Baumol Effects are Different From Productivity Gains

Why so? Baumol effects act as another form of wealth capture (or at the very least, redistribution), for the wealth of existing local equilibrium patterns. Whereas, productivity gains translate into overall additional output, for existing equilibrium in aggregate. One way to think about this: Productivity is more about gains in output, than gains in wages - particularly when and where service markets have come to dominate mature economies.

Baumol effects in prosperous communities and regions can lead to higher wages for workers in general. However: since many of these workers aren't (yet) positioned to directly contribute to local wealth origination, their local access - regardless of skill level - could be priced out of reach. Especially so, if their input potential isn't connected to a primary market or wealth origination position.

These thoughts are my response to the local wage differentials which Arnold Kling addressed in a recent post, "Are locational wage differentials also productivity differentials?" One of the issues that was debated in comments, was whether specific wages were valued more highly, because of the level of wealth they were associated with.

However, mobility factors are also important, because when local employment at any skill level ends up defined as wealth capture or redistribution functions (for existing local equilibrium), local housing markets automatically act to reduce additional access. Otherwise, local coordination could take place at a reduced aggregate time price point, along a full range of skill levels (only remember for instance that supply side limits for physicians are based on urban - rather than rural - demand and associated constraint). Again, the Baumol effect expresses the time based coordination that appears locally "reasonable" among different skills groups, once the equilibrium dimensions of primary market formation are established.

Importantly, many forms of high skill employment also act as a form of wealth capture in local equilibrium, whereby local providers gain additional monetary advantages beyond what were already established via state and national levels. In other words, it's not just low skill workers who benefit from Baumol effects, but also high skill workers, whose "complete" monetary compensation takes place in a socially or politically sanctioned secondary market capacity.

Time arbitrage could reduce the necessity of today's excessive reliance on Baumol effects, as a form of economic access. One of the potential benefits of time arbitrage, is that by acting in a primary marketplace capacity, it wouldn't detract from the primary marketplace wealth distribution of local equilibrium which is already in effect.

New options for primary wealth formation are vitally important. Otherwise, it is becoming more difficult for citizens to access - particularly via social mobility - the already existing wealth of primary market points of origination. All the more so, when much of this general equilibrium capacity is already claimed via services dominant organizational  patterns. If time could purchase time, with skill and knowledge use as part of the package, knowledge use and service generation could begin to organize as new primary market capacity. Eventually entire attitudes toward skills potential on the part of all citizens, could change for the better.

Processes such as these could occur alongside existing prosperity, and in places where relatively little prosperity exists. Granted, few have taken seriously thus far, the concept of improving economic conditions where people already live. But when so many regions and mature economies are intent on closing their doors to those who still seek access, social mobility faces multiple constraints. A newly created economy at the margin, could be the best response.

Notes on Productivity, Mark-Ups, and a Bold Response

This post will hopefully illuminate some common threads in my recent reading and writing. In "Productivity Growth and Real Interest Rates in the Long Run", Kurt Lunsford of the Cleveland Fed, considers negative interest rates in a context of long term productivity growth. He writes:

The results of this Commentary suggest that low productivity growth is not driving persistently negative real interest rates. The results also indicate that an upward shift in productivity growth will not necessarily lead to higher real interest rates. Finally, the results suggest that low productivity growth does not condemn the economy to low or negative real interest rates.

Even though low productivity growth doesn't necessarily condemn the economy to lower interest rates, the Fed's best approach to productivity issues, is to make certain its commitments for monetary representation are fully honoured, for all participants. Otherwise, central bankers can inadvertently contribute to needless destruction in wealth generating potential. In particular, today's (unfortunate) interest rate targeting shouldn't include Fed second guessing, as to whether existing marketplace circumstance could diminish aggregate capacity. (Especially if private sector participants become anxious to take action, which I'll explain towards the end of this post.)

