General

Re: Time as a medium of exchange

baxter — Thu, 08 Jul 2010 00:52:52 GMT

"Can time under these conditions be a viable medium of exchage for good or services?"

Time per se is not contentious; it is not an economic good. You and I can be alive and enjoy the same period of time (say, year 2010) without any problems. Since it is not an economic good, it cannot be a medium of exchange.

Spacetime hypervolumes are contentious and scarce - we cannot occupy the same space at the same time. Each combination is unique. That's why you sometimes need to buy access to certain sections of spacetime (e.g. a hotel room) rather than getting them for free. Likewise, a person's time - e.g. limited control over one's body voluntarily ceded to another's purposes - is also contentious and scarce.

People's times cannot practically be a medium of exchange because they do not come in uniform units. Imagine if everyone traded in 7,000,000,000 different kinds of paper bills. One minute an Oprah bill is worth 3.29 times a Stephen Hawking bill, the next minute the market says its worth 3.22. The customer you are dealing with presents you 50 different kinds of paper bills simultaneously. A currency based in people's times would make indirect trade a gigantic nightmare. It would quickly be eliminated from commerce, or the currency if maintained under the barrel of a gun, would collapse the division of labor. And if the different currency exchange rates are pegged - e.g. making everyone's bills equally interchangeable - that is practically the same as enforcing fixed wages for everyone. (Basically, no reason for anyone to work hard or improve themselves).

If the world becomes highly based on information technology, though, I can see people using money substitutes (e.g. paper bills or electronically stored units) redeemable in computation (e.g. 1 paper bill = 1 quadrillion floating point operations). One second on the world's fastest computer might be objectively equal to 1 hour on one hundred slow computers, if they can be objective measured in floating point operations. But there's no objective exchange ratio between Stephen Hawking's time and Oprah's time, other than that determined by markets as fluctuating historical data.

Re: Time as a medium of exchange

John — Sun, 04 Jul 2010 19:28:13 GMT

Though i do work in manufacturing the rate at which i produce something makes no difference to how much i earn in wages as my value as a producer is determined by the owner of the business and his profit motive.

The more i want of something the more i'll have to produce towards those ends in achieving the means necessary to fulfill my want.

I'd like to look at history before the industrial revolution where due to the lack of capital development had the effect of having to work longer hours. i would say under these circumstances that time was much more valuable as there was less of it available to the individual outside of producing.

Todays there is a much more developed capital structure and production per unit of time is higher so less time is required to produce the same output of goods than in early history. Though i realize the effects of money printing, increased consumption, reduced production and myself having to work more but only in relation to a fait monetary valuation by inflation.

Time cannot be created by printing but only through producing more in less time, by increasing productivity more time can be diverted to other capital projects or to consumption. So if for without a fait monetary system, frac banking and its attributed disruptive effects on production and consumption. Would we be working more or less due to the proper coordination between consumption and production?

I have placed myself into an abstract theory by saying to myself what if rather than being paid in fiat money(paper) or gold(real money), what if i was paid in hours producing say 40 perweek. Of course the business owner couldn't pay me the full value of my work because the business owner has other expenses(maintaining capital, saving time for future expansion). The goods and or service would have a time cost attached to it based on the amount of time required to produce it plus other time costs related to capital, either added time or less time depending on productivity.

Is time not some form of commodity, can it not be exchanged between consumption and production. Does the value of time not change in relation to supply and demand. Is time effected by the division of labor and the capital structure?

Gold or time, a problem. If for anything to come to market something must be exchanged. gold has subjective value but this value is only such because of the coordination from the market with other pricing agents.

Gold is proof and time is trust. If given a gold standard and Anarchist Capitalist society under which would develop cooperation in exchange, what then might come after gold... another object? or something of which reflects the efforts of our labor... Time gained by increasing productivity through which comes to meet the demands of the consumer gained only by their sacrificing their time in the present for future gains.

But how does one represent their sacrificing of their available time into production?

Under a theoretical, if all where to understand economics via mises's work would we stop at gold being the medium of exchange or another commonly accepted medium of exchange or might one realize we exchange our time first before anything else can be gained?

Has Mises provided any thoughts in to this matter?

Re: Time as a medium of exchange

Think Blue — Sun, 04 Jul 2010 08:27:56 GMT

z1235:
Sure, how much for ten years of your "time" (i.e. your life becomes ten years shorter and mine ten years longer after the trade)? If biology/physics could facilitate this, then a market would surely emerge, but not before that.

There was actually a short film shown on PBS based on this exact premise. Not sure what the name of the film was.

Re: Time as a medium of exchange

James — Sun, 04 Jul 2010 06:01:00 GMT

Are you not straying dangerously close to the labour theory of value?

The value of a toaster is not determined by the amount of time someone spent constructing it, and never can be. It's a reflection of how much someone "wants" it. It might take just as long to build a machine which does nothing more than play Bohemian Rhapsody with a fart harmonica, but no one would buy it.

