My first Self-Designed Assignment is complete, but it’s not everything I wanted it to be. I stand by what I wrote, but I do think that there’s something missing. I wasn’t sure how to integrate the time element into my definition of economics when the definition, as it stood, seemed coherent enough to stand on its own, and the time pressure that I imposed on myself caused me to not take the extra time to try to find a way to relate economics back to time. I’ve decided to rectify that problem by elaborating on the economics of time here, in my Journals.
Economics is really all about change. Acting man peers into the future and tries to ascertain what conditions of existence he will soon face. But these future conditions are ones that will come about through the natural operation of the world, without action. Finding these conditions to be unsatisfactory, man acts now, in the present, interfering with the natural flow of events in order to change the approaching future conditions and render them more satisfactory for himself. In this way, all action is future-oriented. We cannot change the present. Only the future, whether that future is so near that its arrival seems instantaneous or so far that the actor will never live to see it. Action is man’s effort to become better off, but to become implies a change in conditions, and change can only occur through time. Economics, then, may also be defined as the study of man’s attempts to change the future.
Time is also the fundamental essence of capital. Capital is a product of time: as a produced means of production, time was required to bring it into existence. However, capital is more accurately an advancement in time. This may seem counterintuitive, since capital is created not for immediate consumption, but to aid in the production of other consumer goods. It seems, therefore, that the production of capital would lengthen the production process and cause more time to pass between the moment the actor set about to attain his end and the moment of attainment. This is half true: investment in capital does lengthen the production process, but not the amount of time that passes between the start of production and the attainment of the final product. This is because capital is an advancement in time.
For example, suppose that Robinson Crusoe is stuck on a deserted island. The only food source on the island are berries. Every day, Crusoe gathers what berries he can pick and consumes them. Suppose that Crusoe can pick 100 berries in an hour, and that he spends 10 hours a day picking berries. One day, however, Crusoe forgoes the consumption of berries, and spends his 10 working hours fashioning a stick with which he can shake berries out of the bushes and a basket with which he can collect the fallen berries. The next day, armed with his tools, Crusoe manages to gather 300 berries an hour, and, therefore, ends his day with 3,000 berries. The production process was lengthened because Crusoe did not immediately start producing berries. He produced a stick and basket, capital goods, before producing the berries, consumer goods. However, without the capital goods, Crusoe would have required 30 hours to collect 3,000 berries. Even though the capital goods required time to create, they still saved him 10 hours of work.
Capital brings the actor closer to the attainment of his end. That is their value, that is their advantage. The production process is lengthened by the accumulation of capital, but that capital provides the shortest, most direct path to the attainment of the end sought. The difference between a man with capital and a man without is that the man with capital will attain his ends sooner than the man without capital. Capital is time.
Capitalism, then, is about time. The free economy becomes the capitalist economy when people begin to orient their actions towards the future, investing in intermediary goods (capital) rather than always seeking direct consumption. However, the very existence of a market presupposes an orientation towards the future, since in a market economy people produce a surplus of goods with the expectation that this surplus can be traded for the surplus goods of others at some future time. Therefore, a market economy is a capitalist economy. The existence of trade indicates a future orientation and a level of capital accumulation that allows even such a microsystem to be called capitalist. Capitalism, after all, is just the economical actions of multiple individuals.
But this means that capitalism is about change. About changing the future. About making the future a better place. And, indeed, this is the purpose of all action. Again, we see that capitalism is the nothing more than the efforts of free men and women trying to improve their lives, or, more accurately, to improve their futures. Economics, as the study of man is his efforts to improve the future, is the study of capitalism, and the factors that influence its functioning.
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