Indeed, a level nominal target would not only prevent such second guessing, it would lessen the Fed's arbitrary impact on economic forecasts, and make it more likely that the natural interest rate finally turns positive. Interest rate targeting of late, includes too many judgement calls, as to whether real economy factors will worsen productivity by generating less aggregate output, in relation to aggregate input.

I've written frequently regarding services as a drag on productivity, but in some respects, services are nonetheless associated with productivity gains. For instance, Stephen Broadberry has documented services productivity in terms of organizational capacity changes:

The key to achieving high productivity was the "industrialisation" of market services, which involved the adoption of high-volume, low-margin methods to produce industrialised or mass market services.  The uneven spread of industrialised services across sectors and across countries explains the shifting comparative productivity performance of Britain, the United States and Germany.

"The Social Transformation of American Medicine" was - in many respects - a documentation of the numerous occasions when physicians resisted services industrialisation. Did the physicians' preferences for autonomy, stand in the way of productivity gains?

Our desire for personal autonomy is not the real problem for productivity, because this preference is intricately connected to how we perceive our relationships with others in all aspects of our lives. Time based product is experiential, in ways which go beyond the practical necessities of knowledge based product. However, personal autonomy can unfortunately encourage widespread price making, as opposed to the price taking that is (informally and spontaneously) suggested by the marketplace for group coordination. Only recall that price making, from a production standpoint, increases the amount of input that is necessary, before output is possible. Which means it's lousy both in terms of economic progress, and the ways in which societies coordinate mutually desired activities over the long run.

Mark-ups are just one example of the problems which arise re price making. George Lundberg, M.D. (and editor of JAMA) in "Severed Trust: Why American Medicine Hasn't Been Fixed" (2000), noted the problem of mark-ups when he wrote:

I had to do one test at a time, and the cost was passed on at a fairly high rate for those days. The hospital charged five dollars for one blood sugar analysis. Then automation entered the laboratories in the late 1950s and early 1960s. The first major instrument was the Autoanalyzer...This instrument revolutionized the chemical lab business by making it possible to load multiple serum samples from patients into the machine and to run through one after another without any handling by humans. So what happened to the price? It stayed the same. The hospital continued to charge five dollars per test even though one person, running the machine, could do fifty in the time it used to take to do one. Why did the hospital continue to charge five dollars? Because it could get it.

Standard practice now may require blood sample analysis every hour, and sometimes instantaneously. I knew many pathologists who received a percentage of all the income coming into hospital labs...Many other medical procedures have a similar pricing history. Changes are initially high because of the labor-intensive nature of developing new procedures. The coronary artery bypass operation provides a perfect example. The surgeons who pioneered the procedure spent a lot of time and money on research and development. They spent many hours in laboratories, working with animal models, to perfect the technique. The time they spent with their first patients also was intensive. Everything was new, and it all required close monitoring and attention. The total cost for the new procedure exceeded $60,000 - a reasonable price considering the investment that had gone into it.

But then more and more surgeons learned the procedure, often in the course of their regular residency training. They had no research and development costs, and their patients did not need to be so intensively monitored. In fact, the bypass operation now is the most common in hospitals, but the charges haven't moderated in many places...Over and over again in the medical marketplace, a new commodity is introduced, high prices are charged because the commodity is rare, but the prices are maintained even when the commodity is commonplace. Why does this happen? Because the patients do not know any better, the insurance companies let it happen, and the purchasers do not care or are hoodwinked. This is how the costs of care in this country have gotten out of control.

Consider these markups in a context of aggregate productivity, where input demands in excess of output potential, have macroeconomic effects. In "Aggregate productivity and the rise of mark-ups", the authors note that average mark-ups in the U.S. have been increasing over the last 20 years, which in turn has coincided with slowing productivity. They add:

Mark-ups increase firm's prices and reduces their production. A high average mark-up reduces output and depresses the demand for labour and capital, generating low aggregate employment and low aggregate investment. It reduces the aggregate labour and capital shares, and increases the aggregate profit share. In fact, increasing average mark-ups has been proposed as an important cause for the declining participation rate, the slow recovery, the weakness of investment, the decline in interest rates, and the declining labour share in the US economy.

