Lifetime Economics

by Bob Blain, Ph.D. Professor of Sociology, October, 1998

Lifetime Economics consists of rules you can follow for your lifetime. They will increase your real wealth, which includes your health, because they will reduce your work time and increase your free time to enjoy life. These rules will have beneficial results even if you follow them alone, but they will have even greater benefits the more people that follow them.

Rule 1: Value goods and services in useful life time.

Rule 2: Price goods and services in work time.

Rule 3: Maximize profit where:

Value - Price = Profit.

Life time - Work time = Free time.

To maximize life time:

1. Build to last.

2. Service and repair regularly.

To minimize work time:

Cooperate.

1. Communicate.

2. Specialize.

3. Reciprocate.

1 and 2 => Share the work.

3 => Share the wealth.

The three evolutionary levels of cooperation:

1. Family.

2. Government.

3. Money.

Cooperation first developed among small groups of biologically closely related persons that we know as families, clans, and tribes. They communicated face-to-face. They learned specialized skills by observing and working with family members and close relatives. They enforced the reciprocation of duties and rights face-to-face, with words and gestures of approval and disapproval.

The limitation of family cooperation is small size. Few people can produce relatively little. More people can specialize more, to produce more effectively, efficiently, and abundantly. The evolution of government through kingship, monarchy, and parliaments facilitated an ever-larger scale of cooperation.

Essential roles of government today:

1. Provide an adequate money supply,

2. Regulate its value, and

3. Prevent hoarding.

Ways government can provide an adequate money supply, from best to worst ways.

Best way:	1. Spend it into circulation to pay for public goods and services. This way money issue increases national infrastructure.
	2. Lend it to pay for public goods and services. Money loaned by government can increase national infrastructure but must be repaid. So it enters and leaves the money supply periodically.
	3. Give it to people. This increases the money supply and citizen purchasing power, but does not increase public goods.
Worst way:	4. Borrow it and pay interest on it. Government loses its sovereignty to its creditors and must repay more than the amount of money borrowed. Leads to ever more debt and increasing taxes to pay growing interest.

Ways government can regulate money's value, from best to worst way.

Best way:	1. Denominate money in hours to represent work time. Defines an hour of money as worth the product of an hour of work.
	2. Use a Consumer Price Index. A CPI encourages price stability but not price fairness.
	3. Use interest rates. Raising interest rates fuels inflation in the name of fighting it.
Worst way:	4. Supply and demand, an essentially trial and error method. We would never use trial and error to set length, weight, or volume units; we should not use it to set money units.

Ways government can prevent hoarding, in order of desirability.

Best way:	1. Limit income to work time. Work time is a resource limited to the same day, week, and year for everyone.
	2. Limit income to life time. Life times vary among people more than day times, so using life time as a standard of income sufficiency would allow more variation in life time income than work time.
	3. Freeze wages and prices. These freezes are arbitrary and temporary.
Worst way:	4. Tax incomes progressively. The rich still get richer and use their accumulating advantage to influence government policy to subvert the intent of progressive taxes.

Money, the Highest Evolutionary Form of Cooperation

1. Money facilitates cooperation worldwide while supporting local autonomy.

2. People pass money person-to-person-to-person across very long communication chains, which include all specialties without exception.

3. Money denominated in hours can encourage everyone to exchange goods and services by an equitable and reciprocal standard; an hour of work time for an hour of work time.

Life time economics can and should replace the trial and error system we use now. The powerful and essentially positive words "market," "capital," "profit," "supply," "demand," "price," and "value," have been perverted to serve the interests of a small portion of the human race. It is time to convert to rules that are healthier for all people and that can reduce our waste of the earth's precious resources.