Previously, I’ve raised the unanswered question. How do you measure the value of people’s time outside of working hours? The question of valuation inside working hours is easy: the hourly rate or salary is used to determine how much a specific labor task is valued at. But time outside of work, that’s a trickier value proposition. But, after thinking through first principles carefully, I have an answer.
So, let’s start with the basics. Labor outside the economic system.
-
A person can labor to gather natural resources.
-
A person can own resources, these are now considered “artificial” resources.
-
A person can labor to transform natural resources.
-
A person can labor to return resources to nature.
Here, the exchange is only between one person and the rest of the natural world, without respect to exchanges between persons. Now, exchanges between people can be classified as follows, still without the definition of money.
-
A person can gain a good or service from another person.
-
A person can loose a good or service to another person.
This is solely in regard to what can happen on the physical level. It says nothing about human desires. So, that’s the next definitions.
-
A person can desire a good or service.
-
A person can want to get rid of a good or service.
-
A person can agree with the transfer of a good or service.
-
A person can disagree with the transfer of a good or service.
-
Generally, person A will agree to transfer a resource to person B if person A does not want the resource and person B wants the resource. But this is not always the case, there can be other reasons for agreement/disagreement.
-
If person A gains a good or service that belonged to person B, but person B did not agree with the transfer, then person A stole the resource from person B.
-
If person A looses a good or service to person B, but person B did not agree with the transfer, then person A “garbage-dumped” the resource or “tampered” the service onto person B.
-
An agreed transfer of a resource between people is the basis of higher-level concepts.
But wait, what is a good or a service?
-
A good: a transfer of a physical object.
-
A service: Primarily performing labor, the transformation of physical objects, on behalf of physical objects already owned by someone else.
So now, there are further classifications of agreed transfers of resources between people.
-
Gift/donation: Any agreed exchange of a resource where one party is clearly the beneficiary at the expense of the other party clearly being at a loss.
-
Trade: An exchange of resources where each party gains and looses a resource, which, furthermore, the economic value of the resources is agreed to be equal.
Trade is the basis of money. Money is primarily a tangible object, such as salt or gold, for measuring fair trade by the weight of its quantity. Physical money can be replaced with a symbolic representation of this quantity, this is currency rather than money.
In an early, relatively undeveloped society, it is understood that money and trade are games that people voluntarily choose to play, but ultimately, you can still live without money. So, what are the causes of the invention of living expenses? It is the overwhelming preference of a society to obtain some key resources from businesses rather than nature, businesses that charge a nominal fee for their goods and services.
-
Agriculture as a business: Food is provided for a price.
-
Materials as a business: Wood, cloth, stones, metal, you name it. If it’s a physical object that can be collected from nature then used to build other useful objects, it can be obtained for a nominal price.
-
Land permits as a business: Land is owned by a government or landlord, and permission to use the land is granted for a price.
-
Construction as a business: Housing is built for a price. Roads are built for a price. Usually, governments, landlords, and banks with a steady income from weekly/monthly payments are in the best permission to pay construction teams directly.
-
The existence of lots of commercial business activity in a society incentivizes the creation of governments that tax in a method similar to how the businesses charge for their goods and services.
So basically, the last point I wanted to put out is this. If you have a lot of businesses crop up that make money from rental properties, but there is no existing land tax, the government might update its terms so that land ownership is taxed. Then some people may have a new baseline living expense that they must pay. But at the same time, you can argue that most people were already preferring to live in a way that required them to pay like that anyways, so it’s not that much different.
So now, the baseline expectation is that you have living expenses, how you are going to get the money to pay for them? Although you could obtain the money from a multitude of various commercial transactions, the primary idea behind the creation of these businesses is that they focus on performing a specific, specialized task. And in order to produce sufficient output to cover everyone in society, it takes a large group of people performing the same specialized task that underlies the business. Therefore, as part of being a member of these businesses who gets paid, you would perform the same specialized task for as many hours of the day as you can reasonably muster.
Thus follows the invention of work-life balance. What is the practical limit on the number of hours that can be worked? For agriculture, it environmental conditions set the practical limits: it’s pretty hard to do agricultural field work without sunlight, especially without modern artificial lighting technology. In more modern times, now that we have sufficient technology to eliminate the limiting environmental factors, a new limit has become extremely obvious: humans tire out and need to sleep. Although this was known during ancient times, it did not so frequently feature in the mind of running the business world because there were always more immediate issues to worry about, like simply tiring out from physical labor.
But, with modern mechanical technology and the modern knowledge worker economy, tiring out from physical labor is no longer the primary concern. The primary concern is the brain tiring out from mental labor.
So, herein defines the general limits of the modern worker’s time commitments, give or take.
- 8 hours full-time working hours
- Incidental basis, a few hours overtime
- 3 hours meal breaks and getting ready for work/sleep in the morning/evening
- 1 hour additional physical exercise, for jobs that only involve limited physical motion
- 2 hours max additional motor vehicle commute time that’s not counted as part of the job
- 8 hours sleep
With overtime and a long commute not billed on company time, there’s not a single hour remaining in the day for anything else. Most people would consider this an outrageous regimen. Your typical modern worker will have at least 4 hours “free time,” of which many will like to devote 2 hours as “family time” (give or take).
But, the fully modern question. 2 hours? 4 hours? That’s still quite a lot of time, that’s enough to slip in another quarter-time or half-time job into your day. What are you doing with all that time?
