the intentional marketplace

Wednesday, June 11, 2014

Midweek Market Monetarist Links and Summaries - 6/11/14

Tuesday, June 10, 2014

Economies of Scale: How Important are Aggregate Effects?

Lately I've been mulling over this issue, especially after some discussion with Bonnie Carr in comments, in a recent post which touched on scale effects. To be sure, centralization and decentralization play roles in how people and institutions adapt over time. Economies of scale can't help but affect both income distribution and business formation - which have gradually moved in the "wrong" directions so to speak. Is something being missed, regarding that correlation?

Think about the gradual decline in business formation in the U.S., and the great need for supply side measures to address this problem. How might local economies consider scale adaptations, should they consider decentralization measures to allow greater inclusion? How might national government think about changing needs in economies of scale? Before support for new directions can be offered, scale needs to be considered in multiple, integrated scenarios. Variance in income levels, population densities and lifestyle choice also matter. One can't just arbitrarily place given lifestyle or business formations in certain environments and expect them to work out every time.

Some recent pushback in business formation (i.e. Uber, Lyft, Airbnb, and food trucks), involves scale asymmetry which does not "match" the established local equilibrium, given the sunk costs already present. However, much of the existing equilibrium now entails heavy financial commitments for business or skills formation - much of which wasn't necessary a few decades earlier. Thus, some who seek access (through employment or self employment) by operating in a lighter financial context, actually pose a threat to those commitments.

Is creative destruction even possible in such environments, or does it need to migrate to different areas altogether, so as not to disrupt the existing equilibrium? Regular readers know that I suggest creating business opportunities, in environments where low cost start ups (alongside ongoing local projects) would not present these problems. It may be a while, before some recent start ups find acceptance in the communities of their choice. Whether or not room is created for disruptive start ups, will determine how the realities of the near future may play out.

At the very least, a "high expectations" equilibrium appears to have strong correlation with income differences and lower levels of business formation. I'm old enough to remember when not only were income differences less pronounced, but people from all walks of life had businesses of their own. While plenty of self employment and business start ups still happen, a lot more careful planning is involved and the "falls" can be more difficult to endure. Even basic level work seems oddly out of reach, at times. I never would have expected to see office work - once easily learned on the job - as required college courses before someone even lands a job.

Perhaps the recent inequality debate is heating up, because everyone has (seemingly) thrown up their hands regarding what might be done on the supply side of things. What on earth do arguments such as these have to do with government assistance and tax incentives, anyway? Supply side realities come down to how people actually interact with one another in the marketplace. One recent pro-growth agenda even suggests expanding the child tax credit. (???) The best incentive I know for increased family formation is honest to goodness economic access. There are already plenty of would be parents, who are searching for the work that will make having a family possible.

Thus, Main Street remains stymied with the burden of its expectations, apparently etched in stone. Along with government and related finance interests, too many Main Streets now envision a low growth future. But to me, talk of a low growth future is nothing more than a crisis of imagination - a "crisis" which could still be overcome. Part of the problem is that both public and private concerns believe that everyone needs to live in the same ways, in spite of income differences.

Sometimes income levels need to scale differently in order to gain economic access. Just the same, these different groups also need to be a part of the conversation before anything positive can happen. Otherwise, it's impossible for anyone to know, how those with lighter budgets might choose to respond, to the challenges of their own economic destiny.

Monday, June 9, 2014

Where is the Rationale for Equal Time Use?

Doesn't matched time "cancel out"? What's the gain in that? Perhaps in the same sense that a loan would cancel out - except in this instance, for newly generated service and knowledge use formation. Thus the consent of two parties for one measurable unit, would allow new wealth in the same way. Because this is a direct formation, it also exists in a monetary - rather than fiscal - capacity.

Without measurable equal time use, most services of the future would remain available primarily through forms of wealth shifting, with all the uncertainties that presents. Therein lies the issue with unequal time use, in that it requires wealth from elsewhere to function, instead of being capable of generating wealth on its own. That is - by its very nature - asymmetrical skills compensation is forced to rely on previously existing wealth, in order to have a possibility of materializing.

Truth be known, attempting clarity on this subject occasionally overwhelms me, for I know that equal time use is an odd concept in any economic sense. There are multiple reasons why I believe in the potential of equal time use, and often I scarcely know where to start. Plus, I find myself explaining what I perceive to be benefits, in "after the fact" scenarios. That is, I've already made the mental "leap" as to how economies could gain from a new form of social commitment. Hopefully this post might help to clear up some lingering confusions.

