Timebanking and co-production

Apparently this is the big new thing: timebanking and co-production. John Harris says that Ed Millipede is going to, well, maybe, use this as the centre of the salvation of the Left.

So, err, what is it then?

Timebanking rejects price, valuing all hours equally, because price equates
value with scarcity relative to demand.

Ah, right, timebanking is insane then. We value an hour of someone doing brain surgery at the same as the value of an hour of someone wiping bottoms.

Entirely ignoring that it takes 20 years of intensive training to do brain surgery (and 20 years of such by people who need to have a rare innate skill set) while wiping arses is something that can be picked up in a couple of days.

And, erm, given that each hour of labour is equally valued we also have no mechanism (other than politics of course, and won\’t that be fun for the politicians?) for allocating labour to the activities which provide the highest value. Without a price system (or direct direction by politicians) how can we know whether we need more house insulation hours or more food production hours? Without a pricing of labour how can we know whether we should be investing capital in one or another activity? For if we don\’t know the price of labour we cannot work out where we should be substituting for it.

They\’re insane (but then this is the new economics foundation).

The author of System
Failure, Jake Chapman, explains why, with market systems, ‘you can deliver
pizza but you can’t deliver public services’.

Eh? Sure you can deliver public services using markets. You can\’t provide public goods all that well with them, this is true. But there\’s a difference between the two. Vaccinations (a public good) are very diofferent from hip replacements (in the NHS a public service). Education for example: the Swedish have a market based solution and no one thinks that\’s got bad results (although there are those who swoon precisely because it is a market based system). The English public schools seem to do all right.

As to the rest of it, co-production seems to be Burke\’s little platoons dressed up as something which the bureaucrats have to manage. Entirely nonsensical as the whole point of the little platoons is that they work because bureaucrats don\’t manage them.

But then this is the new economics foundation.

15 thoughts on “Timebanking and co-production”

  1. Isn’t “man hours = money” (being in thrall to) “the discredited theory of a long dead economist”?

  2. I like the way the intro to the nef pamphlet by an American professory guy is all about how utterly wrong and stupid it is to use monetary measures to value stuff, but depends for most of its impact on a gee-whiz figure for the monetary value of housework.

    By the way, let’s keep a careful eye out for the phrase “earned entitlements”, because as far as I can see it’s a similar concept (but bright and shiny and modern, of course) to the absurdly outdated 1930s concept called ‘work camps’.

  3. Brian, follower of Deornoth

    ‘you can deliver pizza but you can’t deliver public services’

    This is, then, an argument for making everything a public service?

  4. “you can deliver public services using markets”

    It’s actually stronger thann that. All public services use the labour market – admittedly, many overpay, but they still have to get a workforce from somewhere. Nearly all buy in their capital and raw materials. The two things they don’t do is sell into a market, and have their ownership traded on the markets. As a direct consequence, their output is misallocated and their management has no need to be good at managing.

  5. Socialist wonks rarely have any sense of intellectual or social history, so they do tend to imagine they have invented ‘new’ ideas. Yet, arguably, all this time-banking drivel ultimately derives from the often bizarre intellectual contortions of the medieval theologians about how to determine ‘the just price’ for labour/goods/services, when, of course, the just price is simply the free market price.

  6. To make it cool to be drug free they called for the creation of a
    drug-free club where dues were paid in Time Dollars earned doing community service
    and where membership carried rewards

    So you do useful things for the community, and you get paid, which you can then spend on purchasing useful things from other members of the community.

    Hmmm, this group just reconceptualised the market economy!
    Personally, having read the paper, I think this guy is a raving “neo-liberal”, albeit on the conservative side, who is using a lot of buzzwords to disguise his thinking as something socialist, so as to get past the mental censors of the Labour Party members. Three cheers for him!

  7. Not only does this insane system fail to value the *purchase* of surgeons’ time over bottom-wipers, it also fails to value the *offer* of some time over others.

    How appropriate that NEF use the NHS in their linked paper – but have not noticed the latter’s common use of quality-adjusted life years (QALYs).

    For example: The old surgeon, with hours to live, in severe pain, and with no friends remaining, might be happy to exchange his last moments (if t’were possible) with those of a dying bottom-wiper with only seconds to live, but with a long-lost family arriving just outside the hospital. Our poor cloth-wielding carer would pay a kings ransom in diamonds for another minute of time.

    Like everything else, time is worth what someone is prepared to pay for it.

  8. ignoring NEF drivel, how insane is time-banking?

    If they have a reasonably sane rationing / allocation system, then it could work very well, particularly for things where no normal market exists.

    If I can contribute 1 hour of picking my nose and received 1 hour of having my boiler fixed, then it is insane.

    is rationing done via decentralized bidding, users choosing what they swap their time for, or is it done by bureaucratic diktat?

    Tim adds: An hour of baby sitting for an hour of baby sitting: sure, that’s sensible enough. But note that we’ve already arrived at a market pricing solution: baby sitting is worth the same as baby sitting. Further, the only advantage of time banking is that we’ve not had the tax wedge eating into each participant’s willingness to do the baby sitting.

    The second is, as you say, insane: because there is no pricing system in there, market or other.

  9. I think the time-banking is being thought of as being a work-around for those people who don’t want to earn cash income (because they might lose their benefits and aren’t well enough to commit to a full-time job), or can’t (their marginal product is less than the minimum wage, or less than the fixed costs of hiring someone, or some combination).

  10. @TracyW
    Sounds like a tax dodge (as do many other non-monetary exchange schemes, like local currencies).

    Someone should alert Mr Murphy.

  11. I don’t know about the UK, but in NZ it doesn’t matter what currency you trade in, you’re still liable under tax law for your earnings if you’d be liable for them in NZ dollars. There’s a de minimus rule, which generally covers off the local parents’ babysitting group, but beyond that if NZ’s IRD audits you, they’ll tax you on your earnings even if you call them something different.
    So if you use a local currency to avoid paying tax then in terms of tax dodges it’s tax evasion, rather than tax avoidance.

  12. “while wiping arses is something that can be picked up in a couple of days”

    I think you exaggerate. I (and I consider myself to be more or less average, in this respect at least) was probably at least 7 years old before I could, from a standing start so to speak, manage it reasonably reliably.

  13. If they admit that different people’s time is worth different amounts of money then they have just a form of market economy where every transaction goes via a government approved clearing house. Every totalitarian’s dream.

    If they claim that everybody’s time is worth the same then there idea isn’t even as good as Marx’s Labour Theory of Value. He might have been wrong but at least he understood that some people’s time and labour produces more value than others.

  14. “Tim: An hour of baby sitting for an hour of baby sitting: sure, that’s sensible enough.”

    I’m not so sure. Sitting for an hour on a Tuesday night isn’t, of necessity, going to be more valuable than sitting on a Saturday night. That’s assuming the same number of children at the same ages etc.

    Essentially, for baby-sitting, this is almost Krugman’s example of the Capitol Hill baby-sitting co-operative back again, and that managed to go bust. Partly because it had a crazy monetary policy, but mostly because there was no pricing structure to allow for people to value different baby-sitting jobs differently.

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