1.04. Further Implications: Time

0:004. Further Implications, Time Time is omnipresent in human action as a means that must be economized. Every action is related to time as follows. Imagine a timeline divided into three segments. The first segment ends at the letter A. The second segment ends at the letter B. The first segment of the timeline thus depicts the period before the beginning of the action. A is the point in time at which the action begins. The second segment of the timeline, AB, is the period during which the action occurs. B is the point at which the action ends.

0:46And the final segment of the timeline depicts the period after the end of the action. AB is defined as the period of production, the period from the beginning of the action to the time when the consumer's good is available. This period may be divided into various stages, each itself taking a period of time. The time expended during the period of production consists of the time during which labor energy The theory is expended, or working time, and maturing time, that is, time required without the necessity of concurrent expenditure of labor. An obvious example is the case of agriculture.

1:31There might be six months between the time the soil is tilled and the time the harvest is reaped. The total time during which labor must be expended may be three weeks, while the remaining The aging time of over five months consists of the time during which the crop must mature and ripen by the processes of nature. Another example of a lengthy maturing time is the aging of wine to improve its quality. Clearly, each consumer's good has its own period of production. The differences between the time involved in the periods of production of the various goods may be and are innumerable. One important point that must be emphasized when considering action and the period of production is that acting man does not trace back past production processes to their original sources.

2:27In the previous section, we traced back consumers' goods and producers' goods to their original sources, demonstrating that all capital goods were originally produced solely by labor and nature. Acting man, however, is not interested in past processes, but only in using presently available means to achieve anticipated future ends. At any point in time, when he begins the action, say A, he has available to him labor, nature-given elements, and previously produced capital goods. The Theory of Money and Credit

4:06is in the present and the future. This is the necessary result of the fact that action occurs in the present and is aimed at the future. Thus, acting man considers and values the factors of production available in the present in accordance with their anticipated services in the future production of consumers' goods, and never in accordance with what has happened to the factors in the past. A fundamental and constant truth about human action is that man prefers his end to be achieved in the shortest possible time. Given the specific satisfaction, the sooner it arrives, the better. This results from the fact that time is always scarce and a means to be economized.

4:56The sooner any end is attained, the better. Thus, with any given end to be attained, the shorter the period of action, that is, production, the more preferable for the actor. This is the universal fact of time preference. At any point of time, and for any action, the actor most prefers to have his end attained in the immediate present. Next best for him is the immediate future, and the further in the future the attainment of the End appears to be the less preferable it is. The less waiting time, the more preferable it is for him. Time preference may be called the preference for present satisfaction over future satisfaction, or present good over future good, provided it is remembered that it is the same satisfaction A common type of objection to the assertion of universal time preference is that in the wintertime a man will prefer the delivery of ice the next summer, future, to delivery of ice in the present.

6:12This however confuses the concept good with the material properties of a thing, whereas it actually refers to subjective satisfactions. The Theory of Money and Credit the consumer's good will satisfy the wants of the consumer. Some consumer's goods will satisfy his wants, that is, attain his ends, for a short period of time.

7:04Others, for a longer period. They can be consumed for shorter or longer periods. This may be included in the diagram of any action. This length of time, B.C., is the duration of serviceableness of the consumer's good. It is the length of the time the end, served by the consumer's good, continues to be attained. This duration of serviceableness differs for each consumer's good. It may be four hours for the ham sandwich, after which period of time the actor desires other food, or another sandwich. The builder of a house may expect to use it to serve his wants for ten years. Obviously, the expected durative power of the consumer's good to serve his end will enter into the actor's plans.

7:57It has become the custom to designate consumer goods with a longer duration of serviceableness as durable goods and those of shorter duration as non-durable goods. Obviously, however, there are innumerable degrees of durability, and such a separation can only be unscientific and arbitrary. Clearly, all other things being equal, the actor will prefer a consumer's good of greater durability to one of lesser, since the former will render more total service. On the other hand, if the actor values the total service rendered by two consumers goods equally, he will, because of time preference, choose the less durable good since he will acquire its total services sooner than the other.

8:48He will have to wait less for the total services of the less durable good. The concepts of period of production and duration of serviceableness are present in all human action. There is also a third time period that enters into action. Each person has a general time horizon stretching from the present into the future, for which he plans various types of action. Whereas period of production and duration of serviceableness refer to specific consumers' goods and differ with each consumer's good, the period of provision, the time horizon, is the length of future time for which each actor plans to satisfy his wants.

9:35The period of provision, therefore, includes planned action for a considerable variety of consumers' goods, each with its own period of production and duration. This period of provision differs from actor to actor in accordance with his choice. Some people live from day to day, taking no heed of later periods of time. Others plan not only for the duration of their own lives, but for their children as well.