In any case, you're not talking about 'time' in an abstract physical sense, but in the sense of human energy. If Harry is a more efficient worker than George, then his so-called "time" will be worth a lot more than George's will, all else being equal.

If 'time' is not something that's ever going to be fundamentally equivalent in value between individuals, then how can it be used as a reasonable means of exchange? You can standardise gold coins to have precisely the same purity/weight etc, but you can't standardise individuals to produce the exact same quality of work in the same time-span.

Re: Time as a medium of exchange

John — Sat, 03 Jul 2010 16:07:35 GMT

I would like to take for example a toaster... rather than how much money(quantity of gold) it requires to make a purchase of the toaster, but how much time does it take to purchase said toaster. now how do we rank the value of the scarce resources required to build said toaster. Is it the quantity of scarce resources needed to build the toaster or how much time does it take to gather the required resources.

Why are things scarce if not because of the time required to bring those resources on to the market?
-do we have unlimited wants, or unlimited time?
If by employing labor in to the market do we not increase the time available to collect scarce resources?

the ultimate question is how does time factor into economics. If for without the corrupt fiat monetary system and given economic development under a natural standard medium of exchange (gold), would there be a means of exchange after the material matters of the physical and perhaps a progression towards something we all act within; that being time.

Though Austrian economics is the correct understanding of economics that does not mean we should stop here... perhaps given the development of a free market economy, might we have developed a different medium of exchange under more realistic conditions rather than under a fait money system.

Re: Time as a medium of exchange

Jon Irenicus — Sat, 03 Jul 2010 05:54:48 GMT

Time is infinite.

Your time certainly is not, though.

Re: Time as a medium of exchange

MaikU — Sat, 03 Jul 2010 04:20:55 GMT

Don't waste your time http://www.youtube.com/watch?v=idCFV0KF4uo

Re: Time as a medium of exchange

BibleLibertarian — Fri, 02 Jul 2010 23:24:09 GMT

I don't think time can be something measurable as a nominal unit of exchange because the "value" of the time itself is determined by the nature of the work performed during that time. Different work yield different productivity over the same period of time.

Re: Time as a medium of exchange

z1235 — Fri, 02 Jul 2010 23:11:15 GMT

John:
Such as what might the value of the DOW be in 'units' of time.

Whose "time"? Each of us values our own "times" differently, and none of us has any idea/insight as to how the others value their "times" at various times. Moreover, by limits imposed by physics, my "time" can never become anyone else's, so exchange is impossible. I could be missing a deeper insight here but why ponder scenarios so far removed from reality? As I said in my first post in this thread, come back when you can "give" me ten years of your life (shorten yours, so mine's longer) in exchange for $$, then maybe we can talk.

Re: Time as a medium of exchange

John — Fri, 02 Jul 2010 22:47:18 GMT

but time for us is not. I feel that time is scarce, as i do contemplate how much time that i have in which to complete a task or job. So i am acting upon the means i have, either through capital goods(machines, ect.). Though through capital i increse my production, i still act under a preceived notion of a scacity or lack there of of time. I adjust my time preferences to act accodingly with time so it is valued.

The problem i see is that their is a lack of the ability to comunicate valuation of time as a means of indirect exchange. Such as what might the value of the DOW be in 'units' of time. How we subjectively measure time as an exchangeable good.

Can time under these conditions be a viable medium of exchage for good or services?

Re: Time as a medium of exchange

z1235 — Fri, 02 Jul 2010 22:25:26 GMT

DD5:
Time is a scarce resource.

Time is infinite. So is space.

Re: Time as a medium of exchange

z1235 — Fri, 02 Jul 2010 22:24:05 GMT

Ok, then I'll answer your OP questions outright:

"Can time in and of its self value an object? can exchange be accepted based on time via simple accounting principals?"

No. No.

Re: Time as a medium of exchange

John — Fri, 02 Jul 2010 22:17:29 GMT

I was thinking along the lines of what time means to me subjectivly and how i place a value on my time depending on how a choose to spend it. I'm not thinking of 'labor theory of value', i'm thinking of time as the most fundemental basis of how one might subjectively value time spent on producing or consuming.

Some one though that gold had qualities of which they invested their time into developing as a good. Ones body put into laborous activities as a form of capital expressed over time in creating goods.

Re: Time as a medium of exchange

DD5 — Fri, 02 Jul 2010 22:13:06 GMT

Time is a scarce resource.

Re: Time as a medium of exchange

z1235 — Fri, 02 Jul 2010 21:56:17 GMT

I'm having difficulty following your thoughts due to your grammar, but I'm getting a feeling that you are perceiving "time" as a possible medium of exchange through the "labor + time = good" equation. (Correct me if I'm wrong.)

Labor Theory of Value has been debunked ages ago. Value is subjective and has nothing to do with the amount of someone's labor or time put into creating the object (or medium) of exchange.