In a sense, today's lack of growth in developed nations, stems from the tremendous amount of efficiency which has already been achieved. Production efficiency has already begun to replace much of the work which once needed to do done. But in the process, work as knowledge and skills product also became important - particularly that which was capable of expressing cultural factors and which assisted in communication and negotiation.

Clearly, no one ever lost the need for better rapport with others - something no form of automation is going to provide. These are the activities which now need direct representation and applied efforts, in order to renew growth in developed nations. Equal time use capacity could assist in this process. Plus, it would be capable of directly generating much needed services wealth.

Equal time use concepts can be difficult for the casual observer to contemplate. For one thing, these are not barter structures - not even close. Unlike the occasional skills "fill ins" of barter, knowledge use systems could potentially generate economic activity which has otherwise broken down, never quite sufficed or in some other manner become problematic. Through the spreading, horizontal flows of equal time use, individuals would once again be able to pursue shared concerns in measurable ways. In the process, new forms of investment and asset structures would also arise - particularly at local levels.

The idea of voluntarily matched time as amenable to a compensated monetary base, takes some getting used to. Until now, no one really needed to generate community wide, logistically shared activity in space and time, in order to get things done. This function had been carried out reasonably well by many separate institutions. What's more, in many thriving areas, it is still capable of doing so. However - where economies of scale have pushed the margins beyond the reach of reliable small business formation - some areas can no longer keep up in a mature economy.

What's more, governments have botched the idea of a simple low income lifestyle completely beyond recognition, in order to augment their own needs. First, communities can step back from the "greed means more for everyone" mindset, to find what people want and need most as baseline starting points. Domestic summits could take it from there.

However, it's not possible to do this, if everyday consumption needs are not well aligned with time use realities. What is in greater abundance in any particular circumstance - aggregate time potential or other resources, instead? It depends. Even where knowledge use systems would mean living with less in resource based terms, they do not have to mean living with less in terms of services based time. Matched time use would bring a wide range of services potential to groups which otherwise would not be able to take part.

At first glance, equal time use might sound suspiciously like equal incomes, in that the monetary base for matched time use doesn't vary according to skill level. But what is offered is equality of opportunity for time use participation - not equality of outcome which isn't possible or desirable for that matter. The time use base is where local investment options would be generated, for those who are motivated to take part. Applied logistics would eventually make it possible for individuals to find the time use matches they desire - even in relatively low population densities. This would be a tremendous boost in that rural areas would become less dependent on municipal centers. That means they would become less dependent on government subsidies as well.

In other words, economic access is key. Everything depends on the support that community members are able to extend to one anther, for renewed economic activity and continued services evolution. This would be a social agreement which goes beyond the specific mission or the latest project. It would be a commitment for long term growth and economic stability.

Saturday, June 7, 2014

Do Economies of Scale Leave Room for Entrepreneurship?

One of the more telling circumstance in the recent recovery, is a subdued emphasis on entrepreneurship and new workplace formation. What emphasis does exist, often highlights those who already command a considerable portion of the marketplace - in particular for contributions which define how the marketplace functions.

As creative destruction and innovation continue to be discouraged in multiple areas, most profits have been sought along the outer scale where real arbitrage potential still exists. That's why - presently - there is more focus on entrepreneurial "hows" (or what becomes technological infrastructure design) than "what" (product diversity), for market domination. Only, this leaves even less room for alternative "hows" regarding societal options...let alone the "whats" of product definition which have become too centrally determined.

In the process, a growing fear of creative destruction has led to fewer calls for continued prosperity. Even so: when political constituencies agree that further growth isn't necessary, no one need be surprised when capitalism gets called out as though it were at fault for societal gridlock. Indeed: when too few emphasize growth, there is scarce difference between conservative or progressive perspectives, as to what both wish to preserve in any economic sense.

Think about the degree to which productivity has declined. To be sure there are service factors which account for the problem. Still, there's more at stake than services confusion. Through much of the 20th century, societies were able to rely on economies of scale which were the result of earlier disruptions and creative destruction. The problem here is that these earlier formations have long since matured, and yet have not been allowed to further evolve. As a result, institutions are now trying to use economies of scale in the wrong contexts, in order to make the difference.

Unfortunately, it's tempting to do so. Because economies of scale which carefully assign knowledge use, can generate the certainties that streamline management and daily operations. But knowledge use limitation has a considerable downside. For one thing, it's not always possible for individuals to optimize time management in externally defined environments - particularly the lower one goes into the skill chain. Even worse, knowledge use limitations only mean that fewer people (over time) are "needed" to do the necessary job, at all.