However, the level of average mark-up does not, by itself, affect aggregate productivity. Instead, aggregate productivity depends on the heterogeneity of mark-ups across firms. From a social perspective, low-mark-up firms are too large and high mark-up firms are too small. This inefficiency in the allocation of resources across firms, reduces aggregate productivity.

Baqaee and Farhi expressed that "low-mark-up firms are too large". Might this mean that recent healthcare mergers will choose the option of lower mark-ups, as political intransigence is unexpectedly being parlayed into private action? This is what healthcare providers have actively fought off for as long as many can remember. Perhaps autonomy would not have been lost to hierarchy, had individuals and institutions not turned the gains of high-volume low-margin methods among providers, into high-margin final product for healthcare consumers.

Mark-ups. Who could resist them, while they were there for the taking, and so many individuals and organizations had the autonomy to do so. Of course the cumulative effects of countless "lucky" price makers, has doubtless contributed to recent government cutbacks in healthcare. Yet it remains to be seen how these mergers on the part of healthcare providers, will affect actual marketplace dimensions. Will we get more output, with less input - meaning, more productivity? Only time will tell.

Medicare Cutbacks? No Rationale for Monetary Tightening

Clearly, there's problems with organizational patterns for healthcare, when losses in government support lead policy makers to assume the marketplace as a whole will be somewhat diminished as a result. Especially given basic structural reasoning, that private industry remains responsible for the dimensions of the real economy.

How many elites are giving up on economic dynamism, hence urging the Fed to adjust monetary representation downward, accordingly? In "What's Down With Inflation?", Tim Mahedy and Adam Shapiro argue that (expected) slow growth in healthcare prices is likely to remain a drag on inflation, and write:

We show that the key driver holding down acyclical inflation, and hence core PCE inflation over the past few years has been persistent changes to the health-care sector that began after the end of the recession. Specifically cuts to Medicare payment growth rates - which can affect prices throughout the health-care sector - have restrained health-care services inflation...Because health-care makes up a large share of PCE, price changes within this sector can have sizable effects on overall PCE inflation. We estimate that low inflation from this sector is currently subtracting about 0.3 percentage point from core PCE inflation, that is the measure that excludes food and energy prices. While health-care services inflation is expected to pick up in the coming years, it appears unlikely to return to its pre-recession level, which could restrain core PCE inflation for the foreseeable future.

Note first that "slow growth in healthcare prices" refers to expectations for aggregate or overall levels. However, my primary concern for this post, is with how the Fed is responding to cutbacks in fiscal support for healthcare. Given this rationale, the Fed is effectively allowing political curtailments for specific aspects of knowledge use, to be a drag for the monetary support of all economic activity. Why should political considerations for healthcare provision, be treated by the Fed as a negative supply side shock - particularly a fiscal adjustment that could prove relatively permanent? Where is the standard monetary offset to such a circumstance?

As Jeffrey Rogers Hummel indicated in a recent interview with Dave Beckworth (episode #83), "Inflation targeting doesn't do well with supply side shocks." Consider why this matters. If a nominal level target were in place, the loss in government spending for healthcare would be offset by monetary spending in other parts of the economy. As things stand, reactions to political healthcare constraints as negative supply side shocks, could make monetary policy directly responsible for the arbitrary reduction of long term growth potential.

Alas, this policy response, which does not take aggregate spending capacity into account, is an unwarranted judgement call about "necessarily" reduced output in general equilibrium. Nevertheless: When central bankers react by reducing monetary representation due to specific sectors, other areas of aggregate spending are affected.

Indeed, this central banker response could be likened to a form of unnecessary or artificial austerity, via the assumption that private interests can't maintain economic dynamism, when Washington is reluctant to maintain fiscal spending in any capacity. Are our private sectors prepared for the political fallout, should taxpayers become convinced this is the case? Already, the problems of healthcare organizational capacity, have contributed to further attacks on capitalism, in general.

