Time Is Money, Money Is Time
Our limited time, our brief candle as Shakespeare’s Macbeth had it earlier in the soliloquy quoted from above, may count for very little in the grand scheme of things, but is of the utmost importance to each of us personally. Unlike the other dimensions, height, breadth and depth, the fourth is almost infinite, but individuals enjoy only a small part of it, our three-score years and ten. Time moves on. What really matters is not wasting it.
We may appear to others to be wasting time. But it is not wasting it when we take a break, recharge our batteries, or stop to think. Pleasure-seeking, pursuing happiness, removing uneasiness is making good use of time. We are all different and enjoy different things, so wasting time is not time wasted so long as it our personal choice. No one can allocate time as effectively as the individual. It is intensely personal.
While using time effectively is a private pleasure, wasting it can be very frustrating. Wasting time is the denial of personal ambition, whether it is as trivial as in a game of cards or as momentous as changing one’s circumstances. Avoiding time-wasting requires positive personal action, but we live in a world where that decision is progressively being subsumed by the state. But the state has little concept of the importance of time, replacing it with indecision and deferment. Time offers change and progress, except to the state. The evolution of events that go with time undermines the state’s certainties. The state believes it has all the time in the world to get things right by consulting, reporting, debating and eventually acting, while everyone affected has to wait.
It takes more than a decade to agree a trade deal between the EU and another government, neither of which feels time is important. This snail’s pace with our time is the norm in government and inter-governmental affairs. In business, time is a cost working against profit, because profit is always measured within a time-frame. A businessman who is both proficient and efficient is a valued person in society. He is productive, maximising profits while limiting the time spent achieving them. Time is also the basis of interest rates, which far from being a cost of money, is an expression of time preference. Time preference is the discounted future value of materials, energy and effort not yet in possession, but promised to be so at a given future date.
Through monetary policy the state commandeers our time preferences, forcing its own omnibus version upon us. It commands the value of our personal futures relative to cash. We don’t often realise how damaging is the loss of freedom to determine the fourth dimension for ourselves. If we understood the state was depriving us of time, we would probably be angry. The embezzlement of its use is behind the growing frustration felt by ordinary people. It is the underlying theme to Hayek’s Road to Serfdom, how the state conspires to steal its people’s freedom for statist priorities.
The state’s functionaries are usually ignorant of what they are doing. As stated above, wasting our time doesn’t matter to them. It has taken two and a half years for the British Government to fail to negotiate Brexit, wasting every citizens’ time in both Britain and the EU wanting certainty.
The statists don’t care, because they place little or no value on time. The vade mecum which is their ultimate guide in these matters, Keynes’s General Theory, makes no substantive mention of the meaning of time until Page 293, where he correctly states that “the importance of money essentially flows from it being the link between the present and the future” [ italics in the original][i].
It is one thing that Keynes actually got right, but he then ignored the implications. The time dimension does not sit well with Keynes’s mathematical approach to economics, because the assumption behind equations is that time does not alter them. [email protected] can only assume all components are unaffected by time. In reality, a static world where yesterday’s deployment of money replicates tomorrow’s deployment of money, does not exist. If it did, there would be no human progress. Therefore, time brings with it change, so is an inconvenience which the neo-Keynesians choose to ignore.
Clearly, the statists’ motivation was to discard proven classical theory to make way for propositions that favoured the state controlling money, which as Keynes pointed out is the bridge between the present and the future. First, we produce. Then we are paid. Then we spend and save. Money is the temporary storage of our labour for future use. Time and money are synonymous and common to all these activities.
We think the state is taking only our money, but it is also taking our time. If it was more widely appreciated that we are being robbed of our time, attitudes towards state intervention would surely change. As it is, we think it is only money, and surely, who would want to be thought of as so venal to object to its redistribution to those that deserve it more?
Create a credit cycle, then suppress the consequences
The state has been extremely effective at picking our pockets, employing monetary prestidigitation as well as taxes. By taking control of the economic and monetary agenda, the state has persuaded us it can deploy our money more effectively than we can ourselves. It commands us to exclusively use the state’s own currency, backed by our faith in its credit. It suppresses interest rates to grow the economy and maximise taxes, saying we can become better off together. It takes payments from us and spends them in a manner determined by the state acting in our collective interest.
When the theft of our time is relatively minor, we tolerate it. We can grow wealthier together. But when we find ourselves working increasingly for the state, spending almost half our working lifetime doing so, our discontent and resentment builds. We are no longer in control of the fruits of our labour, our time. The central bank then springs to our rescue, creating the extra money we have lost in taxes, and encouraging the banks it regulates to extend credit to allow us to make more and spend more. It debases both our time preferences and the true cost of our wages to our employers. For a brief period, it might appear to work, so long as the losers don’t notice and complain. But it leads to economic instability by replacing the healthy randomness of our collective desires with a cycle of credit expansion and contraction.
The theft of time ends in a credit-driven crisis
The theft of our time through monetary debasement has continued apace ever since the discipline of gold was removed from the global monetary system. This occurred in steps from the early 1930s but accelerated after the Nixon shock in 1971. Prices then began to rise rapidly, as money’s purchasing power declined. The state eventually found a solution to rising prices: it just denies they are happening. The contents of consumer price index is continually rotated and adjusted, which in effect goal-seeks a modest two per cent annual rise.
[i] JM Keynes. The General Theory of Employment, Interest and Money Palgrave Macmillan reprint 2007
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