It's hard to let go of these methods because they've done far more than generate profits. This methodology has also provided incentives and certainties, in the lives of those who were able to follow the rules successfully. What's more, all of this generated product uniformity, and allowed entire fields of specialization to flourish.

But in a sense, specialization has become like planting a seedless watermelon: one sometimes wonders about the certainty of the seed supplier. After all, diverse possibilities for survival have already been ruled out - meaning one has to return to the single or primary source in the next season, just to plant the field. The specialist becomes cut off from other sources of inspiration or sustenance (outside of one's "field"), while product becomes "reliable" - if somewhat staid - over time.

Isn't all of this the best - indeed the only realistic approach? Economies in the 20th century benefited from scale to such a degree, that for a while it seemed as though the hardest thing about life would be chafing under the daily routine of a monotonous existence. Boring though it may be, legions fight to preserve that earlier certainty, today! May our lives be "interesting"? Hmmm...

And yet, both entrepreneurship and creative destruction are still needed for small scale aspects of product definition as well, in spite of possible appearances to the contrary. It's been too easy to forget that the work we do and the ways in which we interact with others, can at times be the most important product of all. Of course, that means completely discarding a lot of ideas, as to the most "efficient" means to achieve services productivity.

Only consider the confusing split in higher education as an example of the need for economic social representation. Is today's higher education a signaling product, a social product, or both? Economies of scale - in spite of their ability to determine product viability in the marketplace, have taken away too many entrepreneurial possibilities at the personal levels people find important. Digital technology cannot really provide creative disruption in education, until the social element is incorporated into the measured product.

Economies of scale for services would be problematic enough, if a growing social disconnect were the only issue at hand. In recent decades, economies of scale substituted for too many personal aspects of our lives. Unfortunately, it is becoming apparent that these processes have removed too many decision making and negotiation processes from our daily lives - all of which contributes to emotional instability. Our long run experiment in automated services has decreased our abilities to cooperate and relate with one another. What's more, inappropriate automation and scale in services, has prevented creative destruction and diversity in knowledge use applications as well.

While economies of scale will always be vital for manufacture and production, this more often holds for the creation and distribution of commodities and product separate from time. While these areas generally respond well to centralization, services need a completely decentralized approach. What's more, digital applications will eventually provide local means for greater product diversity than the centralized marketplace currently allows. Local digital production will generate personalized adaptations (particularly in building components) of the more generic elements which would remain quite profitable in a broader transportation framework.

Entrepreneurial ability is needed more than ever, to overcome the economic and social imbalances of the present. And a marketplace built on equal time access is needed, so that knowledge and skills sets can be locally arbitraged. It is difficult now for nations to move forward, because they have so many sunk costs in the numerous projects of the 20th century. Some of those projects no longer fit well with today's possibilities, just the same.

Thursday, June 5, 2014

Money and Time Value in Dual Equilibrium

Those who have patiently kept up with this blogger, know that I offer suggestions for economic activity in a porous, dual equilibrium. New local economies could provide a counterpoint to traditional organization, by combining business, services and educational elements under a diverse umbrella of ongoing activity. They would be porous in the sense of utilizing the same currencies, global resource opportunities and knowledge possibilities as the economies which surround them. Also, they would be porous in terms of economic integration, i.e. the skills capacity of all who wish to fully participate.

Knowledge use systems which begin at lower income equilibrium, would be accessible initially on a time use basis. Many could gain entry with little more than a portfolio of skills potential, which would be monetarily compensated when time use is matched with others. This compensation provides a "working base" which allows lower income levels to fully optimize their time choices. Time use accountability is often unnecessary or even impractical in middle to high income equilibrium, where income structures allow individuals to augment time use with the bounty of random resource wealth. True, time flexibility is not always an option for upper income levels, but this is due to both regional valuations and local consumer restrictions.

What then, would be "non porous" in local economies which adopt knowledge use systems? Coordination for both services and production processes would remain locally organized - hence decentralized from the broader economic environment. Local economies would make service potential and local investment opportunities for all citizens the first priority, and diversity of product options would be key to growth and stability. Investment in terms of organization and recording of activity remains local, so as to remain monetarily attached to time use as a base monetary component.

Why so "stingy" about local investment only? Otherwise it would not be possible to maintain an accurate and effective production norm, between services time use and related business activities. Without the incentive which ties together group innovations and personal rewards, the monetary link with time use would fall away - just as it already has in today's middle to upper income equilibrium. Fortunately, the time link is not necessary at upper income levels, because income capacity can substitute for aligned incentives and ongoing broad innovation.