P.S. Again: It's important to emphasize overall market reductions as responsible for "lower" (?) inflation in this instance. Consider the illusion of "lost" inflation in an insured family context. From JAMA, "Challenges in Measuring the Affordability of US Health Care":

The average employer plan had a premium equal to 9.2% of the median income in 1999 and increased to 18.4% in 2014.

Lane Kenworthy also recently noted marketplace limits in healthcare, when he stressed that "The share of wages going to benefits has been flat since the seventies (even though healthcare costs more), since - in aggregate - fewer employees receive healthcare benefits."

Does Education "Get in the Way" of Productivity?

Once, such a question wouldn't have even been necessary, since education has consistently added to tradable sector output gains in the past. Now however, the answer isn't as simple. One could say "it depends", since education often contributes to input requirements for final forms of time based product which are limited by their very nature. In these instances, education can contribute to excessive input, in relation to output.

How important are time based products to us as citizens, and what makes them important? Today's quality time based product, often comes with societal taxpayer obligations - many of which materialized when a larger percentage of the population held full time work with benefits. Decades earlier, extra taxpayer obligations didn't seem as burdensome as they do now. But since less work today is remunerative on those earlier terms, we'll need to reconsider in the near future, how we create the experiences and applications we desire from time based product.

After all, it's not possible to duplicate the nature of our time, and today's demands for time based product include excessively exacting terms. Still, the cumulative gains of education and productivity, play into knowledge based activities in numerous ways. Consider why a better understanding of the trade offs in education and productivity options is so important, given what these choices imply, for potentially more equitable divisions of knowledge based labour.

Recall that aggregate output of high skill time based product, depends in part on what consumers and service producers want. However, some high skill providers are better positioned than others, to protect (politically speaking) their particular divisions of labour from institutional adjustments to the status quo. Consequently, high skill knowledge providers who are well compensated, may elect not to implement technology (such as "digital cloud" spread of knowledge from one machine to another), in part because of how it would affect the nature of their human capital investments and educational institutions.

Hence education can "get in the way" of productivity, but there is also a dedicated consumer base for the practice of high skill knowledge, on these quality signalling terms. For instance: We recognize that the services of physicians are greatly valued by many individuals, in spite of any perceived shortcomings on their part. Consequently, finding more productive organizational patterns for human capital, will also involve shifts in perspective, regarding the nature of product quality and definition. When time based product is at stake, by no means is educational need a matter of simple linear extrapolation, in terms of productivity trade offs. Yet it's not so much that one's scarce time obligations are "required", or not. Ultimately, what's at stake is how we could potentially make room for both technology and human preferences, to better represent the experiences and applications we seek through direct involvement with others.

That said, what about time based product which could already be replaced by robots? In other words: To what degree would otherwise existing personal interaction, actually be missed by producers and consumers? This question isn't just a part of abstract discourse, for the elites of our institutions. It's a vitally important concern for all of us, as we need to make room in our economic circumstance for our most basic preferences and aspirations. Nevertheless: Where time based product doesn't provide useful experiential content, here's where automated replication can especially contribute to productivity and greater output, on the familiar terms of the status quo.

However, we are also concerned with achieving productivity gains via the non traditional lens of personal production and consumption preferences. Even though we can't duplicate the scarce time we already have, we can make better economic use of all our time in defined equilibrium context. In order to generate new wealth based on human capital, it's necessary to organize mutual time priorities internally, as basic economic units. Otherwise, it would be difficult for a wider range of workers to gain options for sharing the technological gains that have become integral to to time based product. Presently, those gains mostly accrue to knowledge providers with extensive human capital investment via traditional educational routes.

Education also gets in the way of productivity, due to the fact that we can't measure the input of human capital investment, in relation to the output of time based product. Taxpayer support and fiscal tools have been able to cover these gaps up to a point, but no one should not expect this coordination process to work efficiently for a full range of income levels. Even though no one can reasonably expect to measure the actual skill involved in each time product interaction, we would still be able to accurately measure the time by which lower income groups could coordinate for knowledge use settings.

