Taking time seriously in economics

I’ve been much taken with Consumption Takes Time: Implications for Economic Theory by Ian Steedman, published in 2001 based on  his Graz Schumpeter lectures. Prior to reading it, I was aware only of Becker’s famous 1965 paper (which I cite in my forthcoming paper on the implications of digital technologies for the production boundary) and of Jonathan Gershuny’s As Time Goes By, and his work on time use surveys.

Steedman works through basic microeconomic theory when a time identity (all time must be used up) and the fact that consumption takes time are included. The results are rather sweeping. Non-satiation fails for obvious reasons. There are always inferior goods – in fact, always Giffen goods and Veblen goods. Small price changes can lead to discontinuously large quantity changes. The existence of a general equilibrium is not clear.

Although Becker’s paper is often cited, time to produce (his focus) and time to consume are not taken seriously in economic theory. They should be, and all the more so in a services-intensive economy where technology is above all reallocating people’s time use and making some services far more efficient (albeit in a way we never measure).

Why this lacuna? I’d guess it’s because the analytics are complicated and there’s no data (absent proper time use surveys). Not a good enough excuse. Economies exist in time and space – and so do economic agents.

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3 thoughts on “Taking time seriously in economics

  1. The issue of time was obviously crucial for Keynes, and the terribly neglected GLS Shackle
    In Epistemics and Economics, 1972, he says
    Economic theory has concerned itself with the sources and consequences of conduct, and has sought in this field what can be conceived as rational, what can be expressed as proportion, what is publicly and unanimously agreed, and what belongs within bounds defined by the notion of exchange in an inclusive sense.

    The attractions of such a programme are evident and compelling. The cost resides in what, by its nature, it is obliged to neglect or even implicitly [to declare unimportant… the most serious of those exclusions… is the brushing aside of the question, a unity though requiring three tells to express it, of time, knowledge, and novelty… theory has chosen rationality, whole and unimpaired. Arid thus it has cut itself off from the most ascendant and superb of human faculties.

  2. Life is a constant learning, and it is good to know what to invest time.
    In these moments Fernando Martínez Gómez-Tejedor, offers the interactive course of quantum strategies, through Facebook, which consists of three levels and is completely free.

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