Meditações - Your time is the true price you pay for the things you buy in life

Your time is the true price you pay for the things you buy in life.

There are six reasons why time is a better way to measure the abundance of resources than money. First, time prices contain more information than money prices. Since innovation lowers prices and increases wages, time prices more fully capture the benefits of valuable new knowledge and the growth in human capital. To look at only prices without also looking at wages only tells half the story. Time prices make it easier to see the whole picture.

Second, time prices transcend all the complications associated with trying to convert nominal prices to real prices. Time prices avoid the subjective and disputed adjustments such as the Consumer Price Index, the GDP Price Deflator, the Implicit Price Deflator, the Personal Consumption Expenditures Price Index, and purchasing power parity. Time prices use the nominal price and the nominal hourly income at each point in time, so inflation adjustments are not necessary.

Third, time prices can be calculated on any product with any currency at any time and any place. This means you can compare the time price of bread in France in 1850 to the time price of oranges in New York in 2023. Analysts are also free to select from a variety of hourly income rates to use the latter as the denominator to calculate time prices.

Fourth, time is an objective and universal constant. As the American economist George Gilder has noted, the International System of Units has established seven key metrics, of which six are bounded in one way or another by the passage of time. As the only irreversible element in the universe, with directionality imparted by thermodynamic entropy, time is the ultimate frame of reference for all measured values.

Fifth, time cannot be inflated or counterfeited. It is both fixed and continuous.

Sixth, we have perfect equality of time with 24 hours in a day. We should be comparing time inequality, not income inequality. If you measure differences in time inequality instead of income inequality, you get an entirely different picture of the state of the world. Put simply, almost everyone has more time to do things other than tend to their subsistence.

These six reasons make using time prices superior to using money prices for measuring resource abundance. Time prices are elegant, intuitive, and simple. They are the true prices we pay for the things we buy in life.

For more information on time prices, check out Superabundance by Marian L. Tupy and Gale L. Pooley.

Six Reasons Why Time Is Better than Money for Measuring Resource Abundance, By Gale Pooley | @gpooley

Professor Gale L. Pooley teaches economics at Brigham Young University, Hawaii. He is a Senior Fellow at the Discovery Institute and a board member of HumanProgress.org