At an aggregate level, the greatest productivity gains would gradually accrue, as time value and preferences "purchase" the time value and preferences of others. Since this new wealth is compensated through human capital investment cycles (economically linked educational connections), no debt or fiscal formation is necessary for what was previously part of public goods. Education in these instances would not need revenue from other existing productivity, because "learning while doing" can create its own wealth - much as what occurred on non economic terms in the past.

Today, distinctions between desired final product in which time scarcities can be safely removed, and final product where personal time is important, are being missed. Consequently, discussions regarding income inequality and lost productivity are more difficult to follow as well. This post actually began as a response to a Brookings op-ed from Jay Shambaugh and Ryan Nunn, "Why Wages Aren't Growing in America", where they write:

For wages to grow on a sustained basis, workers productivity must rise, meaning they must steadily produce more per hour, often with the help of new technology or capital. Further, workers must receive a consistent share of those productivity gains, rather than seeing their share decline. Finally, for the typical worker to see a raise, it is important that workers' gains are spread across the income distribution. If wages are rising but the increases are all going to the best paid workers, the typical worker doesn't see a gain. Two of these conditions have not been met, which explains the fact that productivity has risen while the median wage has barely changed.

Already I have written, how we will not always have the option in the future of ("suitably") rising aggregate wages via increased output, because of the ways in which a services dominant marketplace in turn limits output - especially in relation to output potential during tradable sector dominance. This is why I also suggest that instead of worrying about stagnant wages, we can do a better job of structuring non tradable sector activity in ways that more closely match the monetary potential - and the time potential - that we actually have in the present.

Wrap Up for November 2017

"Almost two-thirds of Americans, or 63 percent, report being stressed out about the future of the nation..."

Tyler Cowen interviews Steven Teles and Brink Lindsey for their book, "The Captured Economy".

The revenue for state pension funds is continuing to dwindle. And people want to work longer to make up differences such as these, but health issues can get in the way.

A series of slides from Jason Furman, "Can Tax Reform Get Us to 3 Percent Growth?", includes many of the more commonly voiced arguments.

"...beyond sports, entertainment, and finance, growth in product market size probably can't account for much of the rise in top-end income inequality." (Lane Kenworthy, "America's Great Decoupling")
From page 25: The share of wages going to benefits has been flat since the seventies (even though healthcare costs more), since - in aggregate - fewer employees receive healthcare benefits.

Discussions re real interest rates, generally lack a long term context.

Timothy Taylor responds to some recent trade papers.

Brink Lindsey and Steven Teles on medical access:
"From 1980 till around 2005, the number of medical school slots was frozen at around 16,000 first year students, but since then expansion has brought the number above 20,000...Meanwhile, by historical accident the vast bulk of residency slots is provided by Medicare, and for cost-saving reasons the number of slots has been frozen since 1997."

Many homes that were built after 1985 remained dry.

"Machines are unexpectedly disrupting upper-echelon workers."

Perhaps specific infrastructure for autonomous vehicles isn't a good idea...

There's a problem, when retirement supposedly means we're can't produce anything, anymore.
https://granolashotgun.com/2017/10/11/a-death-of-household-productivity/ And he writes:

The majority of the American population currently lives in some version of the suburbs. This will remain true for the foreseeable future. The real question is how ever more people with increasingly limited resources under considerably more stress will occupy them - particularly as failing institutions squeeze them for revenue. This is an extraordinarily fragile and vulnerable set of living arrangements and it isn't going to end well.

Income inequality is consistent with high skill, not high scale.

What could happen when cities end up serving the interests of a privileged few?

Timothy Taylor on regional price parities.

Health issues in rural areas contribute to lower labor force participation.

Noah Smith responds to Dani Rodrik's essay regarding neoliberalism.

