If we follow the Wall Street accounting model, the supply and demand for knowledge assets are cast against the factors of production; land, labor, and capital. The typical corporate human resource department looks to the community for labor units within commuting distance to a factory, and who are willing to rent their time in exchange a minimum amount of money.
But Land is Obsolete
Technology has made the idea of “land” as a factor of production almost obsolete. Knowledge assets travel over the Internet and can be deployed and organized in many ways across long distances without a factory. Indeed there are server farms and automation houses where things are made if needed – but these are hardly factors of production as they once were.
What exactly is a Labor unit again?
Machines have replaced much of what we once called “labor”. I am sitting at Starbucks where a smiling robot is the only thing missing from the age of automated lattes. The social, creative, and intellectual capital required to create, design, maintain, and serve the technology is what ushers us into the knowledge economy and the associated innovation economy.
Capital is arbitrary
Everyone knows that money is created out of thin air when someone allocates their future productivity to the bankers balance sheet in exchange for a place to sleep. When this game loses its entertainment value, “capital” as a factor of production will also become obsolete.
The Supply and Demand for Knowledge Assets:
Knowledge assets are deployed by teachers and replicated by student. Teachers represent the supply of knowledge and students represent the demand for knowledge. In between these two extremes are collaborations – that is, varying combinations of teaching and learning that ultimately results in a productive outcome such as a latte, automobile, or computer program.
If we sample a population of knowledge assets across some geographic area (Land) we would expect to find something that looks like a bell curve.
If the bell curve has a different shape, this tells us what things can be made and what things cannot (Labor).
So when people allocate their own productivity, they are in effect assigning their productivity to a community balance sheet (Capital). They are saying “this is what we are willing to make because we have the freedom, liberty, and we intion to pursue our happiness”.
Hardly a Wall Street model.
The result is that the social, creative, and intellectual assets of people must now replace Land, Labor, and Capital as factors of production in the new value economy. Trying to produce anything less would be inefficient in a Capitalist system – perhaps some may have noticed as much lately.