trips or possibly longer stretches of time.

One way to think about these possibilities is the fact that setting aside land for private aspects of shared preservation, recreates travel and local communities as desirable forms of experiential product. While "solid" buildings have been at the center of infrastructure focus for as long as anyone can remember, a 21st century network would highlight flexible building components as supportive of individual and group activity. Already we have begun this virtual process with digital means. By creating ways that people can pay for experiential product with time commitments, it becomes possible to bring variations on public good ideas into a private marketplace - one which makes it feasible to sustain miniature versions of enjoyable and desirable environments, through shared and incremental ownership.

Can AI Reduce the Burden of Human Capital Investment?

Prior to the deep learning which is increasingly associated with AI, the progression of knowledge required ever more personal time commitments (in aggregate) on our part. Granted, AI has its own costs, as it would require extensive electrical capacity in the future. Even so, electrical resources could supplant extensive time requirements for high skill credentialing, for a mere fraction of today's human capital investment costs. Of course, the working terms of potential substitution are presently far from clear, even as pleadings for human-centric knowledge application are already underway.

However, there's an important aspect of this development which has yet to be taken into account. Only recall that (in part) due to human capital investment requirements, societies began to categorize skills use and labour divisions into ever hardening class structures. For that matter, lower income levels are increasingly being discouraged, from taking on the "necessary" human capital investment requirements of today's premier workplaces. The fact many workplaces are no longer capable of compensating formal educational costs, even as taxpayers remain on the hook for doing so, doubtless contributes to this gloomy dialogue as well.

The good news is that due to the low operational costs of AI deep learning, decades of human capital investment for high skill knowledge application are becoming less necessary. In other words: We no longer have suitable rationale to insist that strict divisions of knowledge based "labour" are "necessary" due to personal differences in income and resource capacity. The not so good news, however, is that societies may elect to not take advantage of AI's ability to reduce present day burdens of human capital investment - thereby keeping unnecessary class divisions in place. Should society choose the "not so good" option, the production and consumption of many important time based services, could eventually devolve mostly to higher income levels. As a productivity issue, one might frame such a choice as preserving excess inputs in relation to time based services outputs, so to preserve the "dignity" of our elite.

Yet AI could restore hope and economic progress, via its immense capacity to contribute to deep learning. By working with AI instead of in spite of it, most of us would become able to make knowledge and skill count in the immediate contexts of our daily lives. One benefit of working with knowledge on an "as needed" basis, is that this organizational process encourages the moderate skill levels so many individuals possess. Further, moderate skill levels are particularly well suited for the interdisciplinary approaches now required for problem solving. Options such as these are particularly important, as the half-life of knowledge can sometimes impact what we learn via traditional or formal educational settings. As Shane Parrish recently noted:

As a body of knowledge doubles so does the cost of wrapping your head around what we already know. This cost is the burden of knowledge. To be the best today in a general field requires that you know more than the person who was the best only 20 years ago.

Imagine being able to apply much needed knowledge and skill for a wide range of economic activity, in a fraction of the time presently required. In "Whiplash: How to Survive Our Faster Future" by Joi Ito and Jeff Howe, the authors describe their own extensive experimental efforts for learning processes. In the chapter "Practice over Theory" they write:

Putting practice over theory means recognizing that in a faster future, in which change has become a new constant, there is often a higher cost to waiting and planning than there is to doing, and then improvising. In the good, old, slow days planning - of almost any endeavor, but certainly one that required capital investment - was an essential step in avoiding a failure that might bring on financial woe and social stigma. In the network era however, well-led companies have embraced, even encouraged failure. Now, launching anything from a new line of shoes to your own consulting practice has dropped dramatically in price, and businesses commonly regard "failure" as a bargain-priced learning opportunity.

In time arbitrage, where learning would be integrated with workplaces as a time continuum, AI could assist individuals and groups in knowledge coordination processes, instead of replacing human capital components just because it seems "expedient" to do so. Should we give ourselves permission to fully participate in knowledge use, AI could also be given permission to relieve the burdens of human capital investment. The result might just be a new frontier, in which we can scarcely imagine the possibilities.

The Economic Potential of Time Value

Could one's time preferences assume the value in use functions that apply for commodities, in contrast with concentrated forms of value of exchange that contribute to final product? Skills arbitrage - along with its extensive human capital investment requirements and risks for instance - belong to the latter category. This, even though the institutional application of high skill arbitrage is sometimes described as intangible product.