"The U.S. economy is digitalizing at an extremely rapid pace."

Flexibility is key for working as we get older.

A closer look at declining labour force participation for prime age men.

Were it not for domestic service industries (finance, healthcare, legal), the U.S. would be similar to Canada or Germany in terms of top income shares. Is the government putting a "fat thumb" on the scale?

Again, the top one percent are turning out to be different from the capitalists of Piketty's imagination.

We're about to enter a new chapter of the digital era. Cloud robotics is one example, where one machine can simply send knowledge, ideas and skills to other machines, via the cloud. Nevertheless, I have to square this particular advance with the fact that physicians still use fax machines to get information to other offices.

"After rising for more than three decades, the overall labor force participation rate peaked in early 2000 and subsequently trended down." Also, from Brookings on the declining labour force participation rate.

Who are the largest employers of the U.S.? (a visual)

"More than half of people caring for the elderly are foreign medical graduates." Foreign medical students are now shying away from (those Medicare "frozen") U.S. hospital residencies. One wonders, will the residencies be filled by (the recent student expansion of) U.S. born physicians who have little interest in practicing in rural areas, or for the elderly? And to what extent do our healthcare providers actively seek immigration restrictions?

Tim Harford
"Companies still invest heavily in innovation, but the focus is on practical applications rather than basic science, and research is often outsourced to smaller outfits whose intellectual property can easily be bought and sold."

AT&T had to earn the right to be a monopolist.

The average American lives 18 miles from Mom. U.S. Migration remains low, but millennial migration is finally reviving.

Too many obligations elsewhere, for government revenue to maintain the Sixth Amendment.

On central bank anonymity, JP Koning writes:
"Not only have they blundered into their role of monopoly provider of anonymity and uncensored payments, they are trying their best to pretend the role isn't theirs."

Midwives were mostly eliminated in the U.S. However, there's a problem: Less than half of U.S. counties have OB-GYNs.

Miles Kimball perceives neoliberalism as sets of specifics. He particularly highlights the Washington Consensus.

Liberty Street: What makes an asset safe?

Mass transit is looking less sustainable as time goes on.

When you've got hypothermia, so the doctor turns up the air conditioner...

Thankfully, she didn't equivocate re interest on reserves this time.

We Have Met the Enemy...

...but why is it us?

Regular readers won't be surprised that I define the "enemy" in this post, as non tradable or localized sectors of the economy. These sectors often have incentives to obfuscate additional growth, since current organizational patterns mean additional growth tends to dilute their own power base. What's more, the line between public and private can be thin in these sectors, since they are closely intertwined with governmental and financial activity.

Indeed, lack of transparency in terms of product output, appears as though a feature - not a bug - when it comes to time based knowledge product. The lack of services output quantification in particular, restricts the capacity of monetary and fiscal policy to meet their desired objectives. The consequent income gains, limits, and divisions for applied knowledge use, are closely reflected in the conditions of our housing markets.

Lack of transparency in turn negatively affects productivity, and worries about productivity wear on the patience of those whose endeavour doesn't personally depend on productivity gains. One consequently hears arguments from progressives and conservatives alike that "No matter, growth in output isn't all that important anymore". I disagree. Closely related to this reasoning, is the notion that transparency isn't a necessary goal. Meanwhile, some on the right seek to reduce transparency by whatever means, if only for budgetary reasons.

Our localized non tradable sectors are setting up long term problems for today's macroeconomic theories, for the revenue requirements of governments and special interests are increasingly out of balance, with the ways in which society organizes for equilibrium defining or originating wealth. Equally problematic: The knowledge based component of our non tradable sector activities is too closely connected to government marketplace activity (via private enterprise connections), to fully understand how this imbalance ultimately affects macroeconomic outcomes. Only consider how Treasury secretary Steve Mnuchin recently told CBS News "Face the Nation" that reducing government spending is "not an issue we're focused on right now." If not now, when - especially since reductions of government spending were deemed important for decades??