Now, this circles back to my previous article I’ve written about engineering, home networks, and utilities. Entertainment is a prime choice, especially when they have spare money to spend on it.
But now, to answer the ultimate question. What if instead of using that time for entertainment, it is used for more productive endeavors without pay? Or, alternately, how would you measure the value of the time spent as entertainment when you don’t have a baseline labor pay metric to compute with?
As you must understand, it is a very modern idea to be able to measure time slices out of a person’s day and assign a commercial value to them. This is all based off of the assumption of a highly commercial economy and lifestyle that even makes the mode of thinking “time is money” so universally feasible. Time isn’t, fundamentally, money. It is simply usable as a means to compute money for many jobs in modern businesses.
You see, what we’re getting to here is actually quite far displaced from the primary definition of money. This isn’t a matter of measuring fair trade, this is a matter of measuring how one person spends their time.
-
For their employer, the market, the rest of society
-
For their family
-
For themself
When you interact with an external market, of course there will be net gains and losses. But when you spend your time for yourself as the customer, that is net-zero, there is no gain or loss in money when you both provide and consume goods and services for yourself. If the family is treated as a single economic unit, that means all goods and services from the family to the family are also net-zero.
Okay, but I’m trying to figure this out, though. What service is it, exactly, that you are selling to and buying yourself when you give yourself free time for entertainment? Well, it takes a stretch of imagination to answer this question, but we can draw from demanding jobs in the modern world to get an answer.
Take, for example, transcontinental truck drivers. These are people who must spend several days out on the road, away from home. How many hours a day do they spend on their job? Well, you could argue, technically it is 24 hours! Properly taking breaks and getting proper sleep is considered part of the job. You could just as well bill this as company time. So, here we are, you can sell your sleep time and exercise breaks to the interest of an employer! These activities, therefore, do in fact have a market value.
What about personal entertainment time spend for watching a movie? How can that have a market value? Well, the first thing that comes to mind is comparing with professional movie critics, these are people who get paid to watch movies.
It’s important to understand that the reason why most workers don’t get paid for their time outside of work is because they don’t want to be. The philosophical idea is that they want to maximize their time available outside of work. So, by passing this time to “their” time rather than their employer’s time or customer’s time, naturally that means they don’t get paid for it, the money transfer is net-zero.
A lot of what we’ve covered primarily hinged upon the idea of agreement. This is all based off of business and commerce, so agreement is the mandatory baseline. However, the note I’ve mentioned near the very beginning is that agreement does not necessarily entail desire. What is it that people really want?
-
Do people want fair trade?
-
Do people want to provide useful goods and services to other people?
-
Do people want to receive useful goods and services from other people?
-
Do people want the ability to loan out money to those who need it? Do people want the power to settle debts?
-
Or do people want to simply unplug from this whole modern economy and have their own time for relaxation and entertainment?
From a commercial standpoint, the thing that’s really special about what people really want is that they are likely willing to pay more for what they really want than for things that they merely agree to but don’t really want. However, it’s always important to remember that wanting something and wanting to pay for something are two different things. Well, we usually say “willing to pay” because many people would more than like to have things but not have to pay for them.
The big point I wanted to put forward here is something that I call an “alternate hypothesis of economics.” People don’t primarily work to earn money, to earn the ability to trade fairly, they primarily work to earn “relaxation and entertainment,” which can be treated as a currency of its own. They work to obtain the resources that are used to buy time away from work and to buy entertainment for themself.
To some extent, this can work as a system of economics. “If I entertained you, it’s fair that you entertain me back.” You pay those who entertain you, and you get paid when you entertain someone else. But in general, entertainment alone is not enough to make ends meet in a full economy with businesses providing for other life essentials.
But, this model does work very well to explain useful incentives and motivations when working with other people in the business world, where not everyone is self-motivated to do work. “I’ll buy you vacation if you get this task done for me.” “It’s a deal!”
And retirement? If retirement is the idea of an extended summer vacation at the end of your lifetime, which it is in the modern world, who wouldn’t want to work primarily to obtain that? The ability to not have anyone else tell you what to do, it’s all your time, and you have plenty of money to spend on fun and games. That is what are working for. Not fair trade, not the power to settle debts, none of that business-minded nonsense. The ability to have all of the benefits of the modern business world but none of the responsibilities, that is what they want.
Nowadays, when home life has become highly commercialized, it’s important to understand this alternate hypothesis of economics and integrate the reasoning with your business model if you are selling to home users. When you understand the motivations of the market well, you are better positioned to optimize what they really want, and also provide goods and services to them in a more fair-trade manner than would be the case were you measuring the wrong parameter.
Finally, one point that I must finish off relating to the idea of home networks. Part of the reason why engineers want to run their own home network is because their ISP can’t do it well enough. Why is this? After all of my discussion thus far, there are a few different types of users that you have to cater to differently to run a home network well.
-
Engineering/research users. These users want full tech specs and the ability to customize.
-
Business operational uesrs. Your typical “work from home” employee post-pandemic (COVID-19). These users are focused primarily on minimizing disruptions and downtime, but they don’t really care about the tech specs of the network, just that it provides a route to the Internet so they can connect their VPN.
-
Home users, off work hours. Relaxation and entertainment is the primary focus.
The problem is that ISPs typically focus on only one category, typically business or home, but not both. And, definitely, not engineering/research.