Only recall how resource based commodities serve as a beginning point for all kinds of production cycles. By way of example, recent tariff issues for steel and aluminum remind us how commodity designations affect a wide range of ultimate production possibilities. Time arbitrage as a formal economic commodity, would allow personal time value to be envisioned as a resource which serves as an integral beginning point for other components of economic exchange. Such a conceptualization is all the more important, so that personal time options might form a reliable framework for the production cycles of knowledge based product in the 21st century.

How could time value as a formally defined economic commodity, contribute to societal gains? Among other benefits, it would provide opportunities for all participants in learning processes to generate measurable value in use, via their own personal participation. Most individuals would be able to take part in knowledge focused marketplaces and workplaces from a young age, thereby reducing the high risks and long wait periods for human capital investments to pay off as value in exchange.

Consider how basic commodities provide essential value in use functions, which greatly contrast with what high skill products and services are often designed to provide. Nevertheless, human capital investment intended to sell skills as value in exchange, now has a smaller window of opportunity in the workplace, than was the case in the twentieth century. One always invests in human capital with a certain degree of risk, given the evolving institutional needs for skills arbitrage in many workplaces.

One reason it's important to have time arbitrage as a basic commodity option: Rural areas particularly rely on commodity production for wealth creation, rather than the value in exchange which prosperous regions contribute to value added goods and services. Nevertheless, the technological gains of the 20th century meant fewer employment options for basic commodity production in rural areas. Meanwhile, it is only becoming more difficult for governments to redistribute wealth from other sources to rural areas, hence the latter need new options to create new wealth via their own means. Local services generation - via the basic commodity role of time arbitrage - should be an obvious choice.

Skills arbitrage - desirable though it is - remains mostly available to individuals who live in prosperous regions, since these forms of economic complexity are generally required before local institutions can fully compensate extensive human capital investment. Today's educational institutions in rural areas contribute to this problem, for they mostly prepare motivated students to relocate to more prosperous regions, rather than provide vital skills locally after high school graduation. If time value were designated on formal terms as a useful and basic commodity, rural citizens could finally engage in ongoing education which also enriches the lives of neighbors in their own communities.

Even though meritocratic skills arbitrage became the preferred goal of human capital investment, its potential for widespread use in the 21st century is diminishing, especially as present day corporations revert to an organizational core which minimizes full time employment. By structuring more time use as a basic commodity, it would be feasible to restore the level of employment that most individuals desire. And from here, it would finally be possible for all concerned to seek out new cultural frameworks, in terms of freely shared responsibility.

Humanities Could Become a Less Risky Investment

Why do humanities studies get such a bad rap as a formal educational goal? After all, humanities studies contain vast representations of what is rightly considered the progress of civilization. However, the fact more individuals seek work in these areas than is actually available, generates plenty of skepticism re present system costs for this form of human capital investment.

How did the pursuit of a wide array of intellectual challenges, became so misaligned with our economic realities? It wasn't always this way. During the centuries when tradable sector activities were the dominant employment opportunities, humanities students - especially in developed nations - could generally find work in areas not related to their studies. For a long time, one could often reconcile their natural tendencies with the kinds of work that were actually on offer.

For instance, my father's bachelor's degree in English (after WWII), which meant far more to him personally than to the marketplace, didn't reduce the practicality of the carpenter's skills he employed in petroleum refining, afterward. Today, however, human capital investment in humanities is far more chancy, especially since most corporations rely on more specific skills than what my father utilized. As much as I wanted to complete a bachelor's degree in music: After the problematic logistics of an hours long campus commute, and a series of financial setbacks, I finally realized degree completion would have meant more to me personally, than what the less signal driven marketplace of the seventies actually required.

Can humanities studies be salvaged as a form of valid human capital investment? These studies not only represent civilizational progress, they impart valued qualities to the (human capital) production and consumption of societal discourse. However, if humanities studies are to be preserved and actively maintained during periods of economic stagnation, they'll need viable economic platforms which address the risks of human capital investment, while simultaneously preserving the tremendous value of personal intellectual challenges. In a chapter on investment in Basic Economics (Fifth Edition) Thomas Sowell writes:

If the return on investment is not enough to make it worthwhile, fewer people will make that particular investment in the future, and future consumers will therefore be denied the use of the goods and services that would otherwise have been produced. No one is under any obligation to make all investments pay off, and to what extent is determined by how many consumers value the benefits of other people's investments, and to what extent.

