The chair of our Economics Department found himself in a bit of a quagmire: he was forced to think about how much time is worth in monetary value. He couldn’t seem to calculate it, because there was a merging of Social Exchange Theory and Economic Exchange Theory. Calculating social cost is a little less linear in mathematical terms. But I don’t think it has to be.
In both exchange theories, Sociologists and Economists have something in common besides “exchange”; neither factors the concept of time into cost-benefit analysis in any real tangible way. Both can see the idea of “saving time” as a plus, but end up assigning an integer to an abstract concept. “Time is money” is a saying, but how is it quantified?
This is perhaps a time to revisit some basic Trigonometry, as a factor of labor (and labor markets). One cannot consider time without considering space, or the distance to or from something. The basic formula and it’s derivatives are Distance = Time x Speed. In a model, it looks something like this:
Basically, the faster you go, the less time it will take to get to a constant (constrained) distance. Also, the faster you go in a constrained time will maximize your distance.
It sure looks like a basic economic Demand Model to me. Where x = Q, and y= P. The slope is Q(d)= a –b(P)
Now what if we ran a supply model on time and space, essentially reversing the slope to a positive integer? This is supposed to be impossible in Trigonometry, but theoretically it is possible. Einstein said that time moves slower the faster you go. That would mean that you have more real time with speed. With that in mind, the slope would now be positive, looking something like this:
That sure looks like a basic economic supply model to me. Where x = Q and y = P, the slope is Q(s) = a+b(P).
While I realize that the modeling isn’t perfect, and subject to nuances just like in real supply & demand models, it shows that not only does time and space have value that’s interdependent with one another, but that these things have real, TANGIBLE values.
Yet in Sociology and Economics, we either refuse to, or can’t, account for it in our modeling. Not doing so effects the way we see everything – including labor markets, as well as other commodities and social issues.