Also, without the local investment designation, it would not be possible to take advantage of local factors in work and education integration, which can contribute to total factor productivity. The services to wealth norm that each local economy could generate over time, would sometimes determine how rigorous their tests might become for entry and local knowledge use capacity. Even though this implies exclusion to some degree, there would be countless variations of local services to wealth production norms to choose from. That really matters. For in the present, economic access continues to drift towards the high or low skill set options which a mid to upper income equilibrium can offer.

While locally generated knowledge can be freely offered to other communities with similar systems, there would be no direct competition with middle to upper level equilibrium, in consumer based terms. Before anyone partakes of these services offerings, they would need to be a part of a local economy and actively participating in skills arbitrage, for a given length of time until one understands and utilizes the system well.

In particular, a recent post about knowledge product, was able to get into some of the nuts and bolts as to how such an equilibrium might work in monetary terms. An equilibrium which directly accounts for time use, would rely on decentralized grassroots efforts. Otherwise, centralized efforts create problems caused by services that are filtered through taxation and government subsidies at multiple income levels. When ultimate responsibility shifts outside a system, so too the decisions as to how interpersonal relationships "must" take place.

It would be far more efficient, to allow direct monetary formation for knowledge use and skills set product at local levels. To be sure, knowledge use systems are not strategies for successful regions whose populations have good access to local services. Their populations benefit from the additional resource capacity of international markets, which makes it unnecessary to anchor consumption needs to specific forms of time use. However, time use systems could be a good option for regions and populations whose services, knowledge use potential and populations are woefully underrepresented.

These systems rely on incremental growth. This mean creating services and asset formations which - instead of requiring loans - become investment opportunities in one's own environment. Eventually, local investment strategies can also contribute to the monetary base which compensates time use. In other words: services as they evolve, also need to develop in ways that further compensate time use. Only consider what has happened to Cuba, as it emphasized skills sets as "adequate" for the general population for far too long. Unfortunately, the former wealth that Cuba once held, has continued to fall away.

Skills sets and diverse forms of wealth generation need each another, in order for both to flourish. But often the delicate balance which exists between the two, is not well understood. Cuba - for instance - is a polar opposite in skills valuation from the circumstance in the U.S. Here, many in the healthcare establishment have tremendous access to international and domestic wealth flows. Whereas, healthcare providers in Cuba are so impoverished, they do not even have access to the limited privatization and business formation which has been allowed for the elite.

Cuba also has a form of dual currency which has further impoverished its people. Little if any porosity exists, between time use skills sets and the limited business formations which the Castro regime have allowed to exist. If a dual equilibrium exists, in order to work effectively it must anchor time use to local economic capacity in both business and services formation. Otherwise, sustainability between one's time use and resource potential in the environment, will eventually break down.

Thus the two nations provide a dramatic contrast for compensated time value. Skills sets might either be "over rewarded" so as to destabilize business formation and economic balance, or else become a low value commodity such as has occurred, in Cuba. While skills time value is extremely low in Cuban healthcare, here is just a brief example of the opposite extreme in the U.S. from "The Innovator's Dilemma", HT Miles Kimball:

...if governments were forced to report on their financial statements the liabilities they face resulting from contractual commitments to provide healthcare for retired employees, nearly every city and town in the United States would be bankrupt. There is no way for them to pay for what they are obligated to pay, except by denying funding for schools, roads, and public safety, or by raising taxes to extreme levels."

How can dual equilibrium frameworks overcome the compensatory skills set extremes which have occurred in Cuba and the U.S.? Both countries currently pose all or nothing scenarios in this regard. Neither the separation of skills sets from business activity in Cuban currency, or the single representation of skills sets in a middle to upper class equilibrium, are able to serve the needs of a population in any overall sense. Oddly, limitations imposed by U.S. government on skills sets, are somehow reminiscent of the limitations on business activity in Cuba. In both instances, the governments personally gain from the arbitrary limitation.

Previously I have suggested that skills utilization can take place without access to international monetary flows in regions which do not have adequate skills representation. However, in this post I particularly needed to stress that this process cannot occur in isolation from business activity. Otherwise, existing wealth and assets only deteriorate over time, because new wealth formations are needed to maintain those which came before.