We are particularly concerned about humanities as a more viable form of human capital, of which Sowell notes:

While human capital can take many forms, there is a tendency of some to equate it with formal education. However, not only may many other valuable forms of human capital be overlooked this way, the value of formal schooling may be exaggerated and its counterproductive consequences not understood...From an economic standpoint, some education has no value and some can even have a negative value.

Yikes. Let's briefly consider why humanities studies nonetheless contributed to broad employment opportunities for decades, in the U.S. After WWII, most regions were experiencing productive economic gains via the widespread dispersal of tradable sector activity. Consequently (until more recently), standards of living rose all across the country. Another aspect of humanities studies as a strong secondary (revenue dependent) marketplace, was the nature of a financial system which worked as a reliable transmission mechanism from points of wealth origin, to the active circulation of strong service sector activity.

Of course, today these circumstance are changing, especially as monetary transmission is becoming more closely aligned with other vital aspects of the economy. Again, it helps to reflect on what's at stake. We know that we assign real value to both humanities production and consumption. What might be done about the fact humanities studies as human capital investment, lack viable economic value?

It's possible to assign formal economic value, to a broader dispersal of informal learning processes. Fortunately, many communities could make the production of humanities a more integral part of their economic activity, via the direct wealth creating processes of time arbitrage. Formal means of mutual engagement in these activities, would generate mutually shared costs which don't pose high risks for the personal time and resources involved. Time arbitrage would provide means to connect humanities studies to wealth creation, thereby greatly reducing the costs of human capital investment.

The direct services input to output relationship of time arbitrage, could transform personal commitments to humanities studies. Like minded individuals would take part in endeavour which - while also experiential in nature - has the imminently pragmatic component of natural personal inclination. Commodification of time, via measured time units, would create a value in use function for human discourse which can be readily distinguished from the uncertainties of humanities value in exchange, given the latter's inevitable "inequality" of globally aligned compensation.

Educationally oriented time units as mutually compensated activity, could greatly reduce the risks involved in a diverse range of human capital investment. Thankfully, it's not necessary to diminish human capital as a formal investment option. By realigning skills acquisition to wealth creation patterns, our time value could ultimately assume a central role, in the organizational processes of knowledge use.

Economic Time Value as a Unique Equilibrium

Often I've struggled to clarify, how a marketplace for time value could function. One reason this market potential isn't immediately obvious, is that the time arbitrage involved, would function as a unique equilibrium. Time value would be utilized in relation to itself, thereby allowing individual and group expression of economic values that exist in relation to local resource capacity.

The groups which take part in this endeavour, would generate new means for time based services in defined local settings, across a broad spectrum of coordinated skills capacity. Expressed time priorities (time arbitrage) in these communities would function differently, from how labour (particularly specific skills) is compensated in the "normal circumstance" of general equilibrium. Further, ownership responsibility and benefits would be linked to all participants, in mobile systems of building components, land use groupings, and flexible physical infrastructure.

Another problem I sometimes encounter, is discussion re what could be in an economic context, when it isn't quite clear what already is, by contrast. Even though today's services based economy represents close to 80% of U.S. economic activity, the theoretical structure of this activity is far from concise, as contrast with the much easier to measure "goods" economy, that prevailed till the latter part of the 20th century.

While production gains can still be discerned in tradable sector activity, the murky relationships of today's dominant services capacity, are far less tangible. For that matter, the theoretical nature of services organizational capacity, has yet to be differentiated from the still relevant neoclassical framing, of global tradable sector activity.

Consequently, I've argued for production clarification (tangible definition) in services which might also prove useful for economic modeling. Even though simpler methods of knowledge use would hardly be "perfect" "substitutes for skills specialization, such methods could still provide more reliable progress indicators over time, than what today's arbitrarily limited services capacity can provide. Even better, an organizational knowledge use structure which - via time units - generates new wealth at the outset, could finally relieve the long term budgetary burdens now faced in the U.S.