If anyone needs further indications that structural concerns re monetary and macroeconomic policy are being relegated to the back burner, Tyler Cowen writes about job market papers in a recent post:

The number of money and macro papers is way down. Development economics is still flourishing and expanding, even relative to a few years ago, though I worry I am not seeing many generalizable results...I'm seeing Turkish, Korean and Chinese graduate students working on the big picture institutional and political economy questions.

Small wonder that both Wall Street and enterprising graduate students reach for the economic dynamism of developing nations, as the local spending of developed nations becomes mired in the limits to growth (via production definition) agendas of today's non tradable sectors. At the very least, other countries are still fortunate enough to be able to focus on the big picture. But where might this lead, for developed nations where internal resistance to progress is quickly translating into populist confusion?

In all of this, we face increasing political uncertainty, by refusing to back away from the processes which continue to raise the bar on the local requirements of human necessity. Our politicians on either side of the aisle are increasingly unable to find any path back to common sense in this regard. If this weren't enough, the current political "solution" is reduced to finding ways for the poor to foot the bill. If the poor aren't citizens, the authorities rush to deport them. If the poor are native born but cause any sort of problem (for themselves or others), people find ways to put them in prison where their taxpayer related costs are presumably easier to contain. The War on Drugs, irrational though it has been, has become means to isolate or else deport the poor, so as to reduce budget burdens. Alas, we have met the enemy, yet we are no closer to a productive or rational response.

Time Value as a Core Economic Principle

When asked to define basic economic principles, one of the first things that might come to mind for an economist, is efficiency in resource use. According to Investopedia:

Economic efficiency implies an economic state in which every resource is optimally allocated to serve each individual or entity in the best way while minimizing waste and inefficiency. When an economy is economically efficient, any changes made to assist one entity would harm another. In terms of production, goods are produced at their lowest possible cost, as are the variable inputs of production.

Given this rationale, why has the resource of our time been exempted, in so many instances? In contrast with other resource capacity, the time of many citizens is poorly utilized - given what is manifestly possible. Perhaps the fact economics is still such a young science, accounts for the fact that our time management efforts in the workplace have yet to fully adapt to the time use preferences of others. After all, the time at our disposal for interaction with the world, is the most important resource we hold in common.

Presently, we are not even close to full coordination and effective time management for all concerned. Even though some of us are able to successfully manage our own time, we need opportunities to do so which take the optimal time management of others into account as well. The struggles that many face in coordinating mutual efforts for mutual obligations, has generated substantial political burdens. Even so, too many policy discussions take place as if the marketplace were operating efficiently for time based services provision.

Consider the Investopedia argument re efficiency, for instance. Some physicians will reason that "changes made to assist one entity would harm another", specifically referring to how changes to help patients would burden a doctor's time priorities and create additional monetary burdens for taxpayers. While this argument is superficially correct, there's more involved, since the time value of physicians and citizens was not generated via a common time resource equilibrium. Granted: It's not logical for anyone to insist that government "force" others to provide special skills on their behalf. We simply can't insist on "rights" to the time or skills capacity that others possess. But likewise, no knowledge provider should insist of government that certain skills be exempted from the possibilities that individuals might pursue via their own time and resource capacity. 

Governmental impartiality for personal freedom and skills production needs to extend to all citizens, if valuable knowledge and skills are to be sustained and preserved for the future. When production and consumption provision are confused in any supply and demand model, the result is lost efficiency, for governments and citizens alike.

Nevertheless, the efficiency that individuals seek via time based product, is essentially different from the divisions of labour in which efficiencies are management driven. When final product includes personal interaction, time compensation need not be solely an institutional cost. When time purchases time, the nature of its use becomes more effective as a cost that individuals elect to personally manage, through mutually agreed upon divisions of labour. For the time based product of time arbitrage, time efficiency would derive internally and organically, from shifting preferences on the part of all involved. Time based product is multifaceted, and its efficiency is not so much a specific product outcome, as an experiential voluntary exchange between individuals.