This is why the recognition of time use as a finite component among other resources, is key. If the vast economic difference between finite time use and random resource use is not recognized, the good fortune of monetary windfalls cannot remain in place for infrastructure and maintenance needs when they are most urgent. Services, knowledge use and business formation all have important roles to fulfill in economic activity. But before they can work well together, the delicate balance which exists between them, needs to be acknowledged.

Wednesday, June 4, 2014

Midweek Market Monetarist Links and Summaries - 6/4/14

"When you say interest rates will be low - you tell the markets you plan to fail." (Lars Christensen) http://marketmonetarist.com/2014/06/01/committed-to-a-failing-strategy-low-for-longer-deflation-for-longer/
Excess regulations are only making banking more fragile:
http://marketmonetarist.com/2014/05/29/julien-noizet-on-banking-regulation-and-the-importance-of-intragroup-funding/
More taxes seemed like a "good" idea at the time...http://marketmonetarist.com/2014/06/03/a-clean-break-with-hollande-a-lesson-for-piketty/

"Keep in mind that France has a wide range of policies that reduce aggregate supply." (Scott Sumner) How to think about France
Whatever the Fed wants, the Fed gets: Tim Duy on monetary offset
He understands government data better than many: Mark Sadowski nails it again
Interest on reserves certainly makes it harder to teach monetary theory: Reasoning from multiple price changes
Tim Duy is also concerned about the Fed's low rates: Tim Duy on monetary offset
How might the new minimum wage play out? A few thoughts on Seattle

Some Econlog posts from Scott Sumner:
Even Wolfgang Munchau has his doubts: Inflation targeting. It's even worse than you think
Can we have confidence in our opinions on immigration?
How accurate was this portrayal? Piketty on Kuznets

And cars are but one example...(Britmouse) http://uneconomical.wordpress.com/2014/05/29/theres-no-such-thing-as-car-prices/

Always, human components of progress need to be considered (Kevin Erdmann):
http://idiosyncraticwhisk.blogspot.com/2014/05/creative-destruction-thankfully-applies.html

Capital needs to be considered in terms of physical units, not as a vague homogeneous substance. (David Glasner) http://uneasymoney.com/2014/05/28/thomas-piketty-and-joseph-schumpeter-and-gerard-debreu/

The zero lower bound can be resolved without making paper currency obsolete. (David Beckworth) http://macromarketmusings.blogspot.com/2014/05/is-it-time.html

Monetary components matter (Marcus Nunes) http://thefaintofheart.wordpress.com/2014/05/28/martin-feldstein-is-more-hopeful-than-steve-hanke-unfortunately-hanke-is-right/
Sometimes you get lucky and don't even know why: http://thefaintofheart.wordpress.com/2014/05/29/coins-missing-in-the-fountain-while-some-wont-be-missed/
Once brought down to a lower trend, it would be quite difficult to reverse: http://thefaintofheart.wordpress.com/2014/05/30/if-you-dont-care-to-go-up-to-meet-him-even-if-halfway-hell-come-all-the-way-down-to-meet-you/
Unfortunately, a focus on price stability misses the larger picture: http://thefaintofheart.wordpress.com/2014/05/30/lee-ohanian-remains-in-denial/
2% inflation today, is not the healthy economy that it may appear... http://thefaintofheart.wordpress.com/2014/05/31/implications-of-the-excitement-about-inflation-inching-back-to-2/

Divisia now shows that money growth is practically dead in the water (Benjamin Cole) http://thefaintofheart.wordpress.com/2014/05/31/money-is-not-long-run-neutral-for-people-who-live-less-than-200-years-or-is-the-cfss-divisia-right-the-fed-is-dead-on-the-money-supply/
The American Right, let alone much of the economics profession, was not always fixated on inflation: http://thefaintofheart.wordpress.com/2014/06/01/the-way-we-were-without-revisionist-history/

Ben Southwood of the Adam Smith Institute makes an argument for a nominal GDP target: The eurozone is in dire need of nominal income targeting

In a sense, the U.S. banking system has moved towards 100% reserves in recent years (Nick Rowe) http://worthwhile.typepad.com/worthwhile_canadian_initi/2014/06/100-reserves-and-interest-on-reserves.html
Nick looks at John Cochrane's Fiscal Theory of the Price Level from a different perspective: http://worthwhile.typepad.com/worthwhile_canadian_initi/2014/06/john-cochrane-on-monetary-policy-with-interest-on-reserves.html

Also of interest:

Why has the Federal Reserve conducted monetary policy for so long, with so little reference to the money supply? (Michael Belongia and Peter Ireland) http://www.economics21.org/commentary/money-still-matters

One way to consider labor market participation (Timothy Taylor): http://conversableeconomist.blogspot.com/2014/05/hours-worked-no-change-output-up-42.html

And last, but certainly not least (from Tim Harford):
"The critics of GDP give it too much credit. It is a painstaking attempt to try to measure the total production of the economy. It is not the guiding star for economic policy, public morality or anything else."