In all of my attempts to describe my framework, I realize my own economic "shorthand" phrasing and theoretical suggestions, fall short of what is actually needed. Hence I will continue my efforts to conceptualize from as many angles as possible, for the sake of greater clarity. After all, many observers frame economic concepts somewhat differently, depending on their own roles for economic participation.

This discussion of defined equilibrium considerations wouldn't be complete, without mentioning some normative aspects of economic freedom. When economic freedom is mostly envisioned as freedom from the actions of others, the actions of the strong over the weak mostly give free markets a bad name. Worse, a "do nothing" approach, has encouraged regulations which ultimately undermine remaining economic freedoms for all concerned.

Given the extent of economic freedoms we have already lost, might intentional economic design make it possible to begin reversing those losses? While some remain certain that "The road to Hell is paved with good intentions", I would respond that good intentions are often necessary to preserve the most economic freedom, for the greatest number possible. Fortunately, time as an economic unit, could provide apt means to preserve personal leverage for the supply and demand of services which individuals mutually prefer in the same settings.

Again, it has been difficult to express the idea of personal economic time value, due in part to a lack of clarification in the time value that people find most important in general equilibrium conditions - let alone the defined equilibrium conditions which I have described. Since too much of our potential time value ends up excluded in today's services dominant economy, our time commitments are no longer well aligned, with the environments we have built via the relationships between money and other forms of resource capacity. What's more, our personal skills race with technology continues, because we still lack the means by which to provide economic value for what we experience with others, through the shared mechanism of actual time and place.

Should we gain the ability to pursue the freedom of mutual employment, it would also allow us to relax our grip up on a skills race with technology that can't be realistically won. Yet no one need fear displacement by automation, if they are willing to explore a completely new marketplace which makes it possible to think differently about services supply and demand. A marketplace for time value, could help to restore faith in the value of economic freedom, and it would give individuals the chance to pursue mutual challenges and aspirations on more personal terms.

Time Value: Reskilling, or Perhaps Reorientation?

Should we focus entirely on reskilling for our (hopeful) inclusion in future workplaces? After all, reskilling implies shedding for good, previous skills investments on our part which are supposedly outdated. Yet many of us have committed extensive resources over the course of a lifetime, for the costs of economic access, with limited results. While lost skills value on our part is sometimes true, perhaps it would be worth our while, to examine more closely, whether the "broken value" of our skills capacity is not always so.

I've questioned "useless" skills consensus, in part because much of what we learn and experience, also provides value for others in contexts beyond our present day workplaces. These informal contexts deserve more of our attention than they've received, thus far. Indeed, I found reason to question the rationale of "useless skill" in the early nineties. Upon losing a valued job, I was told certain work opportunities were "disappearing" and I should consider a career change, yet younger individuals were still being hired in a position I'd recently paid more than a thousand dollars to acquire. While the rationale for that lost job opportunity (automation) could have been understandable, how to explain the fact that individuals younger than myself, were still preparing for essentially the same work?

Granted, these new hires were coming in with more (skill specific) formal education, than what was necessary when I entered office work. Even now, many office responsibilities are still secretarial in nature, but full time secretarial work with benefits is mostly reserved for those with college degrees. That long ago job loss was frustrating, since secretarial work was strongly recommended by my family (and a few bosses as well) for those such as myself who didn't complete college. Fifteen years after my first office work, when so many baby boomers were let go, it was easier for many of us who lost the opportunity cost gamble, to simply restart in a new direction, rather than prolong the frustration by suing for discrimination when our jobs went to younger workers.

As it turned out, the secretarial job loss would not be the only lost investment in economic access. Plus, later investment losses for self employment ventures were much higher. Life experiences such as these, make me question the idea of reskilling as capable of solving future employment needs for all concerned. In particular: When our institutions no longer need the workforce capacity that was once necessary, it's time to reconsider how our mutual commitments with one another, might safely take place well into the future.

Present day firms will continue to discriminate from pools of potential job applicants, simply because it is so easy to do so. There's a lot more of us looking for meaningful economic engagement, than society is presently organized to accommodate. Worse, this circumstance has created false impressions that vast numbers of us aren't "up to speed" or "good enough", for something as incredibly basic in life as economic participation.

