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My_ESSAY of ECON103: Principles of Austrian Economics I

Change in value of Labour over time

Human beings have always developed tools to increase the number of resources they need. Starting with fire, then wheel and metal exploration/ mining, etc., we have always found a way to increase the productivity of our labour.

How have we changed our Value of TIME over the passage of time?

  1. First building block in all this was the start of our speech. The ability to communicate helped us to cooperate in masses. This is how we defeated all other human species and we emerged as the only HOMO as SAPIENS. As our teacher, Dr Saifedean mentioned the five tools (labour, technology, capital, division of labour, Indirect exchange/money) for increasing the amount and value of our time. I believe the start of cooperation was the proper DIVISION OF LABOUR. If our great great forefathers had always worked in one dimension like picking food, then we wouldn’t have survived. The DIVISION of LABOUR helped us in distributing the MANPOWER across all the disciplines of society like Defense, Food Picking, Caretakers, etc.

  2. After our victory against all of our other external threats, we started focusing on staying put. This means that we have started abandoning the nomadic lifestyle. This is where agriculture started in primitive societies. AGRICULTURE was the breakthrough of technology. It took us a couple of thousand years to successfully cultivate LONG GRASS staple foods like WHEAT, RICE. Once our nutrition is assured through yield and proper stocking, the actual division of labour kicked in. Now we needed few people to sow and reap crops. And other people can concentrate on other handy works. This is where the CIVILIZATION started. This is the perfect example of “LOW TIME PREFERENCE”. Eventually, this leads to the society of artisans, farmers, fighters, poets, writers, and above all tribal kings and administrators.

  3. Our value of time has taken another sharp turn once we started METAL MINING. METALLURGY enabled us to use our ULTIMATE RESOURCE of time to create Secondary resources like Metal tools for agriculture, fighting, currency. Basically, the INDIRECT EXCHANGE OF MONEY became more efficient. As everyone can trust each other even outside the immediate tribe because of recognizable barter exchanges and coins (later). Metallurgy now supported big SOCIETAL HIERARCHIES which can afford kings, military generals, etc.

  4. Although, in all my above three points, our value of time increased. But we didn’t make a big stride until 550 years ago. At the end of the medieval ages and the start of the Renaissance in Europe, the Industrial Revolution has simply changed the dynamics of our time. It started with the TECHNOLOGICAL invention of GUNPOWDER and PRINTER at the end of the 15th century. It still took us 250 years until the start of the 1700s to have an Industrial Revolution in its fullest form. Now we human beings have started working in one place for long hours to produce valuable resources out of our ultimate resource TIME. The second and third Industrial Revolutions made our work lives very different. We made our time much valuable. Now we can produce so many goods with so little effort. As Machines and electricity do the rest for us. INDUSTRIAL REVOLUTION has enabled us to accumulate more CAPITAL for ourselves, our families, and our societies. The excess CAPITAL leads to higher standards of living and investments in further technological advancements.

  5. Finally, in the 1980s and 1990s, the INFORMATION AGE came. Now we are in this age and our capabilities are reaching new highs. The world is now super-globalized. Two unknowns can now interact to transact in DIGITAL MONEY (like BITCOIN) without the need of a mutually trusted third party.

In summary, for the first 11-12 thousand years, our value of time increased at a gradual rate. In the last 500 years, it exploded through the roof. No one knows how the future will be. Still, one thing is for sure: we will continue to be more productive with time.

Very nice summary of the human economic evolution. Do you think there are also negative effects or arising dangers of the continuous success story - or is just everything on the one and only path to paradise?