Tuesday, June 3, 2014

Knowledge Product and the Aggregate Demand Factor

Why do we need more growth than we presently have? And, what could be a reasonable way to achieve a revitalized economy with greater participation - if it were possible to do so? Often, discussions regarding growth get bogged down, in political spats over government preferences versus the wish lists of Main Street. Much of which boils down to: If only citizens would just allow government to take care of X or Y! Or, if government would simplify taxation and allow deregulation where needed, Main Street would prosper!

But is the gridlock between Washington and Main Street really this simple? Neither of these scenarios quite reflect the circumstance at hand. Neither "solution set" really addresses the middle skill levels which are gradually declining, or the individuals who find themselves with too little economic access. More is at stake, however. Not only is a significant portion of the population short on needed services, but the kinds of coordination people actually need from their governments, has been on short supply as well.

Knowledge use systems could provide ways to work with these issues, and in the process allow individuals to find greater meaning in their lives. What's more: decentralized options are needed in service capacities, which have yet to evolve from narrowly conceived definitions. I like that Megan McArdle looked at services potential in this recent EconTalk episode on the future of work. However, a framework for greater economic inclusion was still somewhat missing in the podcast. In order for knowledge and skills product to achieve liftoff, they need broader applications than what are allowed in the present.

And even though digital means exist to augment knowledge use capacity, digital potential is still somewhat in the position of the steam engine before it gained broad societal application. To be sure, digital technology has found its way into some production measures, but it has yet to be harnessed for activities which still rely on earlier and far more expensive channels of operation. As a result, digital has not really been allowed to contribute to the good deflation which can result from well organized production. Equal time use for services in local community, allows just that kind of organizational possibility.

Today's lack of societal coordination, has some bearing on the fact that central bankers are dragging their feet. They remain unconvinced that aggregate demand needs to be thought of in terms of the growth trajectory of the twentieth century - including the years of the Great Depression. Even now, inflation targeting focuses on interest rates and a consumer led economy, in what has become an incomplete marketplace in terms of both services and living provisions.

Herein also lies a great source of confusion, as to the practicality of GDP - let alone the fact this confusion makes it more difficult to envision the economy in monetary terms. Who (supposedly, anyway) needs a growing GDP if people don't want a lot of "stuff" - and after all - said stuff is transforming into digital realities? However, it is the ways in which we relate to one another and work to find coordination as a society, which need greater representation in GDP.

Presently these functions are not only too indirectly represented, they are captured and patronized by special interests. People need knowledge use as a direct resource component, which counts in a monetary sense. Because our services are viewed in fiscal terms, intense struggles take place over the norms of what should have been ordinary human interaction, capable of arbitrage at individual levels.

By applying time use equally with matched participation, knowledge use becomes a product in its own right. This is important, because formerly limited services provisions which were available on fiscal terms (reallocation and debt) become possible in a direct, hence monetary sense. This allows individuals to become a direct part of the coordination processes governments struggle to provide, but often fail miserably in the knowledge based economy of the present.

With more services provision on the positive or monetary side of the ledger, knowledge use systems would become a recognizable production norm, capable of accurate measure and evolution over time. By including everyone in services capacity, good deflation becomes possible for the first time on service based terms. The fact that services become easier to monitor and generate, also allows people to engage in innovative production of goods and product which they actually want, rather than the asset formations previously thought necessary to secure a tax base for services.

This frees governments and communities to create housing based on consumer desires, because they no longer have to rely on resource intensive forms of housing to generate a service base. Because knowledge use would be matched directly through monetary means, people would be free to consume product that matches their income potential. That is, instead of being forced to rely on government subsidies, for the high degree of regulation a services tax base so often requires.

True, individuals do not have knowledge and skills capacity to the same degree. Just the same: automation, algorithms, group flexibility and a diverse knowledge option base are capable of assisting group formations at community levels. What's more, in decentralized services provisions, the recipient would play a much larger role in knowledge use options than is presently allowed.

Only remember how many of us don't want advice, so much as we desire corroboration. Just the fact of creating economic access through knowledge use, changes everything. It also allows the aggregate demand factor to be conceived in mutual production and consumption terms, for knowledge use in a monetary framework.