Meanwhile, others keep telling the marginalized how we are making the "wrong" human capital investment choices, even as policy makers cross their fingers and insist all citizens will somehow be able to adapt, to today's increasingly concentrated institutional needs. From a recent report by the World Economic Forum:

Economic value creation is increasingly based on the use of ever higher levels of specialized skills and knowledge, creating unprecedented new opportunities for some while threatening to leave behind a significant share of the workforce. In a recent survey of OECD countries, more than one in four adults report a mismatch between their current skills sets and the qualifications required to do their jobs.

One in four? What does the high institutional mismatch suggest, about the ways we are currently going about all this? The report continues:

Even among people formerly working good jobs, disrupting technological and socio-economic forces threaten to swiftly outdate the shelf life of people's skill sets.

At the very least, we observe a wide range of multiple skill sets in our personal lives which we highly value - from the practical to the experiential. But we have inexplicably lost the social and economic context by which we could make them valid, on terms that could be mutually honored. Perhaps all of this is less a matter of reskilling, and more a matter of desperately needed reorientation.

Some economists now argue that if fewer of us go to college, businesses may once again become willing to hire folks without college degrees. If only this were true, but it scarcely seems likely for firms which still offer full time employment with benefits. And this is the kind of work which presently allows people to take responsibility for their lives. Even though the exhaustive costs of reskilling pay off in some instances, many can't reasonably afford to place their bets on this approach. Chances are, the status quo workplace of the near future is only going to need a mere fraction of today's humanity. The rest us would do well, to reorient how we approach mutual employment and economic engagement.

Educational Supply Chains: A Decentralized Role for AI

First, consider the potential for learning processes as self supporting supply chains, which in turn allow educational investments to directly disperse wealth and knowledge. Why education as a supply chain for growth? Since today's institutions mostly "random mine" skills and knowledge, the benefits of human capital are somewhat lacking in growth statistics. In "The Importance of Education and Skill Development for Economic Growth in the Information Era", Charles Hulten argues that the BLS assigns a "relatively small role to education", which he (understandably) believes is insufficient. How might we create a better organizational platform for human capital, in which education becomes a stronger component of economic dynamism?

Presently, as institutions randomly mine the investments of human capital, many aspects of knowledge use have to "wait in line" for tradable sector wealth origin - even to the extent that advanced economy workers "wait" for resource origin flows from emerging economies. Granted, these original wealth sources are supplemented via the monetary flows of physical assets (housing) and a wide array of debt backed instruments. Nevertheless, too much non tradable sector activity remains on the negative side of the ledger, in terms of a general equilibrium growth base. Possibly the non tradable sector activity of new housing (not its loan activity), is the major non tradable sector contributor, to the positive side of the wealth creation ledger.

Meanwhile, too much educational investment in general, has come up short in terms of providing directly to economic dynamism. Another way to think about this: When labour and human capital serve primarily as residuals (for both primary and secondary market activity), the potential for a knowledge continuum is broken or at least disrupted, at numerous junctures. Is it possible to provide stronger connection points - even a recognizable supply side chain - for knowledge use in general?

One way to approach this problem, is via the use of coordinated time arbitrage in knowledge use systems. Time arbitrage as a single price commodity unit, would allow individuals and groups to immediately cancel time debt, as it occurs in daily activity. Individuals would also be able to "buy" time insurance from others in the event they can't work, via voluntary service hours. This approach would allow purposeful matched time (and its accompanying knowledge use) to function as an ongoing continuum. Personal time value, along with skill and knowledge, would function as a supply chain model, making human capital a central component of growth and wealth creation.

Among the reasons people fear artificial intelligence, is the fact that human capital - despite its importance -  is still organizationally structured as a production residual. Whenever individuals need to specify their time as containing higher monetarily value than that of others, their time use becomes dependent on general equilibrium system flows. In other words, the costs of skills differentiation will frequently remove any first mover position for knowledge use we might hold, since one must enter their knowledge and skill into organizational processes which are also aligned to "wait" for the total compensation of the system.

So long as an excessive amount of labour remains in either secondary markets or residual production positioning, even professional groups end up in defensive positions, arguing for humans to remain "embedded in the loop". Calls for continued management via human judgement, have a more emotional element than the technical maintenance which AI will (more naturally) require, in the form of human assistance. In all of this: Since human capital is still organized as peripheral or "as needed", high and low skill levels are becoming default positions - even though average skill is more representative of human populations in general. Consequently, average intelligence would likely be an important characteristic, for the time based and educational supply chains of the future.

