29 October 2011

Time and Money

I meant to make this into an insightful post, but I can never quite manage to say what I want to say.  Anyhow, here’s a Freakonomics article how some Chinese people find work waiting in line for others.  Here’s a blog post on how health care is rationed in Sweden.  What do these two articles have in common?  Both show how time is easily converted into money.

The lesson to take away from this is that markets always exist, even when the government attempts to get rid of them.  In Sweden, people paid for medical services in time instead of money.  The same was true in the USSR, where grocery shopping consisted more of waiting in line and less of spending money.  This is because, as the article on China shows, time and money are easily converted to one another.  If you cannot spend money, the next best thing to do is spend time.  This also happened in Canada, where, if memory serves me correct, some provinces had waiting lists of over ten months for maternity beds.

Anyway, it looks like this proves the old maxim is correct:  Time is money.

2 comments:

  1. The thing about rationing by time, instead of by price, is that it does nobody any good. Paying a higher price at least signals and motivates bringing more to market. Nobody benefits from requiring people to wait in long queues, unless you look at the length of the queue as advertising what is being sold. Disney World, for instance, in one of the greatest coups of Industrial Engineering in this century, recognized this and implemented its 'Fast Pass' system, which is a Godsend for the family customer. They recognized clearly that their ride can process X people per hour, and basically just hand out numbers for a window of time where you can essentially just get on the ride with a very very short wait.

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  2. @Jehu- Rationing by time can be useful, like in the event of, say, clothing sales (where clothes are cheapest after the season is over). What advocates of "free" stuff often forget is that there is more than one way to pay for something. Disney obviously recognized the shortfalls of time-price and adjusted accordingly. Maybe Disney could serve as a study for how to distribute goods in a non-price manner.

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