August 21, 2019 – Many of us can often be found expressing a fervent wish for more time—more time to sleep, more time with the family, more time to read, more time to complete an ever-present mountain of to-do’s. Most of us have been raised with a number of well-worn aphorisms about time. “ Time heals all wounds.” “Time waits for no man.” “Time flies.” “Time is indifferent to the affairs of men.” “Time is money.” Yet despite the fact that this latter saying about the value of time is among the most common, and always finds universal agreement, time is remarkably unmeasured and un-priced. When asked the cost of a particular item, the consumer invariably will cite the out-of-pocket purchase price without including the cost of minutes and hours spent finding the item, obtaining the item or installing the item. Faced with paying a fee for a service, individuals will usually attempt to relate the fee directly to the work-effort of the service-provider, NOT to the hours saved for their own use in some other way.
There are, of course, a number of examples of implicit pricing of time. For example, the fees readily paid for an expedited passport service can be interpreted as reflecting the high cost assigned to standing in line at a passport office in an inconvenient location (it is reassuring to know that people are, indeed, sometimes rational.) Another example of considerable consequence these days is the apparent pricing, or re-pricing, of time spent shopping. Those 35 year old’s who 20 years ago saw the giant indoor shopping mall as an entertainment destination providing benefits outweighing the cost of their time, now assign a higher price to their time relative to the cost of finding a parking place, finding the desired item in a largely-disorganized maze of shops and standing in line at a cash register (there’s an old-fashioned term!) This emerging consumer behavior focusing on what economists call opportunity cost not only explains the much-discussed rise of online shopping but also the differential retail sales numbers being reported by stores like Target and Walmart (free-standing stores with reliable inventory and abundant parking in easily accessible locations) versus mall-based department stores like Macy’s and Nordstrom.
Nevertheless, the admittedly inherent difficulty in measuring the value of time – the very nature of the concept is highly subjective, dependent upon the circumstances of the person doing the measurement and varies even according to the hour of the day and day of the week – can cause us to ignore important costs in the calculation of economic action. Or lack of economic action. “Time wasted” is easily accepted as a drag on productivity, economic growth and even the general standard of living, but is pushed to the side in policy debates because of the quantitative challenges. The nature of economic modeling is such that if an important variable cannot be measured, it may be excluded from the model, leading to imperfect results and ultimately the belief, against all reason, that the variable is unimportant.
While attending government meetings in London and Berlin earlier this summer, the undocumented and unmeasured cost of government time lost to the Brexit Saga announced itself like a thunderclap. It was not unusual in London for a government department charged with addressing important political issues such as Iranian sanctions or domestic counterterrorism to state that 40%-60% of its workforce was sidetracked to Brexit-related issues. This diversion of resources was not a new development and appeared to have become a consistent fact of life in governmental Britain over the last two years. Notably, in Berlin, government officials did not seem to have the same staffing or focus problems, perhaps understandable given that they have been mostly waiting and watching as Great Britain flails for a solution and a policy.
Quite possibly, Boris Johnson has been reading his Greek philosophy and recalls the saying of Theophrastus, Aristotle’s successor at the Lyceum: “Nothing is more precious than time, and those who misspend it are the greatest of all prodigals.” Although it is not easy to make up for lost time, the Prime Minister seems hell-bent on an attempt to reduce or eliminate the valuable time being spent in search of a deal allowing Britain to exit the EU in an organized fashion. The fair question on the table is whether Johnson’s pricing of time (primarily a political calculus) is the same as that of the general population (more likely, an economic calculus). A further question is whether Boris Johnson has the more modern-day philosopher Coach John Wooden on his bookshelf; one of John Wooden’s more famous, basketball-derived business admonishments was “Be quick—but don’t hurry.”
Goldman Sachs estimated in April 2019 that as of that date, the Brexit referendum and its subsequent delays, machinations, and uncertainties had cost Britain approximately 600 million pounds ($785 million) per week. As staggering as this figure is, it most certainly does not include diverted government time or the countless private sector labor hours devoted to endless and unproductive meetings. It may include the actions of companies that have assigned a value to wasted time, as well as the importance of business continuity, and moved their operations offshore, e.g. Bank of America’s decision in 2018 to redeploy business operations from London to Paris and Dublin starting in 2019.
The determination of “right” or “wrong”, or of good, better, best, is not the traditional purpose of economic analysis and associated predictions. In the arena of macro and micro policy (even so micro as individual spending and investment decisions) the responsibility of the economist and economics is to illuminate the cost of various choices, for the purpose of making an informed choice. In the case of Brexit –as it stands thus far and as is yet to come— one must remember to add large amounts of “lost time” to more concrete estimates of job loss, price increases and reduced fixed investment. And since everyone agrees that time is money . . .
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