It is the central role of our time in knowledge based supply chains, that makes it possible for deep learning AI to assist us - meaning not inevitably the other way around. How so? For instance: One of the primary advantages of time based services in desirable regions, has been their ability to replicate specific and desirable skill sets - think brain surgery as an example. The deep learning of AI makes it possible to disperse specific skill replication functions as well, so that many skills sets can eventually be applied in environments which otherwise may lack "cutting edge" human skills capacity.

Decentralized services generation would mean an altogether different approach for deep learning AI is possible: One that includes helping locals assist one another with important service functions, especially during their primary educational years. It's the wealth generating capacity of equal time coordination, which allows these groups to make their dependency break with general equilibrium monetary flows for time use. By decentralizing service capacity, each group can build a continuum for progress which holds a reasonable chance of permanence, insofar as time use functions are recorded and preserved.

In knowledge use systems, humans would often seek the assistance of deep learning AI. However, this approach accentuates personal autonomy, and is quite different from that of human assistance for technology as part of a centralized system. Time arbitrage can allow for greater dispersal of knowledge use. It's the use of knowledge - not just its acquisition as investment - which drives economic dynamism and moves society forward.

When human capital functions primarily as a production residual, there's good reason to be concerned about educational investment roles, once general equilibrium capacity becomes constrained. Yet it is precisely the ability to build time based local wealth, which could allow human capital to fully function as a central part of knowledge based processes. When purposeful time serves as an economic core, deep learning AI - important though it is - would often provide a supportive role for the experiential product that people wish to share on more personal terms.

Work: What Compels Us, Beyond Money?

Even though the modern workplace encouraged us to focus on specific skills sets, these "special" skills that we've sold to our institutions, comprise a mere portion, of an ongoing repertoire of personal routines and work functions. Our regular productive habits often include a lifetime of learning, challenge and inspiration, even if not in a formal capacity.

Now that automation could substitute for a wide range of industry specific skills capacity (in aggregate), can we place more of our personal abilities on sound economic footing? How might we integrate more of our natural inclinations, into economic settings in general? In short: Should we highlight the importance of production and consumption for our mutual time preferences, what would compel us to to make the most of our aspirations, beyond money?

Our desire to be useful or relevant to others, manifests in countless ways. Even one's efforts to find happiness are important for economic outcomes, as Tim Worstall recently noted in a post re bookstore owners. Retail in particular, was a good twentieth century example of our desire to create environments which were also meaningful for others. Even though it is not always recognized as such, the desire to create enticing retail settings, is similar to other creative impulses - be they simple as a tantalizing dinner for a crowd, or as complex as a classical music composition.

Part of today's confusion - especially as retail goes digital - is that it's no longer simple to determine what kinds of physical workplaces and marketplaces have sufficient appeal. What local environment settings would prove worthy of our mutual time and investment? At some point, it becomes necessary to recreate better means of economic interaction, which allow us to once again be comfortable with one another, face to face. I sometimes imagine the popularity of emojis as a temporary digital interlude, so that we might at least remember facial expressions till we gain better means by which to share our destinies with each other.

So long as we remain reasonably strong, and our health good, many of us do everything in our power to continue working with others, particularly to avoid social isolation. Of all the setbacks that can occur in life, isolation tops the list. Yet many individuals end up essentially alone, as too specific skills delineation takes precedence over personal time value. Despite the importance of our limited and exclusive professional roles, we need more inclusive economic means, so that an ever increasing portion of humanity will not ultimately be left on the sidelines.

We could achieve greater economic inclusion, by allowing knowledge to function as a simpler byproduct of our daily economic routines. While there will always be a place for professional knowledge use, these societal roles need not blind us to what could also be accomplished, in regions which presently lack economic complexity. After all, we now have the digital realm to assist with our education, which would readily be enhanced by the active corroboration of our own peers.

Of course these are just a few examples of the work we naturally seek out, according to our own inclinations. Another incentive is honour, and equally important is the enjoyment that comes with utilizing intelligence for personal challenges and problem solving. All of which serve as reminders that no matter how well a robot might be able to do a job, robots won't - at least any time soon - have the mental capacity to enjoy work, as humans can. Why not take advantage of that fact?