I think you raise a number of interesting points in this post. I spend quite a lot of time thinking about these and similar issues.
I’ve commented in the past about the difficulty in practice for many people of directly trading off time for money. Your criticisms of how labor economics treats the value of time are quite similar in character to the way Austrian economics approaches the problem of value generally.
Austrian economists tend to emphasize the subjective nature of value and view the value of all goods (including money) in a similar way to your discussion of the value of time. I think maintaining this perspective is important when making decisions as naively applying the convenient fictions of mainstream economics can I believe lead to sub-optimal choices at times.
On the other hand I think people sometimes underestimate the possibilities for exchanging money for time. I found The 4-Hour Workweek quite eye opening in this regard, despite its flaws. In the modern world of globalization and the Internet there are greatly expanded opportunities for outsourcing all kinds of tasks that many people wouldn’t consider.
While I haven’t experimented with outsourcing my life yet I do make a conscious effort to structure my life in a way to maximize opportunities for exchanging money for time. I find it helpful to think about many decisions in terms of option time value as it provides a framework for recognizing the true value of ‘wasted’ money that is spent to maximize such flexibility.
I see you are already a Zipcar member. Zipcar is an excellent example of unconventional outsourcing / trading money for time I believe. It allows me to outsource time consuming maintenance, idle storage / parking, insurance and tax paperwork, financing and purchase / resale. It also has high option value thanks to its pay as you go nature and flexibility in choosing different vehicles for different needs. Again, thanks in large part to the Internet, there are increasing options for services that offer this kind of time/money trade-off.
I apply similar considerations in other aspects of my life. I choose to live in a small downtown apartment to minimize commute time (walk to work), maintenance and administrative time (largely outsourced to the building management) and housework. Living centrally in a city also offers many more options for time/money trade-offs than are available in more remote locations. I think there is sometimes a tendency for people to neglect or undervalue such considerations when making lifestyle choices. I think it is valuable to make large decisions (career, where to live, etc.) with a view to maximizing flexibility and option value.
I did a draft of an article to post here elaborating on some of these ideas but had trouble pitching it in a way that I thought would be useful/appreciated here. Perhaps I should revisit it.
Finally, I think the importance of computational and temporal limits on rationality are generally under-appreciated here, something I’ve mentioned before on occasion.
I did a draft of an article to post here elaborating on some of these ideas but had trouble pitching it in a way that I thought would be useful/appreciated here. Perhaps I should revisit it.
Please do! I, at least, look forward to reading it.
I think you raise a number of interesting points in this post. I spend quite a lot of time thinking about these and similar issues.
I’ve commented in the past about the difficulty in practice for many people of directly trading off time for money. Your criticisms of how labor economics treats the value of time are quite similar in character to the way Austrian economics approaches the problem of value generally.
Austrian economists tend to emphasize the subjective nature of value and view the value of all goods (including money) in a similar way to your discussion of the value of time. I think maintaining this perspective is important when making decisions as naively applying the convenient fictions of mainstream economics can I believe lead to sub-optimal choices at times.
On the other hand I think people sometimes underestimate the possibilities for exchanging money for time. I found The 4-Hour Workweek quite eye opening in this regard, despite its flaws. In the modern world of globalization and the Internet there are greatly expanded opportunities for outsourcing all kinds of tasks that many people wouldn’t consider.
While I haven’t experimented with outsourcing my life yet I do make a conscious effort to structure my life in a way to maximize opportunities for exchanging money for time. I find it helpful to think about many decisions in terms of option time value as it provides a framework for recognizing the true value of ‘wasted’ money that is spent to maximize such flexibility.
I see you are already a Zipcar member. Zipcar is an excellent example of unconventional outsourcing / trading money for time I believe. It allows me to outsource time consuming maintenance, idle storage / parking, insurance and tax paperwork, financing and purchase / resale. It also has high option value thanks to its pay as you go nature and flexibility in choosing different vehicles for different needs. Again, thanks in large part to the Internet, there are increasing options for services that offer this kind of time/money trade-off.
I apply similar considerations in other aspects of my life. I choose to live in a small downtown apartment to minimize commute time (walk to work), maintenance and administrative time (largely outsourced to the building management) and housework. Living centrally in a city also offers many more options for time/money trade-offs than are available in more remote locations. I think there is sometimes a tendency for people to neglect or undervalue such considerations when making lifestyle choices. I think it is valuable to make large decisions (career, where to live, etc.) with a view to maximizing flexibility and option value.
I did a draft of an article to post here elaborating on some of these ideas but had trouble pitching it in a way that I thought would be useful/appreciated here. Perhaps I should revisit it.
Finally, I think the importance of computational and temporal limits on rationality are generally under-appreciated here, something I’ve mentioned before on occasion.
Please do! I, at least, look forward to reading it.